Oakmark Fund: Second 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 presents the historical return data of the Oakmark Fund (Investor Class) as of June 30, 2015, and discloses the fund's expense ratio. The report aims to showcase the fund's long-term performance since its inception in 1991, while also highlighting the significant gap between recent short-term returns and long-term averages.

Core Thesis

The author's core investment argument is that the Oakmark Fund has demonstrated solid long-term performance, but its recent (1-year and 3-month) returns are substantially below long-term averages, indicating that short-term market fluctuations have significantly suppressed the fund's returns. This judgment implicitly warns of short-term market risks, contrasting with the fund's historically stable long-term performance.

Key Arguments and Data

The report supports its thesis with return data across multiple time horizons, emphasizing the contrast between long-term and short-term performance:

Time Horizon	Annualized Total Return
Since Inception (August 5, 1991)	12.97%
10-Year	8.97%
5-Year	17.43%
1-Year	3.51%
3-Month	0.27%

Long-Term Performance: The annualized return since inception is 12.97%, and the 10-year return is 8.97%, indicating the fund's ability to steadily appreciate in value over the long term.
Short-Term Performance: The 1-year return is only 3.51%, and the 3-month return is 0.27%, far below the 5-year return of 17.43% and the long-term average, suggesting that recent market conditions have significantly weighed on the fund's returns.
Expense Ratio: The total expense ratio (as of September 30, 2014) is 0.87%, which is at a moderate level within the industry and does not excessively erode returns.

Companies/Assets Involved

Oakmark Fund (Investor Class): The core fund analyzed in the report. Key data: annualized return since inception is 12.97%, but the 1-year return is only 3.51%. The author holds a positive view of the fund's long-term performance but implies that short-term risks warrant caution.

Investment Insights

Short-Term Volatility Risk: Investors should note that the fund's recent returns are significantly below its long-term average, avoiding misjudgment of the fund's long-term value due to poor short-term performance.
Long-Term Holding Strategy: The fund's annualized return of 12.97% since inception suggests that long-term holding can smooth out short-term fluctuations, though investors must tolerate periods of low returns.
Cost Considerations: The expense ratio of 0.87% is reasonable among peer funds, but investors should still compare it with other low-cost options to optimize net returns.