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Oakmark Equity and Income Fund Commentary: Third Quarter 2019

September 30, 2019

The repo market is sometimes referred to as part of the plumbing inside the financial system. In 2007, the fact that the entire system had become clogged with bad securities became evident in that market first. Although we believe today’s conditions are very different (and better), we remain vigilant.

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Oakmark Global Fund Commentary: Third Quarter 2019

September 30, 2019

To invest in a company, we demand that the management teams act in the company’s long-term interests because we know that this grows the business value over time and that, in turn, will serve the interests of our Fund’s shareholders. Although the timing is always uncertain, we know – and history demonstrates – that price and value will come together and, therefore, generate successful investing outcomes.

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Oakmark Equity and Income Fund Commentary: Second Quarter 2019

June 30, 2019

As value investors, our understanding of value evolves as the investing environment changes. Although the current term structure of interest rates is far from ideal, it is our charge to succeed for our shareholders in all circumstances, including this abnormal interest rate environment.

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Oakmark Global Fund Commentary: Second Quarter 2019

June 30, 2019

The Fund now owns five emerging markets issues, which may be a record. The U.S. allocation grew modestly in the quarter and the Fund has significant country overweights in Switzerland, Germany and the U.K. compared to the MSCI World Index.

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Oakmark Equity and Income Fund Commentary: First Quarter 2019

March 31, 2019

Oakmark has never solely used statistical factors to define value. Instead, we have always done extensive due diligence on each company to estimate intrinsic value. Our analysis has always tried to account for the value of both physical and intangible assets.

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Oakmark Global Fund Commentary: First Quarter 2019

March 31, 2019

We manage your global equity portfolio by rebalancing into the companies that present the best risk-adjusted values and rebalancing out of the companies where that valuation is less attractive, all while staying fully invested with the goal of maximizing long-term, after-tax returns

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Oakmark Equity and Income Fund Commentary: Fourth Quarter 2018

December 31, 2018

Although we cannot explain why markets behaved so differently in 2017 and 2018, we can recall that valuation compression like that experienced in 2018 generally precedes strong returns.

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Oakmark Global Fund Commentary: Fourth Quarter 2018

December 31, 2018

The past year proved to be difficult and volatile for equity investors. But did this downward price movement accurately reflect a change in the fundamentals of the Fund’s investments? We think not.

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Oakmark Equity and Income Fund Commentary: Third Quarter 2018

September 30, 2018

Our job is to seek value wherever we can find it in both the equity and fixed income markets. To do that, however, we must recognize that value itself is always evolving and we must also evolve to keep up.

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Oakmark Global Fund Commentary: Third Quarter 2018

September 30, 2018

We think that the Global Fund portfolio is unusually attractive today and we have been adding to our personal Fund holdings. We have continued to shift assets from the U.S. allocation to international to take advantage of the exceptional opportunities available abroad.

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Oakmark Equity and Income Fund Commentary: Second Quarter 2018

June 30, 2018

For investors in mutual funds, the question of “fit” is of paramount importance. Investors make the best decisions when they have invested with funds whose style and philosophy mesh well with their own character and needs. Perhaps the most useful advice we can give fund investors is that they should often check to see if they understand their funds and, if so, consider whether they still fit.

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Oakmark Global Fund Commentary: Second Quarter 2018

June 30, 2018

Our investment process applies a private equity approach to public markets. Like private equity, we value businesses based on their intrinsic value, buy at a substantial discount and sell when they are fully valued. Unlike private equity, we mark our portfolio companies according to current public stock prices.

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Oakmark Equity and Income Fund Commentary: First Quarter 2018

March 31, 2018

Our type of value investing requires only that human nature stays constant (i.e., not perfectly rational), such that price and value diverge and converge periodically.

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Oakmark Global Fund Commentary: First Quarter 2018

March 31, 2018

Rather than target a particular country (or industry) weight, we focus our efforts on populating the Fund with our best ideas, while also seeking appropriate diversification.

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Oakmark Equity and Income Fund Commentary: Fourth Quarter 2017

December 31, 2017

As 2017 began, many investors greeted the new year with apprehension. However, the stock market’s ability to defeat expectations is legendary, and 2017 deserves its entry in the book of surprises.

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Oakmark Global Fund Commentary: Fourth Quarter 2017

December 31, 2017

While it may not feel like it every quarter or year, we are building what we believe is a truly conservative global portfolio of our best ideas, one company at a time, to maximize returns over a multi-year period.

