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 (9/30/07) AS COMPARED TO THE MSCI WORLD INDEX10 (UNAUDITED)
	Average Annual Total Returns (as of 9/30/07)
(Unaudited)	Total Return Last 3 Months*	1-year	5-year	Since Inception (8/4/99)
Oakmark Global Fund (Class I)	0.25%	21.29%	25.32%	17.23%
MSCI World	2.36%	21.10%	19.28%	5.23%
Lipper Global Fund Index11	1.80%	21.00%	18.98%	7.00%
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 9/30/07was 1.13%. 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 and Fiscal Year Review

While the Oakmark Global Fund extended its streak of profitable quarters to twelve in the quarter ended September 30, the Fund's recent relative returns were uninspiring. For the quarter the Fund returned a fraction of a percent, which lagged the 2% returns of both the Lipper Global Fund Index and the MSCI World Index. It was a particularly poor quarter for Europe as the pan-European Dow Jones Stoxx 600 Index¹² fell 4%. Oakmark Global's large Europe weighting, as well as its lack of exposure to resource-based economies and to the BRIC's (Brazil, Russia, India, and China), all dampened Fund results. See David Herro's International and International Small Cap Letter for more commentary on commodities and emerging markets. Countries where the Fund enjoyed strong relative performance included Japan, France, and Germany, while Switzerland, the United Kingdom, and Canada brought up the rear. Currency translations played a meaningful part in the quarter's returns as the U.S. dollar's value eroded. We maintained partial hedges against the British pound and initiated a hedge versus the Euro.

We are pleased to report that the Fund's return for the fiscal year exceeded 21% which matches the 21% for the Lipper Global Fund Index and the MSCI World Index. As always, we most enjoy reporting that the compound annualized rate of return since the Fund's inception is 17%.

For more than a year, the balance between U.S. and foreign-domiciled companies has been close to 40/60. Since investors often express interest in how we determine this balance, we will take the liberty of repeating ourselves. We build the portfolio from the bottom up. Each individual name fights for space within the portfolio. The resulting split between U.S. and international is simply an artifact of this endless battle for portfolio position. The same could be said for our Japanese holdings versus our European, emerging market versus developed, etc. We take the portfolio wherever we find dominant value opportunities. Currently that means a lot of U.S., United Kingdom, continental Europe, and Japanese equities.

Oceans of Difference on Competition

Last quarter we wrote about the effect of private equity transactions on equity markets and suggested that the environment was trending less favorably for private equity deals. For once we made a timely and correct forecast! The summer quarter saw several important transactions fall apart, and others experienced duress as bankers struggled to offload some of the debt that makes these deals possible. While we probably should retire from making forecasts at this point, we will push our luck and argue that the ruling in the Luxembourg-based Court of First Instance against Microsoft in its nine-year antitrust battle will prove in the long-term to be the most important financial markets event of the quarter.

Quoting from the Financial Times, "the judgment was delivered in Luxembourg, drafted by an Irishman and read out by a judge from Denmark. The original (European) Commission ruling was prepared by a Spaniard and handed down by Mario Monti, the Italian EU competition commissioner. He has since been replaced by a Dutch official, Neelie Kroes."¹³ While we are not antitrust law experts, we understand the core of the difference between U.S. and European authorities revolves around market domination and its collateral impacts. Oakmark Global owns shares of Intel, the U.S.-based microprocessor company, and the European Commission issued antitrust charges against that company early in the summer, again alleging abuse of a dominant market position. We will not make a specific forecast as to how the divergent application of antitrust law will affect investing opportunities, but we do expect this issue to remain an important factor when analyzing large international companies.

Portfolio Activity

Once again we ended the quarter with 51 equity holdings in the portfolio. We actually eliminated two positions and added only one. With Tyco International splitting into three separate companies and the buyout of eFunds effected in September, however, the portfolio number remained flat at 51.

Strong performers in the quarter included Discovery Holding Class A (U.S.), Medtronic (U.S.), Oracle (U.S.), Apache (U.S.), Square Enix (Japan), and Nestle (Switzerland). Names on the negative side of the ledger included Harley-Davidson (U.S.), Trinity Mirror (UK), a trio of U.S. media concerns, CBS, Time Warner, and Viacom Class B, as well as three Swiss companies, Adecco, Credit Suisse, and UBS. Media continues to be under pressure worldwide as market fragmentation challenges traditional providers. Discovery proved a strong exception to this trend. Investors flocked to Discovery's shares as the probability of a corporate reorganization improved. Harley-Davidson reduced its guidance for sales and earnings, causing its stock to drop. The outlook for Adecco's U.S. temporary help business is mirroring the market's uneasiness about the U.S. economy. Concerns related to liquidity, the fixed income market, and trading books at global investment banks depressed shares of UBS and Credit Suisse.

On the last day of the quarter UBS pre-announced a $2.5-3.5 billion write down related to fixed income securities, causing a pre-tax loss of around $700 million. While the amount has shock value and is higher than what the previous management team had intimated, we can highlight a few positives. First, Marcel Rohner, UBS's new CEO, is proactively changing management and cutting costs at the investment bank. Furthermore, it is sensible for him to take the big write down early in his term as CEO, making future comparisons easier. Second, the balance sheet at UBS remains exceptionally strong in absolute terms and relative to most other investment banks. Third, Rohner realizes that investors who employ short-term trading tactics have become panicked sellers, thereby distorting current prices for fixed income securities. He states that gains are possible in the future as pricing becomes more rational. Finally, the value of the private bank remains intact, and UBS as a whole appears to remain extremely undervalued. We have commented for some time that we are not as concerned with the volatility in the investment bank segment of the business because we were investing in UBS for the value of the private bank business alone. The losses at the investment bank do not make us happy, but fall in our expected range and are not very material to the company's overall intrinsic value. In related news, Credit Suisse announced that third quarter results would be profitable (around $1 billion) and that the company profited from the negative subprime environment.

We exited positions in Vivendi (France) and Vodafone (UK) during the quarter because both approached our sell targets.

Samsung ("SEC," Korea) was our only new purchase. SEC is the industry leader in two types of memory chips, DRAM and NAND (flash), and the company has established significant competitive advantages. Because of its leading market position and financial strength, SEC has been able to maintain and increase research and development as well as capital spending during down cycles which has allowed it to become a low cost producer by a wide margin. In general, we believe SEC is six to nine months ahead of its competitors. Barriers to entry are significant in part because SEC devotes approximately $8 billion per annum to capital spending and research and development on its semi businesses, an amount roughly equal to the entire market capitalization of its primary competitors. Finally, corporate governance at SEC is an improving story: management uses performance-based compensation and has increased dividends and share repurchases.

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

Global Diversification—September 30, 2007 (Unaudited)

Schedule of Investments—September 30, 2007

See accompanying Notes to Financial Statements.