Oakmark Fund: First Quarter 2015

Oakmark is the mutual fund family launched in 1991 by Harris Associates, the Chicago deep-value firm founded in 1976 (about $105bn AUM). Bill Nygren runs the flagship Oakmark Fund and David Herro the Oakmark International Fund, buying businesses at large discounts to intrinsic value and holding them like owners — publishing quarterly fund commentaries, market commentaries and insight articles.

Bill Nygren、David Herro · 1991 · 美国芝加哥Deep value / contrarian long-term

Theme and Background

This section focuses on the performance of the Oakmark Fund (Investor Class) as of March 31, 2015, presenting its returns across different time horizons and disclosing the expense ratio. The backdrop contrasts short-term market volatility (negative returns over the recent three months) with long-term steady performance.

Core Thesis

The author’s central judgment is that the Oakmark Fund demonstrates significant long-term investment value, particularly with outstanding five-year returns, though short-term fluctuations (negative returns over the recent three months) warrant caution. The counterintuitive point is that despite weak short-term performance, the long-term annualized return remains in double digits, and the expense ratio is relatively low.

Key Arguments and Data

Strong Long-Term Performance: Since its inception on August 5, 1991, the annualized return stands at 13.10%, with 10-year at 8.96% and 5-year at a robust 14.64%.
Significant Short-Term Volatility: The recent three-month return is -0.57%, indicating recent downward market pressure.
Cost Advantage: As of September 30, 2014, the total expense ratio is 0.87%, below the industry average, which benefits long-term compounding.

Time Horizon	Average Annual Total Return
Since Inception (August 5, 1991)	13.10%
10-Year	8.96%
5-Year	14.64%
1-Year	8.37%
Recent 3 Months	-0.57%

Companies/Assets Involved

Oakmark Fund: The fund analyzed in the report. Key data: annualized return since inception of 13.10%, 5-year return of 14.64%, recent 3-month return of -0.57%, expense ratio of 0.87%. The author holds a bullish view on its long-term performance but flags short-term risks.

Investment Implications

Long-Term Holding Strategy Is Effective: Given the 13.10% annualized return since inception, investors should adhere to long-term investing and avoid panic exits due to short-term fluctuations (e.g., the recent 3-month -0.57%).
Focus on Cost Advantage: The 0.87% expense ratio is lower than that of peer funds, which can save costs and enhance net returns over time.
Short-Term Risk Requires Management: The negative return over the recent three months indicates market uncertainty. Investors may consider diversification or setting stop-losses, but should not alter their long-term investment direction.