THE OAKMARK INTERNATIONAL FUND Report from David G. Herro

THE VALUE OF A $10,000 INVESTMENT IN THE OAKMARK INTERNATIONAL FUND FROM ITS INCEPTION (9/30/92) TO PRESENT (3/31/06) AS COMPARED TO THE MSCI WORLD EX U.S. INDEX16   Average Annual Total Returns (as of 3/31/06)   Total Return Last 3 Months* 1-year 5-year 10-year Since Inception (9/30/92) Oakmark International Fund (Class I) 10.17% 23.10% 14.48% 11.95% 13.09% MSCI World ex U.S. 9.33% 25.06% 10.08% 6.86% 8.60% MSCI EAFE17 9.40% 24.41% 9.63% 6.49% 8.33% Lipper International Fund Index18 9.88% 27.15% 10.38% 8.29% 9.67% 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

The Oakmark International Fund performed satisfactorily over the past 3 months with a return of 10%. This compares with the MSCI World ex U.S. Index’s 9% and the Lipper International Fund Index’s 10%. Most importantly, since inception, The Oakmark International Fund has returned annually 13% versus 9% for the MSCI World ex U.S. Index and 10% for the Lipper International Fund Index.

Impact Players

Munich-based BMW was the quarter’s largest contributor to return. Though much of the auto industry is in trouble, BMW continues to grow its business with updated lines like the 3 Series and 7 Series, which are fueling very strong unit growth. Because the newly wealthy often showcase their economic success via “The Ultimate Driving Machine,” BMW is also profiting from emerging market prosperity. In other sectors, our holdings in the European exchanges Deutsche Boerse and Euronext continued their ascent, becoming the Fund’s second and fourth strongest positive contributors, due to increased talk of global consolidation in the sector. In fact, during the quarter, Euronext reached its sell target, and we no longer own the stock. Finally, as fears of competition in the Irish home lending market subsided, long-term holding Bank of Ireland contributed over 1/2 of 1% to the return of Oakmark International.

On the negative side, the possibility of adverse lending regulation in Taiwan took its toll on new position Chinatrust. We remain very confident of its strong investment fundamentals and have increased our position in the stock. Japanese securities Rohm and NTT DoCoMo also lagged. We believe fears of an overly competitive market and slowing mobile phone usage continue to plague NTT and negatively affect its share price. However, with a 50% plus market share, a new 3G network, and its newly formed alliances with “down stream” services, NTT is very well positioned for future growth, in our view.

New Additions

During the quarter, we added three new names: old Fund holding Michelin, global employment agency Adecco, and DaimlerChrysler. Though the global auto industry seems rough, we feel that Daimler- Chrysler has ample restructuring opportunities, especially given the will demonstrated by new CEO Dieter Zetsche to dramatically enhance the company’s profitability.

Despite the Fund’s relatively healthy returns, we have been able to add promising new investments to our buy list and have plenty of prospects on our research list. As long-term international equity investors, we are still finding attractive opportunities and remain enthusiastic about investment prospects.

David G. Herro, CFA Portfolio Manager dherro@oakmark.com

International Diversification—March 31, 2006 (Unaudited)

Schedule of Investments—March 31, 2006 (Unaudited)