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Oakmark Equity and Income Fund Commentary: Third Quarter 2017

September 30, 2017

The Equity and Income Fund has always been invested with the objective to produce absolute rates of return that make it possible for its owners to meet their financial goals

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Oakmark Global Fund Commentary: Third Quarter 2017

September 30, 2017

We were fairly active this quarter, initiating positions in four equities, one of which is the Fund’s first holding ever to be domiciled in India.

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Oakmark Equity and Income Fund Commentary: Second Quarter 2017

June 30, 2017

Although the June quarter superficially appeared to extend trends that emerged after the presidential election, a more careful examination shows material changes in the landscape.

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Oakmark Global Fund Commentary: Second Quarter 2017

June 30, 2017

Why do we think that a value-based, all-capitalization global fund is worth of your consideration? Value investing is a discipline that has stood the test of time.

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Oakmark Equity and Income Fund Commentary: First Quarter 2017

March 31, 2017

Although we are never sure what exactly will cause the gap between price and value to narrow, we are generally confident that it will occur over time.

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Oakmark Global Fund Commentary: First Quarter 2017

March 31, 2017

We build portfolios in the same manner we would manage our personal capital: We seek to maximize after-tax returns over a multi-year time horizon by concentrating our investments in the most undervalued businesses, managed by capable and properly motivated management teams.

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Oakmark Equity and Income Fund Commentary: Fourth Quarter 2016

December 31, 2016

As managers of the Equity and Income Fund, we believe that our investors should focus on developing a portfolio that is right for them and their financial needs.

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Oakmark Global Fund Commentary: Fourth Quarter 2016

December 31, 2016

Although many prognosticators warned that political trends in 2016 would be problematic for securities markets, the stock markets have proven to be quite resilient.

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Oakmark Equity and Income Fund Commentary: Third Quarter 2016

September 30, 2016

Simply put, we continue as before, knowing that over time price and value will come together often enough to be the basis of an effective investing strategy.

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Oakmark Global Fund Commentary: Third Quarter 2016

September 30, 2016

Given the stock market’s seasonal tendency to decline in the quarter, investors expected the period to be challenging. But as is so often the case, the market surprised, this time to the upside.

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Oakmark Equity and Income Fund Commentary: Second Quarter 2016

June 30, 2016

We will continue to monitor changes in our estimates of value closely, but we are comforted that, for the most part, business fundamentals are evolving as we expected and that valuations are compelling.

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Oakmark Global Fund Commentary: Second Quarter 2016

June 30, 2016

We continue to do our best to optimize the returns of the Fund by purchasing undervalued companies that are growing their intrinsic value over time and that are managed by individuals who think and act like long-term owners of the business.

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Oakmark Equity and Income Fund Commentary: First Quarter 2016

March 31, 2016

While the world was fretting about a potential U.S. recession earlier this year, we added four economically sensitive businesses to the portfolio.

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Oakmark Global Fund Commentary: First Quarter 2016

March 31, 2016

As interest rates normalize, spreads between financial industry liabilities and assets will widen, and profitability should materially increase.

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Oakmark Equity and Income Fund Commentary: Fourth Quarter 2015

December 31, 2015

Perhaps the defining event of the quarter (in financial terms) was the Federal Reserve’s decision to increase short-term interest rates.

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Oakmark Global Fund Commentary: Fourth Quarter 2015

December 31, 2015

Although most developed markets closed out the year with modest or negative returns (when expressed in U.S. dollars), considerable volatility occurred beneath the surface of the market averages. This has availed us plentiful opportunities to reorient the portfolio.

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Oakmark Equity and Income Fund Commentary: Third Quarter 2015

September 30, 2015

In times of market volatility and stress, we believe investors would be well served simply to tune out the market and adhere to their long-term investment plans.

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Oakmark Global Fund Commentary: Third Quarter 2015

September 30, 2015

We expect the Fund’s holdings to continue to generate free cash flow, invest in their businesses, pay dividends and repurchase stock, and, in general, grow their intrinsic value per share.

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Oakmark Equity and Income Fund Commentary: Second Quarter 2015

June 30, 2015

In the previous decade the concept of “active share” developed in an attempt to explain when active managers are able to beat passive alternatives.

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Oakmark Global Fund Commentary: Second Quarter 2015

June 30, 2015

In managing funds in the Oakmark group, we insist on buying companies at a meaningful discount to our intrinsic value of the business – regardless of the volatility in the security’s price.

