Oakmark International Fund: Third Quarter 2016

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

Theme and Background

This section presents the performance data of the Oakmark International Fund (Investor Class) as of September 30, 2016, including long-term returns since its inception in 1992, returns over various recent periods, and the expense ratio, providing investors with a quantitative benchmark for the fund's historical performance.

Core Thesis

The report's implicit core investment argument is that the fund, through a long-term value investing strategy, achieved an average annual return of 9.49% over a 24-year cycle, demonstrating the effectiveness of its strategy. The counterintuitive point is that despite a strong recent (3-month) return of 13.28%, the long-term (10-year) return is only 4.46%, indicating significant short-term volatility and that long-term returns rely more on strategy stability than short-term bursts.

Key Arguments and Data

Long-Term Performance: From inception in September 1992 to September 30, 2016, the average annual total return was 9.49%, showing the power of long-term compounding.
Recent Performance: The 1-year return was 6.66%, and the 3-month return was 13.28%, indicating strong short-term performance, but the 10-year return was only 4.46%, below the long-term average, reflecting the impact of market cycles.
Expense Ratio: The total expense ratio was 0.95% (as of September 30, 2015), which is at a moderate level for actively managed funds.

Period	Average Annual Total Return
Since Inception (September 1992) to September 30, 2016	9.49%
Past 10 Years	4.46%
Past 5 Years	9.78%
Past 1 Year	6.66%
Past 3 Months	13.28%

Companies/Assets Involved

This section does not mention specific companies or assets, focusing solely on the fund's overall performance data without any long or short judgments on individual stocks or sectors.

Investment Insights

Value of Long-Term Holding: The 24-year average annual return of 9.49% suggests that adhering to a value investing strategy can generate substantial returns over the long term, and investors should focus on long-term compounding rather than short-term fluctuations.
Short-Term Risk Warning: The 10-year return (4.46%) is significantly below the long-term average, indicating that market cycles may lead to periods of underperformance, requiring patience and risk tolerance from investors.
Cost Considerations: The 0.95% expense ratio is reasonable for an actively managed fund, but investors should compare it with similar products to ensure that fees do not erode long-term returns.