Oakmark Fund: Fourth 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 short-term and long-term performance data of the Oakmark Fund (Investor Class) as of December 31, 2015, along with its disclosed expense ratio. The report aims to demonstrate the fund's returns across different time horizons, providing a benchmark for investors to assess its investment value.

Core Thesis

The report implicitly argues that, despite a negative return (-3.95%) in the most recent year (2015), the fund's long-term annualized returns—since its inception in 1991, over 10 years, and over 5 years—all exceed 8%, indicating stable performance. The author believes that short-term volatility should not overshadow its long-term compounding ability, and that the 0.85% expense ratio is relatively reasonable, making it suitable for investors focused on long-term compounding.

Key Arguments and Data

The report supports its thesis with return data across multiple time horizons, emphasizing that long-term performance outweighs short-term fluctuations. Specific data are as follows:

Time Horizon	Annualized Total Return
Since Inception (August 5, 1991)	12.51%
10 Years	8.49%
5 Years	12.61%
1 Year	-3.95%
3 Months	4.64%

Long-Term Performance: Since inception, the annualized return is 12.51%; over 10 years, 8.49%; over 5 years, 12.61%. All are significantly higher than the average market level over the same period (e.g., the S&P 500 Index annualized approximately 7-9%).
Short-Term Volatility: The 1-year return is -3.95%, but the recent 3-month return has rebounded to 4.64%, indicating a rapid recovery after a short-term decline.
Expense Ratio: The total expense ratio of 0.85% is lower than the average for comparable actively managed funds (approximately 1.2-1.5%), which benefits long-term compounding.

Companies/Assets Involved

Oakmark Fund (Investor Class): The core fund analyzed in the report. The author does not explicitly express a bullish or bearish view but implies its long-term investment value through the data. Key data: Since inception, annualized return of 12.51%; expense ratio of 0.85%.

Investment Insights

Short-Term Volatility Does Not Alter Long-Term Trends: Investors should not panic and redeem due to the 1-year negative return (-3.95%), but should instead focus on the stable growth over 10 years (8.49%) and 5 years (12.61%).
Cost Advantage Secures Long-Term Returns: The 0.85% expense ratio is below the industry average; long-term holding can reduce cost erosion and enhance net returns.
Suitable for Long-Term Allocation: With an annualized return of 12.51% since inception, this fund is suitable as a core holding for investment goals exceeding 10 years (e.g., retirement savings).