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Oakmark FundsQuarterly31 Mar 2014Source: oakmark.com

Oakmark International Fund: First Quarter 2014

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 the Oakmark International Fund's performance through March 2014. The fund has done well over the long term—11.1% annualized since 1992—and charges a low fee of 0.98%. But recent growth has slowed: it gained only 0.8% in the last three months, after a 23.75% return over the past year. For regular investors, don't chase that one-year high. The slowdown hints at possible short-term bumps. It's still a decent long-term hold, but keep an eye on future quarters.

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

The Oakmark International Fund (Investor Class) report as of March 31, 2014, shows that since its inception on September 30, 1992, the fund has achieved an annualized return of 11.10%. Its returns over the past 10 years, 5 years, and 1 year are 10.20%, 23.73%, and 23.75%, respectively, while the ret

~3 min full read · 5 sections
Deep Analysis

Theme and Background

This section focuses on the performance of the Oakmark International Fund (Investor Class) as of March 31, 2014, covering long-term, medium-term, and short-term return data, and disclosing the expense ratio. The report aims to present the fund's overall investment results since its inception in 1992, providing investors with a historical performance reference.

Core Thesis

The report's core investment argument is that the Oakmark International Fund has achieved steady annualized returns over the long term (since its inception in 1992), with outstanding medium-term (5-year and 1-year) returns, but a significant slowdown in recent (3-month) growth. The counterintuitive judgment is that, despite a high short-term (1-year) return of 23.75%, the near-3-month return of only 0.80% suggests weakening earnings momentum, potentially signaling short-term adjustment risks.

Key Arguments and Data

The report supports its thesis with return data across multiple time dimensions; all figures are from the original text:

  • Long-term Performance: Since inception on September 30, 1992, the annualized return is 11.10%, indicating steady growth over a period exceeding 21 years.
  • Medium-term Performance: The 10-year return is 10.20%, and the 5-year return is a high 23.73%, showing strong performance during the post-financial crisis recovery cycle.
  • Short-term Performance: The 1-year return is 23.75%, nearly matching the 5-year return, indicating that recent gains are highly concentrated; however, the 3-month return is only 0.80%, reflecting a sharp slowdown in recent growth momentum.
  • Expense Ratio: As of September 30, 2013, the total expense ratio is 0.98%, relatively low, which helps enhance net returns.

Comparative data is presented in a table:

Time Horizon Return Rate Notes
Since Inception (1992/09/30) 11.10% Long-term annualized return
10 Years 10.20% Medium-term return
5 Years 23.73% Medium-term return, close to 1-year return
1 Year 23.75% Short-term return, nearly matching 5-year return
3 Months 0.80% Recent return, significantly slowed

Companies/Assets Involved

This section does not mention any specific companies or assets; it only involves the Oakmark International Fund itself as a product. The fund's role is as an investment vehicle, and the report takes a neutral-to-positive stance on its performance (steady long-term, but weakening short-term momentum).

Investment Implications

For investors, the fund's long-term performance outperforms most international equity funds, and its low expense ratio (0.98%) makes it suitable as a long-term holding for international allocation. However, the 3-month return of only 0.80% suggests weakening short-term earnings momentum. Investors should be cautious of recent market volatility or risks from adjustments in the fund's holdings, avoiding chasing the high 1-year return (23.75%). It is recommended to monitor the fund's performance consistency in subsequent quarters and watch for potential style drift or pullbacks in major holdings.