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Oakmark Equity and Income Fund Commentary: First Quarter 2015

March 31, 2015

Though we do not love the current investing landscape, the possibility of identifying attractive new opportunities remains.

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Oakmark Global Fund Commentary: First Quarter 2015

March 31, 2015

In the first quarter, European equities in particular benefited from the European Central Bank’s initiation of a larger than expected quantitative easing program.

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Oakmark Equity and Income Fund Commentary: Fourth Quarter 2014

December 31, 2014

Perhaps the most striking economic event in the quarter was the major decline in the price of oil.

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Oakmark Global Fund Commentary: Fourth Quarter 2014

December 31, 2014

When we analyze a company as a potential investment, its home base is relevant primarily for us to understand the laws and accounting conventions under which it must operate.

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Oakmark Equity and Income Fund Commentary: Third Quarter 2014

September 30, 2014

Active management does not always mean high turnover.

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Oakmark Global Fund Commentary: Third Quarter 2014

September 30, 2014

We initiated positions in a French bank and a Swiss luxury goods company during the quarter.

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Oakmark Equity and Income Fund Commentary: Second Quarter 2014

June 30, 2014

Last year we wrote that investors should “embrace volatility,” but we admit that it is difficult to identify volatility to embrace today.

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Oakmark Global Fund Commentary: Second Quarter 2014

June 30, 2014

Last quarter we began our report comparing the dichotomy between the macro environment and the performance of the equity markets. For better or worse, the same can be written once again for the June quarter.

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Oakmark Equity and Income Fund Commentary: First Quarter 2014

March 31, 2014

After spending much of 2013 with an equity weighting near the Fund’s prospectus maximum of 75%, we have moved the equity allocation down to 65%.

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Oakmark Global Fund Commentary: First Quarter 2014

March 31, 2014

Given our value investing philosophy, it should come as no surprise that we reduced the weight of U.S. holdings in the portfolio during the previous quarter.

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Oakmark Equity and Income Fund Commentary: Fourth Quarter 2013

December 31, 2013

With interest rates at record lows last winter and stocks attractively priced, we increased the equity allocation toward the maximum allowed 75% level, which we maintained for most of 2013. Fortunately, this asset allocation proved to be rewarding.

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Oakmark Global Fund Commentary: Fourth Quarter 2013

December 31, 2013

We like to remind our shareholders that as managers and investors in the Fund, our motivation is to invest in the most attractive equity securities wherever they may be found, and not to mirror an index’s allocations.

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Oakmark Equity and Income Fund Commentary: Third Quarter 2013

September 30, 2013

“Sell in May and go away” is a well-known phrase in the investing community. It derives from empirical observations that the summer months are often difficult for the stock market.

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Oakmark Global Fund Commentary: Third Quarter 2013

September 30, 2013

The September quarter produced strong equity outcomes across most world markets.

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Oakmark Equity and Income Fund Commentary: Second Quarter 2013

June 30, 2013

Security returns were quite disparate across countries, economic sectors and asset types in the June quarter. After a strong start, security prices became erratic after comments from Federal Reserve Chair Ben Bernanke suggested an eventual reduction (a.k.a. tapering) in Fed asset purchases.

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Oakmark Global Fund Commentary: Second Quarter 2013

June 30, 2013

The June quarter was a fascinating period for investors in global equities. Several countries’ stock markets entered corrections (i.e., declines in excess of 10%), and Japan’s energetic bull market quickly became a bear market (down 20% from the peak).

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Oakmark Equity and Income Fund Commentary: First Quarter 2013

March 31, 2013

Our team continued to work to shift the Fund’s fixed-income allocation in a yield-enhancing direction while remaining cognizant of risk. This is incredibly difficult in a world where many investors chase income.

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Oakmark Global Fund Commentary: First Quarter 2013

March 31, 2013

As was the case one year ago, the March quarter witnessed a strong rally in world stock markets, with very few countries experiencing losses.

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Investing in value stocks presents the risk that value stocks may fall out of favor with investors and underperform growth stocks during given periods.

Before investing in any Oakmark Fund, you should carefully consider the Fund's investment objectives, risks, management fees and other expenses. This and other important information is contained in a Fund's prospectus and summary prospectus. Please read the prospectus and summary prospectus carefully before investing. For more information, please call 1-800-OAKMARK (625-6275).

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Date of first use: January 24, 2013.

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