Oakmark Fund: Fourth Quarter 2019

Theme and Background

This section focuses on the performance and fee structure of the Oakmark Fund (Investor Class) as of December 31, 2019. The report evaluates the fund's long-term and short-term investment outcomes by presenting annualized total returns across different time horizons and discloses its operating costs.

Core Viewpoint

The report's implicit core judgment is that the Oakmark Fund has achieved solid positive returns over the long term (since its inception in 1991) and medium term (10-year, 5-year), with particularly strong short-term performance (1-year, 3-month). The expense ratio is at a reasonable level, with the net expense ratio lower than the gross expense ratio, indicating a certain advantage in cost control.

Key Arguments and Data

• Long-Term Performance: Since its inception on August 5, 1991, the annualized total return stands at 12.48%, demonstrating compounding growth capability over nearly 30 years.
• Medium-Term Performance: The 10-year annualized return is 12.43%, and the 5-year annualized return is 8.82%, both maintaining positive gains. However, the 5-year return is lower than the 10-year return, reflecting market volatility or adjustments in the fund's strategy over the past five years.
• Short-Term Surge: The 1-year return reached a high of 26.98%, and the 3-month return was 11.33%, significantly above the long-term average, likely benefiting from the 2019 market rebound or specific holdings' performance.
• Fee Structure: The gross expense ratio is 0.92%, and the net expense ratio is 0.88%, with a gap of only 0.04%, indicating that the fund does not significantly reduce costs through fee waivers or rebates.

Companies/Assets Involved

• Oakmark Fund - Investor Class: The core fund analyzed in the report. Its role is as an investment vehicle, with data indicating stable long-term performance, strong short-term resilience, and reasonable fees. The report does not explicitly take a bullish or bearish stance but implicitly acknowledges the fund's historical performance.

Investment Insights

• Long-Term Allocation Value: The 12.48% annualized return since inception suggests the fund has the ability to consistently generate returns over a nearly 30-year cycle, making it suitable as a core long-term holding.
• Short-Term Volatility Risk: The 5-year return (8.82%) is significantly lower than the 10-year return (12.43%), reminding investors to pay attention to the impact of market environment changes over the past five years on the fund's strategy. The high short-term return (26.98%) may not be sustainable.
• Cost Advantage: The net expense ratio of 0.88% is moderately low among actively managed funds, resulting in less erosion of long-term compounding, and can be prioritized.