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 looks at two Oakmark international funds as of mid-2018. The large-cap fund has solid long-term returns and gained 5% in the last three months, showing resilience. The small-cap fund, however, lost 0.58% recently and has higher fees (1.36% vs. 0.95%), which eat into returns. For regular investors, this means large-cap funds may be a safer core holding during market swings, while small-cap funds, despite stronger five-year performance, carry more short-term risk and cost. Worth reading because it shows how different stock sizes perform in volatile markets.
The Oakmark report provides performance data for its two international funds as of June 30, 2018. The Oakmark International Fund has achieved an annualized return of 9.85% since its inception in September 1992, with returns of 8.36%, 6.83%, 3.13%, and 5.04% over the past 10 years, 5 years, 1 year, a
This section provides performance data for two international funds under Oakmark as of June 30, 2018, aiming to showcase their long-term and short-term return performance. The market environment is in mid-2018, with heightened volatility in global equities and negative recent returns for small-cap funds.
The report argues that both the Oakmark International Fund and the Oakmark International Small Cap Fund have achieved solid long-term annualized returns, but their short-term performance diverges significantly. Counterintuitively, although the small-cap fund's 5-year annualized return (7.34%) exceeds that of the large-cap fund (6.83%), its 1-year and 3-month returns lag notably, indicating recent pressure on small caps.
| Metric | Oakmark International Fund | Oakmark International Small Cap Fund |
|---|---|---|
| Annualized Return Since Inception | 9.85% | 9.48% |
| 10-Year Annualized Return | 8.36% | 6.84% |
| 5-Year Annualized Return | 6.83% | 7.34% |
| 1-Year Return | 3.13% | 1.32% |
| 3-Month Return | 5.04% | -0.58% |
| Gross Expense Ratio | 1.00% | 1.36% |
| Net Expense Ratio | 0.95% | 1.36% |
Investors should be mindful of the pullback risk in small-cap international funds during the second quarter of 2018, as their higher expense ratios may further drag net returns. Large-cap funds demonstrate greater resilience in volatile markets and are suitable as core holdings in international allocations.