THE OAKMARK FUND Report from Bill Nygren and Kevin Grant, Portfolio Managers

THE VALUE OF A $10,000 INVESTMENT IN THE OAKMARK FUND FROM ITS INCEPTION (8/5/91) TO PRESENT (12/31/05) AS COMPARED TO THE STANDARD & POOR'S 500 INDEX5
		Average Annual Total Returns (as of 12/31/05)
	Total Return Last 3 Months*	1-year	5-year	10-year	Since Inception (8/5/91)
Oakmark Fund (Class I)	1.16%	-1.31%	6.94%	8.39%	15.39%
S&P 500	2.09%	4.91%	0.54%	9.07%	10.70%
Dow Jones Average6	2.06%	1.72%	2.01%	9.76%	11.71%
Lipper Large Cap Value Index7	1.87%	6.26%	2.26%	8.79%	10.48%
The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
The performance data quoted represents past performance. The above performance information for the Fund does not reflect the imposition of a 2% redemption fee on shares held for 90 days or less to deter market timers. If reflected, the fee would reduce the performance quoted. Past performance does not guarantee future results. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Average annual total return measures annualized change, while total return measures aggregate change. To obtain current month end performance data, visit www.oakmark.com.
* Not annualized

For the quarter The Oakmark Fund increased in value by 1% which slightly trailed the S&P 500's 2% increase. For the calendar year, the Fund had a disappointing 1% loss.

Our financial stocks were the quarter's best performers, with JP Morgan and Washington Mutual having higher returns than any other Fund holdings. U.S. Bancorp, Bank of New York and Citigroup also achieved above average gains. Another strong performer, Burlington Resources, announced it was being acquired. Unfortunately, it was being acquired by another of our holdings, ConocoPhillips, which resulted in ConocoPhillips becoming our worst performer. Although investor reaction suggests that Conoco is overpaying, we don't think so. We see Burlington as a good strategic fit, and believe that the merged company will achieve significant cost savings.

During the quarter we eliminated two positions: Automatic Data Processing and Waste Management. Both stocks were multi-year holdings and both were profitable. However, both failed to achieve the growth in business value that we had originally projected. These sales actually demonstrate the margin of safety inherent in our approach. Because we purchased both stocks at such low prices, we were able to exit both positions profitably, despite their disappointing growth. No additions were made to the portfolio during the past quarter.

As we said in our last report, we believe stocks will likely deliver higher long-term returns than other categories of investments. The average stock now sells at about 15 times expected forward earnings. One has to go back to 1995 to find a year that began with a lower P/E³ ratio. Looking back over longer time periods, a price of 15 times earnings appears much more typical than it does high. We believe that starting the year at a valuation level that is historically average or even somewhat lower than average lessens the probability of a market decline and increases the probability of achieving reasonably good returns. Further, we continue to believe that most of our holdings are in better-than-average businesses that have typically commanded significant P/E premiums, but currently are priced very near the average P/E level. We believe our portfolio is well positioned to benefit from a return to more typical quality spreads.

Best wishes,

William C. Nygren, CFA Portfolio Manager bnygren@oakmark.com	Kevin G. Grant, CFA Portfolio Manager kgrant@oakmark.com

Schedule of Investments—December 31, 2005 (Unaudited)