Oakmark International Fund: First Quarter 2020

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 focuses on the performance of the Oakmark International Fund (Investor Class) as of March 31, 2020. The report presents the fund's long-term return data since its inception in 1992 and highlights significant drawdowns caused by recent global market shocks, with particularly alarming short-term losses.

Core Viewpoint

The report's core judgment is that the fund has delivered a positive annualized return since its inception in 1992 (7.42%), but its returns have sharply declined over the past 10 years to 1.70%, turned negative over the past 5 years (-5.74%), and suffered a staggering loss of -29.51% over the past year, with a crash of -38.12% over the past 3 months. The author implies that the fund has performed extremely poorly recently, exhibits high volatility, and that its fee structure (total expense ratio of 1.03%) erodes returns particularly severely in a low-return environment.

Key Arguments and Data

The report clearly illustrates the deteriorating trend in the fund's performance through return data across different time horizons. All data represent average annualized total returns as of March 31, 2020.

Time Horizon	Annualized Return
Since Inception (September 30, 1992)	7.42%
Past 10 Years	1.70%
Past 5 Years	-5.74%
Past 1 Year	-29.51%
Past 3 Months	-38.12%

Fee Data:

Total Expense Ratio (as of September 30, 2019): 1.03%
Net Expense Ratio (as of September 30, 2019): 0.98%

Companies/Assets Involved

Oakmark International Fund (Investor Class): The core fund analyzed in the report. Its recent performance has been extremely poor, with a loss of nearly 30% over the past year and over 38% over the past three months, indicating very high volatility and market sensitivity. The expense ratio (1.03%) further erodes investor returns in a loss-making environment.

Investment Insights

Avoid High-Volatility Funds: The fund's 38.12% crash over the past three months far exceeds typical market index declines, suggesting that its holdings or strategy carry excessive risk exposure in extreme markets. Investors should be wary of such high-volatility products.
Focus on Fee Erosion: When returns are negative or extremely low (e.g., only 1.70% over the past 10 years), a 1.03% expense ratio can significantly amplify losses or drag on returns. Investors should prioritize lower-cost passive index funds or actively managed funds with lower fees.
Short-Term Performance Is Unsustainable: The long-term annualized return of 7.42% has been heavily dragged down by recent extreme losses, indicating the fund lacks defensive capabilities. Investors should not base decisions solely on long-term historical returns but should instead assess the fund's risk control during market downturns.