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 navigated the tariff panic in the second quarter of 2025. They sold stocks that held up well and bought deeply discounted shares of solid companies like Nike and Amazon, boosting their margin of safety. They also used a 'put writing' strategy to buy Salesforce: they sold put options (promising to buy at a set price) and collected a premium, effectively getting a discount. The fund sees Global Payments as misunderstood—the market reacted negatively to its acquisition, but Oakmark believes the company can return nearly a third of its market value to shareholders over three years. The takeaway for regular investors: don't panic during selloffs; look for quality stocks that have fallen too far, and consider options strategies to lower your cost.
Oakmark Fund's Q2 2025 report shows that the fund (Investor Share Class) underperformed the S&P 500 Index during the quarter but has outperformed since inception. The core view is that, leveraging the market panic triggered by tariffs, the fund actively adjusted its portfolio, reducing holdings in s
This chapter is the opening overview of Oakmark Fund’s second-quarter 2025 report, focusing on how the fund actively adjusted its portfolio amid market volatility triggered by tariff fears. The report notes that the fund underperformed the S&P 500 Index for the quarter but has outperformed cumulatively since inception.
The author’s core investment thesis is to exploit market dislocations caused by tariff fears through active opportunistic rebalancing—reducing positions in stocks with relatively resilient prices and increasing holdings in assets whose declines far exceed intrinsic value, thereby enhancing the margin of safety and potential returns. The author argues that such opportunistic portfolio management can enhance client returns.
Counterintuitive judgment: Despite the market’s negative reaction to Global Payments’ acquisition of Worldpay, the author believes investors underestimate the long-term strategic and financial value of the deal, and that the company can return nearly one-third of its market capitalization to shareholders over the next three years.
| Company | Role | Key Data | Bullish/Bearish |
|---|---|---|---|
| Citigroup | Largest contributor for the quarter | Q1 results beat expectations, full-year guidance reaffirmed, buybacks accelerated; benefited from expectations of bank deregulation | Bullish |
| Global Payments | Largest detractor for the quarter | Negative reaction to the acquisition of Worldpay and divestiture of Issuer Solutions; author believes nearly one-third of market cap can be returned | Bullish (contrarian to market consensus) |
| Salesforce | New position | Stock down over 30% since exit in December, fundamentals in line; position built via put writing | Bullish |
| Amazon | New position | World’s largest online retailer and cloud service provider; stock fell on tariff and macro concerns, author bought at a discount to intrinsic value | Bullish |
| Nike Cl B | New position | Down to about one-third of 2021 peak; new CEO plans to improve wholesale relationships and product innovation | Bullish |
| Zimmer Biomet | New position | Pure-play orthopedics company; new management completed multi-year reforms, but market has not yet priced this in, valuation below peers and the market | Bullish |
| BorgWarner | Liquidated | No specific reason provided | Bearish (liquidated) |