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Oakmark FundsQuarterly30 Sep 2021Source: oakmark.com

Oakmark Fund: Third Quarter 2021

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

In plain words

This report covers Oakmark Fund's performance and fees as of September 2021. The fund has done well over the long term, averaging 13.09% annual returns since 1991, and a standout 59.18% in the past year. But there's a catch: the current net expense ratio (0.91%) is slightly lower than the total (0.93%) thanks to a fee waiver that expires on January 27, 2022. After that, costs may rise. For everyday investors, this means even strong returns can be slightly eroded by higher fees later. It's worth a read because it shows how fee changes matter, even for a top-performing fund.

AI SummaryAI-generated · may contain errors · verify against the original

The Oakmark Fund (Investor Class) reported strong average annualized total returns as of September 30, 2021: cumulative return of 13.09% since inception on August 5, 1991, 16.33% over 10 years, 16.03% over 5 years, a substantial 59.18% over 1 year, and 1.85% over the most recent 3 months. The fund's

~3 min full read · 5 sections
Deep Analysis

Theme and Background

This section presents the performance and fee data of the Oakmark Fund (Investor Class) as of September 30, 2021, in a table format. The report aims to demonstrate the fund's long-term return track record since its inception in 1991 and disclose the current fee structure along with an upcoming expense waiver agreement.

Core Thesis

The report's central argument is that the Oakmark Fund has achieved significant and sustained excess returns through its long-term value investing strategy. Its one-year return of 59.18% is particularly outstanding, far exceeding market averages, validating the effectiveness of its investment approach. A counterintuitive judgment is that despite the fund's strong performance, the net expense ratio (0.91%) is only 0.02 percentage points lower than the gross expense ratio (0.93%), and this benefit relies on a contractual waiver agreement expiring on January 27, 2022, implying that actual costs may rise in the future.

Key Arguments and Data

  • Exceptional Long-Term Performance: Since its inception on August 5, 1991, the cumulative annualized return stands at 13.09%, reflecting significant 30-year compounded growth.
  • Strong Medium- and Short-Term Performance: The 10-year, 5-year, and 1-year returns are 16.33%, 16.03%, and 59.18%, respectively, all at industry-leading levels. The three-month return of 1.85% indicates a recent slowdown in growth momentum.
  • Transparent Fee Structure: The gross expense ratio is 0.93%, and the net expense ratio is 0.91%, with the difference stemming from an advisory fee waiver agreement expiring on January 27, 2022. Actual fees may adjust upon the waiver's expiration.
Metric Data
Annualized Return Since Inception (Aug 5, 1991) 13.09%
10-Year Annualized Return 16.33%
5-Year Annualized Return 16.03%
1-Year Return 59.18%
3-Month Return 1.85%
Gross Expense Ratio 0.93%
Net Expense Ratio 0.91%
Expense Waiver Agreement Expiration Date January 27, 2022

Companies/Assets Involved

  • Oakmark Fund (Investor Class): The core fund analyzed in the report. Its performance data is used as a case study to demonstrate the success of a long-term value investing strategy. The report holds a bullish view on the fund but cautions about fee risks.

Investment Insights

  • Performance Validates Strategy Effectiveness: Investors should focus on the Oakmark Fund's long-term value investing methodology. Its 30-year annualized return of 13.09% proves the strategy's effectiveness across multiple market cycles.
  • Beware of Fee Changes: The current net expense ratio of 0.93% is temporary. Investors need to assess the impact on long-term returns (approximately 0.02 percentage points annually) when the waiver expires on January 27, 2022, and the fee reverts to 0.93%.
  • Short-Term Momentum vs. Long-Term Positioning: The one-year return of 59.18% may not be sustainable, but the long-term data supports the fund's value as a core allocation. Investors should avoid chasing high short-term returns and instead base their allocation on the fund's long-term stability.