THE OAKMARK GLOBAL FUND Report from Clyde S. McGregor and Robert A. Taylor, Portfolio Managers

THE VALUE OF A $10,000 INVESTMENT IN THE OAKMARK GLOBAL FUND FROM ITS INCEPTION (8/4/99) TO PRESENT (3/31/06) AS COMPARED TO THE MSCI WORLD INDEX14
	Average Annual Total Returns (as of 3/31/06)
	Total Return Last 3 Months*	1-year	5-year	Since Inception (8/4/99)
Oakmark Global Fund (Class I)	6.86%	20.28%	19.79%	16.92%
MSCI World	6.60%	18.02%	6.38%	2.83%
Lipper Global Fund Index15	7.08%	20.87%	7.17%	5.14%
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 most recent month-end performance data, visit www.oakmark.com.
* Not annualized

Quarter Review

The Oakmark Global Fund posted a return of 7% for the quarter ended March 31, 2006, in line with the figures for the Lipper Global Fund Index and the MSCI World Index.

International stock markets showed considerable strength during the quarter. While some international markets enjoyed double-digit increases, the U.S., though positive, trailed. In our view, these returns indicate a continuation and even amplification of 2005 trends. As is often the case, the U.S. is somewhat out-of-phase with the economies of other developed nations. Coming out of the 2002 downturn, the U.S. economy rebounded vigorously, while most other developed nations experienced more modest improvement. Now the situation is reversed. As much of the world experiences accelerating economic growth, in the U.S., the Federal Reserve is attempting to reduce speculation in some sectors, especially housing, without pushing the entire economy into recession. After 15 short-term interest rate increases over the past two years, U.S. government securities now have some of the highest yields in the world. For example, yields on U.S. ten-year bonds exceed not only those of all other G7 nations but also those from smaller countries, including Greece and the Czech Republic. The Fed’s moves have not prevented corporate earnings from growing rapidly, however.

As we have often noted in these letters, we construct the Fund from the bottom up, populating the portfolio with the most attractive issues available to us from across the globe. Because of this approach, our country weightings will change over time as our perception of value evolves. This can be seen clearly in our weighting for U.S. stocks. Several years ago the Fund was split 50:50 between the U.S. and the rest of the world. As U.S. issues attained our price targets, we found that the dominant new opportunities had shifted abroad. For example, at the end of 2000, the Fund had no Japanese issues compared to seven holdings and a 13% weighting as of this writing. The necessary outcome after 2000 was that the U.S. allocation declined, eventually reaching a nadir of 34%.

However, over the past two years relative price movements in combination with strong earnings growth in the U.S. have changed the valuation calculus. We believe U.S. issues are generically more competitive today. The Fund’s asset allocation expresses this observation as the U.S. weighting has risen to approximately 40%. All other things being equal, we expect the U.S. allocation to continue to grow; then again, how often are all other things equal? In any event, you may be assured we will continue to take the Fund wherever value leads us.

Activity

Our trading activity was rather high in the quarter. We sold two holdings that met our price objectives, Banco Popolare di Verona and Euronext, while Burlington Resources completed its sale to ConocoPhillips on the last day of the quarter (effective 4/3/06). We also eliminated the Fund’s holding of Tribune, believing that News Corp. (discussed below) was a superior opportunity among diversified media companies. We added six new names to the portfolio: three international and three U.S.-domiciled.

Beginning alphabetically, Swiss-headquartered Adecco is one of the largest temporary employment agencies in the world. We have long admired the company’s franchise, but management’s capital allocation decisions had limited our interest. Apparently, the company’s Board came to a similar conclusion. Adecco recently completed the acquisition of DIS, a German temporary help agency, and installed the DIS management team at the helm of Adecco. We view this change to be very positive as DIS had produced industry-leading margins and demonstrated a strong shareholder orientation.

News Corp. is one of the largest global media conglomerates. The company has interests in TV and satellite broadcasting, film production, magazines, newspapers, books, and cable television networks. The company benefits from growing free cash flow and, as a result, enjoys a strong balance sheet. We find News to be unusually cheap relative to the value of its individual pieces.

Until very recently, a name like Oracle would not have shown up in a value-based portfolio. But, for value investors, a bargain price combined with strong cash generation and a solid balance sheet overcomes any initial inhibitions. Oracle is the world’s largest enterprise software company and maintains a dominant position in database software. Previously a distant second place in enterprise application software, we believe Oracle’s acquisitions of Peoplesoft and Seibel Systems have greatly enhanced the company’s market position.

Uni-Charm is a Japanese company with interests in hygiene products and pet food. The company’s brands are well established with large market shares, resulting in attractive returns on capital and substantial free cash generation. Uni-Charm’s management’s words and deeds demonstrate their shareholder-friendly orientation.

Vodafone is another former growth favorite that recently afforded us the opportunity to purchase shares at an attractive price. The company is one of the leading mobile phone operators in the world enjoying strong market positions in the UK, Germany, and Italy as well as an important joint venture with Verizon in the U.S. Soon after our investment in Vodafone, management announced the sale of the company’s operations in Japan, a market where the company had never been able to prosper. We believe that this sale and other recent actions demonstrate the company’s improved capital allocation. Combined with the effects of the completion of the rollout of 3G, the new industry standard, we believe Vodafone’s earnings should begin to experience accelerating growth.

Last but not least, XTO Energy is an independent energy exploration and production company focused on onshore North America basins. Management is unusually adept at purchasing properties from the major oil companies and re-engineering the fields to enhance their value. Management has been able to grow the company’s production and reserves at rates we find far superior to most competitors. Hopefully, the diversity of this list of new names for the portfolio demonstrates that we continue to find value in a wide variety of industries and locales. We thank you for your trust and patience.

Clyde S. McGregor, CFA Portfolio Manager mcgregor@oakmark.com	Robert A. Taylor, CFA Portfolio Manager rtaylor@oakmark.com

Global Diversification—March 31, 2006 (Unaudited)

Schedule of Investments—March 31, 2006 (Unaudited)