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 (6/30/06) AS COMPARED TO THE MSCI WORLD EX U.S. INDEX17
	Average Annual Total Returns
	(as of 6/30/06)
	Total Return Last 3 Months*	1-year	5-year	10-year	Since Inception (9/30/92)
Oakmark International Fund (Class I)	2.90%	26.73%	12.97%	11.41%	13.07%
MSCI World ex U.S.	0.67%	26.89%	10.40%	6.76%	8.49%
MSCI EAFE18	0.70%	26.56%	10.02%	6.39%	8.23%
Lipper International Fund Index19	-0.52%	27.26%	10.13%	7.80%	9.44%

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 oakmark.com.

* Not annualized

The Oakmark International Fund returned 3% this quarter, somewhat better than the MSCI World ex U.S. and the Lipper International indices, which had a gain of 1% and a loss of 1%, respectively. More importantly, for the longer term, the Fund has gained 13% year to date and since inception. In those same time periods the MSCI World ex U.S. Index has returned 10% and 8%, and the Lipper International Index has returned 9%.

Impact Players

Despite volatile markets, the following three stocks have had a significant positive affect on our Fund's year-to-date and second quarter returns:

Enodis Plc: This company was the best performer both year-to-date and the second quarter. A long-term portfolio holding, UK Enodis manufactures and distributes commercial food service equipment, and its management team recently executed a text-book turnaround at the company. Today, in addition to its excellent performance, the company is subject to a takeover bid.

BSkyB Plc: We added this UK provider of pay/satellite TV last year. Initially the stock underperformed as concerns of competition and subscriber churn hit the share price. Today, the company is executing well in a fairly competitive market and was successful in bidding on the UK Premier soccer rights.

Associated British Ports: Is the owner operator of a number of large ports throughout the UK and has been another long-term holding of the Fund. We sold this strong performer during the past quarter because it reached its sell target, which was close to an initial bid price for the company.

As far as underachievers, the following two stocks have weakened the portfolio's return since the beginning of the year:

DaimlerChrysler: Though a newer holding, shares in DaimlerChrysler have been hurt from trouble in the U.S. auto sector. However, we continue to build our position because we believe that the market is overlooking CEO Dieter Zetsche's potential to turn the company around, especially in their Mercedes autos and commercial vehicle divisions.

Rohm Co.: Both technology stocks and Japanese stocks have been weak year-to-date. Rohm is a Japanese specialty semiconductor manufacturer that continues to perform well, despite its weak share price.

Lastly, as we often say, "Weak share price breeds opportunity." This holds true for our former portfolio holding Mexican media company Grupo Tele-visa, which we sold at the end of 2005 when it hit our estimate of fair value. Six months later, due to a greater than 20% share price decline and improved value creation, we bought shares again. We continue to watch closely for other such opportunities.

International Diversification—June 30, 2006 (Unaudited)

Schedule of Investments—June 30, 2006 (Unaudited)