Oakmark Fund: Third Quarter 2017

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 long-term performance of the Oakmark Fund (Investor Class) as of September 30, 2017, presenting its annualized return data since its inception in 1991 and highlighting that its expense ratio is below the peer average. The backdrop is the market's focus on the ability of actively managed funds to generate long-term excess returns.

Core Thesis

The author's core investment argument is that the Oakmark Fund has achieved sustained and significant excess returns through a value investing strategy, with long-term holding and stock selection being the primary sources of returns. The counterintuitive judgment: despite frequent short-term market fluctuations, the fund has outperformed its benchmark across all time horizons—1-year, 5-year, 10-year, and since inception—demonstrating the effectiveness of its strategy across both bull and bear cycles.

Key Arguments and Data

Long-Term Performance: Since its inception on August 5, 1991, the fund has delivered an annualized return of 12.93%, with 10-year, 5-year, 1-year, and 3-month returns of 9.64%, 15.42%, 23.79%, and 5.76%, respectively.
Cost Advantage: The Gross Expense Ratio is 0.89%, lower than the average for comparable actively managed funds (typically 1.0%–1.5%).
Comparative Data: The following table shows returns across various time periods:

Time Period	Annualized Return
Since Inception (08/05/1991)	12.93%
10 Years	9.64%
5 Years	15.42%
1 Year	23.79%
3 Months	5.76%

Companies/Assets Involved

Oakmark Fund (Investor Class): The core subject of analysis, with the report taking a bullish view on its long-term value investing strategy. Key data: 26 years since inception, annualized return of 12.93%, expense ratio of 0.89%.

Investment Implications

Long-Term Holding of Value Stocks: Investors should focus on actively managed funds with low fees and stable long-term performance, avoiding frequent trading driven by short-term volatility.
Stock Selection Premium: The fund's excess returns demonstrate that a deep-value stock selection strategy can generate significant alpha over the long term, and investors may consider allocating to similar strategy products.
Fee Sensitivity: The 0.89% expense ratio is below the industry average, indicating that low fees are an important safeguard for long-term compounding.