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 (3/31/07) AS COMPARED TO THE MSCI WORLD INDEX11
	Average Annual Total Returns (as of 3/31/07)
	Total Return Last 3 Months*	1-year	5-year	Since Inception (8/4/99)
Oakmark Global Fund (Class I)	4.98%	22.00%	17.56%	17.58%
MSCI World11	2.50%	15.44%	10.44%	4.40%
Lipper Global Fund Index12	2.53%	14.24%	10.73%	6.29%
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.
Expense Ratio as of 9/30/06 was 1.18%. 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

Quarter Review

Corporate merger and restructuring activity, both announced and rumored, propelled The Oakmark Global Fund to a 5% return in the quarter ending March 31, 2007. During the same period, both the MSCI World Index and the Lipper Global Fund Index gained 3%. For the first six months of the current fiscal year, the Fund returned 15% compared to 11% for the MSCI World Index and the Lipper Global Fund Index. We are most pleased to report that the compound annualized rate of return since the Fund’s inception is 18%.

While the return picture for the Fund was pleasant in the quarter, the period nevertheless frustrated your management team. We have found it difficult to identify value opportunities in most emerging markets for several years and have been hoping for a period of market turbulence. In late February we saw the possibility for just such an opening when a one-day collapse in the Chinese Shanghai stock market combined with an increase in Japanese interest rates to unsettle investors. Regrettably, from our standpoint at least, the worldwide downdraft in stocks proved insufficient to reduce prices of individual issues to levels that we deem appropriate for new investment. In addition, this volatility was so short-lived that the Shanghai market completely recovered its losses by the end of the quarter.

During the past quarter, the countries in which the Fund has significant allocations each produced positive returns, especially Japan and Germany. David Herro, co-manager of the Oakmark International and International Small Cap Funds, has discussed Japanese brokerage firm Nikko Cordial, a first quarter purchase in the Global Fund, at length in his lead International letter, and we encourage you to read his comments. Another top contributor was Germany’s DaimlerChrysler (DCX) whose management began exploring sale or divestiture possibilities for Chrysler. Only a few months ago, problems at Chrysler caused DCX’s share price to fall, and at that time we initiated our position in the stock. Fears of a massive earnings loss, failed union negotiations, a domestic incentives war, rising interest rates and high oil prices led many people to believe that Chrysler was worthless. Today, in contrast, the daily news is full of rumors and speculations concerning both the potential value of Chrysler and the suitors for the business.

The DaimlerChrysler experience offers several lessons. First, our focus on fundamental business value rather than headlines or share price movements creates the most value for our investors. Despite the fears stated above and the swings of DCX’s share price, our estimate of Chrysler’s worth has remained constant. Second, it is important that we invest with managers who think and act like owners of their business. While Chrysler’s fate remains unclear, we believe that Dr. Dieter Zetsche and the rest of DCX’s top management are acting to maximize shareholder value over time. Finally, portfolio weightings will favor the companies with the largest discounts to value. Since we added the stock to the Fund, DCX has consistently been one of the largest holdings because of its attractive valuation, even though it is in a relatively unattractive industry. At the time we purchased DCX we were only paying for the Mercedes brand and the net cash on its balance sheet; Chrysler (less its pension obligation), the commercial vehicles division, the auto finance book, and miscellaneous long-term financial assets were free.

Many additional holdings contributed meaningfully to the portfolio’s return for the quarter, including Julius Baer (Switzerland), XTO Energy (U.S.), Kinetic Concepts (U.S.), Discovery Holding (U.S.), NTT Docomo (Japan), Cadbury Schweppes (UK), and Ceridian (U.S.). Discovery announced the repurchase of Cox’s 25% holding in the company. Cadbury’s shares rose as investor Nelson Peltz disclosed an ownership stake and management proposed to break the company apart. Ceridian also attracted the attention of activist investors.

Activity

While market movements made us appear active in the quarter, we actually initiated positions in only two names and eliminated two holdings as well. We sold ANZ Banking Group (Australia) and Waste Management (U.S.) when they met our price objectives. We have already mentioned our purchase of Nikko Cordial. Our other new purchase was UBS, the Swiss-based financial conglomerate. UBS’s private banking franchise is the world’s largest. The private banking business achieves high operating margins and huge returns on capital. Unusual for a business with solid growth potential, private banking requires only modest incremental capital. UBS’s private bank franchise and asset management business together generate the majority of the company’s profits. Nevertheless, UBS’s stock has been more sensitive to investor attitudes toward the company’s investment banking business, thereby creating our opportunity. The investment banking industry has had great results for several years. Record mergers and acquisition activity as well as strong proprietary trading from products such as mortgages and commodities have boosted profits. UBS’s investment bank has gained share over the past few years and generates very good returns on capital. We are sympathetic to the point of view that the investment banking results may be above trend, but we believe that the share price discounts this risk. Management seems to agree and has repurchased 20% of the company over the past five years and announced another 10% repurchase in the March quarter.

Weights

In one sense, we ended the quarter right where we began it: the portfolio weight for U.S. stocks remained at approximately 40%. The percentage allocations in Switzerland and Japan rose, largely because of the UBS and Nikko purchases, while the Fund’s United Kingdom allocation diminished. Consultants point out that the Fund’s 40% weight for U.S. holdings is less than the weight in the benchmark, the MSCI World Index. Although that is true, in our opinion it is not meaningful. Over the course of the Fund’s history, the U.S. allocation has at times been 50% and at other times 30%. Your managers, however, have never paid attention to benchmarks when building the portfolio. Within the prospectus limits for the Fund, we invest wherever we believe there is value, and currently that means 41% U.S., 15% Japan, and most of the remainder in the UK and continental Europe.

We thank you for being our shareholders and welcome your suggestions and comments.

Global Diversification—March 31, 2007 (Unaudited)

Schedule of Investments—March 31, 2007 (Unaudited)