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Oakmark FundsQuarterly31 Mar 2019Source: oakmark.com

Oakmark International Fund: First Quarter 2019

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 early 2019. The key takeaway: over the long term (since 1992), the fund has averaged a solid 9.14% annual return. But in the past year, it lost 14.13% due to a global stock market dip in 2018. Recently, it bounced back 9% in just three months. For regular investors, this shows why it's smart to focus on long-term gains rather than panicking over short-term losses. Also, watch out for fees—here they're about 1% yearly, which adds up over time. Worth a read for a clear example of how patience pays off in investing.

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

The Oakmark International Fund (Investor Class) reported average annualized total returns as of March 31, 2019: since inception on September 30, 1992, 9.14%; 10-year, 11.83%; 5-year, 1.08%; 1-year, -14.13%; and 3-month, 9.04%. In terms of expenses, as of September 30, 2018, the gross expense ratio w

~3 min full read · 5 sections
Deep Analysis

Theme and Background

This section focuses on the performance and fee structure of the Oakmark International Fund (Investor Class) as of March 31, 2019. By presenting annualized total returns across different time horizons, the report reveals that the fund has demonstrated steady long-term performance (since its inception in 1992), but has experienced significant losses in the near term (1-year) due to market volatility.

Core Thesis

The author's core investment argument is that the fund's long-term returns are attractive (9.14% annualized since inception), but its short-term (1-year) performance has been severely pressured (-14.13%), reflecting the sharp correction in international equity markets in 2018. Counterintuitively, despite the notable 1-year loss, the 3-month return has rebounded to 9.04%, suggesting that the market may have partially recovered.

Key Arguments and Data

  • Long-Term Performance: Since inception on September 30, 1992, the annualized total return is 9.14%, indicating steady growth over a cycle of more than 26 years.
  • Medium-Term Performance: The 10-year annualized return is 11.83%, significantly above the long-term average, reflecting the global equity bull market from 2009 to 2019.
  • Short-Term Performance: The 1-year return is -14.13%, the only negative figure across all time periods, highlighting the downward pressure on international markets in 2018.
  • Recent Rebound: The 3-month return is 9.04%, showing a clear recovery in the first quarter of 2019.
  • Fee Structure: The gross expense ratio is 1.01%, and the net expense ratio is 0.96%, placing the fee level in the low-to-mid range of the industry.
Time Horizon Annualized Total Return
Since Inception (1992/09/30) 9.14%
10-Year 11.83%
5-Year 1.08%
1-Year -14.13%
3-Month 9.04%

Companies/Assets Involved

This section only covers the Oakmark International Fund (Investor Class) itself and does not mention any specific portfolio holdings or assets. The fund is an international equity fund investing in non-U.S. markets.

Investment Insights

  • Value of Long-Term Holding: With an annualized return of 9.14% since inception, the fund demonstrates that long-term holding of international equity funds can generate substantial returns. Investors should avoid frequent trading driven by short-term fluctuations.
  • Short-Term Risk Warning: The 1-year loss of 14.13% highlights the significant volatility risk in international equity markets. Investors need to assess their own risk tolerance and consider diversified allocation.
  • Fee Sensitivity: Although the gross expense ratio of 1.01% is not high, it can erode returns over the long term through compounding. Investors should compare fees across similar funds and prioritize low-cost products.
  • Market Timing Judgment: The 3-month rebound of 9.04% may suggest that the market bottom has passed, but caution is warranted regarding subsequent volatility. The report recommends disciplined dollar-cost averaging rather than market timing.