THE OAKMARK FUND Report from Bill Nygren and Kevin Grant, Portfolio Managers

THE VALUE OF A $10,000 INVESTMENT IN THE OAKMARK FUND FROM ITS INCEPTION (8/5/91) TO PRESENT (9/30/07) AS COMPARED TO THE STANDARD & POOR'S 500 INDEX3 (UNAUDITED)
	Average Annual Total Returns (as of 9/30/07)
(Unaudited)	Total Return Last 3 Months*	1-year	5-year	10-year	Since Inception (8/5/91)
Oakmark Fund (Class I)	-2.94%	11.51%	12.58%	6.29%	15.01%
S&P 5004	2.03%	16.44%	15.45%	6.57%	11.08%
Dow Jones Average4	1.83%	18.92%	14.90%	7.62%	12.31%
Lipper Large Cap Value Index5	0.21%	15.05%	16.04%	6.76%	10.93%
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 9/30/07 was 1.01%.
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

Our fiscal year ended with a down quarter, but our return for the year was still a respectable 12%. Over the twelve-month period, we had positions in sixty-one different stocks. Forty-three of those stocks went up in price while we held them, and only eighteen declined. Looking at the large magnitude changes, only three stocks declined by over 20% (Pulte Homes, Harley Davidson and MGIC) while twenty-one increased by more than 20%. The two most important positive contributors were McDonalds, our largest holding up 43%, and InBev, a lesser position but up 66%. Both achieved significantly stronger than expected earnings growth. Our portfolio followed its typical pattern for good years: more winners than losers, and more big winners than big losers. Despite the good absolute return, our satisfaction is tempered by the fact that other investors had even higher returns. The S&P 500 gained 16% for the year, assisted by very large increases in energy and materials stocks, businesses in which we have negligible investment.

Last quarter was our weakest quarter of the year, losing 3% while the S&P 500 gained 2%. During the quarter we sold the remainder of our Gap position and used that money to add to our other retailers that we believe are better positioned yet no more expensive. The two new names in the portfolio, Covidien and Tyco Electronics, were not new purchases, but rather were spin-offs from our position in Tyco Industries. The shortfall in quarterly performance was the result of both declines in stocks we held, as well as gains in those we didn't. Energy was the best performing market sector again last quarter, and we have little exposure. We continue to believe that financial speculators have driven current oil and gas prices well beyond the level justified by long-term supply and demand. Retailers were one of the worst performing industries, and we suffered double-digit declines in Kohl's, Limited Brands (Victoria's Secret), Home Depot and Liberty Interactive (QVC). In addition, continued weakness in housing led to losses in Pulte Homes, Washington Mutual, and MGIC (mortgage insurance). We believe that retailers and consumer finance companies are priced as if we are likely to be entering a recession, while the rest of the market is priced as if growth will continue. To us, the risk-reward tradeoff in our portfolio holdings looks quite attractive.

September 30, 2007

Schedule of Investments—September 30, 2007