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 reviews Oakmark International Fund's first quarter of 2011. The fund returned 2%, slightly below the 4% global stock benchmark (excluding the U.S.), but since 1992 it has averaged 11% annually, beating the market's 7%. For regular investors, the key takeaway is that the fund sticks to buying undervalued foreign companies whose management prioritizes shareholder returns, like paying dividends. For example, it likes Canon despite a 16% stock drop, arguing that its shareholder-friendly management is rare in Japan and will pay off long-term. It also favors Bank of Ireland, believing that after government help, it will remain independent and face less competition, boosting profits. This is worth reading because it shows how to invest against the crowd during panic, not sell in fear.
The Oakmark International Fund returned 2% in the first quarter of 2011, slightly underperforming the MSCI World ex U.S. Index's 4% return. However, since its inception in September 1992, the fund has achieved an average annual return of 11%, outperforming the index's average annual return of 7% ove
This chapter is the investment review of the Oakmark International Fund for the first quarter of 2011. The report notes that the fund returned 2% for the quarter, slightly underperforming the benchmark MSCI World ex U.S. Index's 4% return. However, since its inception in September 1992, the fund has achieved an average annual return of 11%, significantly outperforming the index's average annual return of 7% over the same period. The report focuses on analyzing the performance contributions and drags of the quarter's major holdings and discloses portfolio adjustments.
The author's core investment argument is: Adhere to value investing, seeking undervalued overseas companies with management focused on shareholder returns amid short-term market fluctuations. The report argues that although some holdings (e.g., Canon, Bank of Ireland) faced short-term pressure, their fundamentals and management orientation remain attractive and will deliver positive returns over the long term. A counterintuitive judgment is that the author is optimistic about Bank of Ireland, believing that after government capital injection, it will remain a publicly listed bank not controlled by the government, and reduced industry competition in the future will enhance profitability.
Comparative Data Table:
| Company/Asset | Quarterly Performance | Key Data/Events | Author's Judgment |
|---|---|---|---|
| SAP | +20% | Software and services revenue grew 10%, total revenue increased 11% | Bullish: Management continues to improve margins, strong cash flow |
| Canon | -16% | Fourth-quarter results missed expectations, impacted by strong yen and division losses | Bullish: Shareholder-oriented management remains rare in Japan, will deliver positive long-term returns |
| Bank of Ireland | Drag | Required to raise €5.2 billion in capital, government stake <50% after injection | Bullish: Reduced competition will enhance profitability, expected to become an industry winner |