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.
This report explains how Oakmark Fund beat the market in early 2025 while the S&P 500 fell. Instead of panicking, the fund bought stocks that had dropped too much. It added Marathon Petroleum (the largest US oil refiner, betting that low industry profits will recover) and Constellation Brands (the beer company behind Modelo and Corona, which faces temporary challenges but has strong brands). It also stuck with Alphabet (Google's parent), whose stock fell after cloud growth slowed slightly—but the fund thinks it's a bargain at just 15 times next year's earnings. The takeaway for ordinary investors: downturns can be a good time to buy quality companies at discounted prices, not a reason to run away.
Oakmark Fund's first-quarter 2025 report shows that the fund's investor class shares returned 1.14%, significantly outperforming the S&P 500 index's -4.27%; since inception, the cumulative return stands at 12.76%, also exceeding the index's 10.44%. Core thesis: The fund capitalizes on sharp stock pr
This chapter presents the performance review and investment activity summary of the Oakmark Fund for the first quarter of 2025. The report notes that the fund achieved a positive return of 1.14% during the quarter, significantly outperforming the S&P 500 Index, which declined by 4.27% over the same period. The fund took advantage of the market downturn to reposition its portfolio.
The author's core investment argument is that when stock prices fall sharply, active opportunities should be seized to reallocate the portfolio toward companies offering the most attractive risk-adjusted returns. A counterintuitive judgment is that despite Alphabet's stock price decline due to cloud business growth slightly missing expectations, the author believes its long-term growth prospects remain strong and its current valuation is significantly undervalued.
| Company | Role | Key Data | Bullish/Bearish |
|---|---|---|---|
| American International Group (AIG) | Top Contributor | Improved premium growth, strong underwriting, significant capital returns; ROE expected to converge with peers | Bullish |
| Alphabet Cl A | Top Detractor | Strong search revenue, AI features boosting engagement; cloud revenue grew 30% but slightly missed; stock at 15x next year's EPS | Bullish (considered undervalued) |
| Marathon Petroleum | New Buy | Largest U.S. refining system; midstream business holds high market share in prolific gas fields; industry margins below sustainable levels | Bullish (buying into short-term imbalance) |
| Constellation Brands Cl A | New Buy | Owns premium beer brands like Modelo; beer business consistently outpaces industry growth; valuation below similar growth consumer goods companies | Bullish (buying at a discount) |
| Deere and Company | Contributor | No specific data provided | Bullish (mentioned as a contributor) |
| General Motors | Detractor | No specific data provided | Bearish (mentioned as a detractor) |
| Merck | Detractor | No specific data provided | Bearish (mentioned as a detractor) |
| Intercontinental Exchange | Contributor | No specific data provided | Bullish (mentioned as a contributor) |