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 covers the Oakmark International Fund's performance for early 2021. It earned 84.81% in the past year, a huge return, but fees (like management costs) reduce what you keep. Currently, fees are 1.04%, but they may rise to 1.06% after January 2022. For regular investors, this means short-term gains look great, but long-term costs matter. Worth reading because it shows that high returns aren't everything—check the fine print on fees.
The Oakmark International Fund (Investor Class) report as of March 31, 2021 shows an annualized return of 9.48% since its inception in September 1992, a one-year return of 84.81%, and a three-month return of 9.01%. The fund has a total expense ratio of 1.06% and a net expense ratio of 1.04% (includi
This section presents the performance and fee structure of the Oakmark International Fund (Investor Class) as of March 31, 2021. The report aims to showcase the fund's long-term return record since its inception in 1992 and to explain the impact of current fee levels and the expense waiver agreement on net returns.
The report's core investment argument is that the fund, through its long-term value investing strategy, achieved significant excess returns (annualized 84.81%) over the past year (through March 2021), validating the strategy's effectiveness amid market volatility. A counterintuitive insight is that despite the extremely high short-term returns, the fee structure (gross expense ratio of 1.06%, net expense ratio of 1.04%) has a non-negligible erosion effect on long-term net returns, and the expense waiver agreement only lasts until January 2022, meaning investors will face higher costs in the future.
The report uses historical return data to support the effectiveness of the long-term strategy and emphasizes the impact of fees on net returns. Key data are as follows:
| Time Period | Annualized Total Return |
|---|---|
| Since Inception (September 1992) | 9.48% |
| 10 Years | 6.88% |
| 5 Years | 9.43% |
| 1 Year | 84.81% |
| 3 Months | 9.01% |
Regarding fees:
This section does not mention specific companies or assets, focusing solely on the fund's own performance and fee data.
For investors, the fund's 84.81% return over the past year indicates that its value strategy can be explosive in specific market environments (e.g., the rebound after March 2020). However, attention should be paid to:
1. Fee Risk: The current net expense ratio of 1.04% is already lower than the gross expense ratio, but the waiver agreement will expire in January 2022, at which point the net expense ratio will rise to 1.06%, increasing the cost of long-term holding.
2. Short-Term Volatility: While the 9.01% return over the past three months is positive, it is far lower than the one-year return, suggesting potential pullback pressure on short-term gains.
3. Lack of Benchmark Comparison: The report does not provide return data for a comparable benchmark index (e.g., MSCI EAFE) over the same period, so investors must assess the authenticity of excess returns on their own. It is recommended to focus on whether the fund's long-term annualized return (9.48%) after fee adjustments can still outperform similar products.