Insights

Positioning Portfolios for the Long Term

March 11, 2020

Portfolio Manager David Herro shares why the recent market volatility allows the firm to position portfolios that may provide access to good long-term returns.

Average Annual Total Returns (as of 12/31/2019):

Fund3 Month1 Year3 Year5 Year10 YearInception
OAKIX11.07%24.21%7.26%5.07%7.30%9.40%
MSCI EAFE Index8.17%22.01%9.56%5.67%5.50%5.94%

Gross Expense Ratio (as of 09/30/2019): 1.03%
Net Expense Ratio (as of 09/30/2019): 0.98%
Fund Inception:  09/30/1992

Fund3 Month1 Year3 Year5 Year10 YearInception
OAKEX12.49%31.90%8.25%6.32%6.76%9.07%
MSCI World ex U.S. Small Cal Index11.40%25.41%10.42%8.17%8.04%N/A

Gross Expense Ratio (as of 09/30/2019): 1.38%
Net Expense Ratio (as of 09/30/2019): 1.38%
Fund Inception:  11/01/1995

Past performance is no guarantee of future results. The performance data quoted represents past performance. Current performance may be lower or higher than the performance data quoted. The investment return and principal value vary so that an investor’s shares when redeemed may be worth more or less than the original cost.

To obtain most recent month-end performance data, view it here.

The holdings mentioned comprise the following percentages of the Fund’s total net assets as of 12/31/2019:

Security TitleOAKIXOAKEX
BMW3.2%0%
Daimler3.5% 0%
EXOR2.2% 0%
FCA0% 0%
G4S0.9% 0%
Liberty Global Cl A1.0% 0%
Liberty Global Cl C0.7% 0%
Peugeot0% 0%
Toyota Motor1.5% 0%
WPP1.9% 0%

Portfolio holdings are subject to change without notice and are not intended as recommendations of individual stocks. Current and future portfolio holdings are subject to risk. Portfolio holdings represent only securities held in the U.S. domiciled Oakmark Funds and may not be representative of any other portfolio managed by Harris Associates L.P.

View the full list of Oakmark International Fund holdings as of the most recent quarter-end.
View the full list of Oakmark International Small Cap Fund holdings as of the most recent quarter-end.

The MSCI EAFE Index (Net) is designed to represent the performance of large and mid-cap securities across 21 Developed Markets countries in Europe, Australasia and the Far East, excluding the U.S. and Canada. The Index covers approximately 85% of the free float-adjusted market capitalization in each of the 21 countries. This benchmark calculates reinvested dividends net of withholding taxes. This index is unmanaged and investors cannot invest directly in this index.

The MSCI World ex U.S. Small Cap Index (Net) is designed to measure performance of small-cap stocks across 22 of 23 Developed Markets (excluding the United States). The index covers approximately 14% of the free float-adjusted market capitalization in each country. This benchmark calculates reinvested dividends net of withholding taxes. This index is unmanaged and investors cannot invest directly in this index.

EBIT refers to earnings before interest and taxes and is a measure of a firm’s profit that includes all incomes and expenses (operating and non-operating) except interest expenses and income tax expenses.

The funds’ portfolios tend to be invested in a relatively small number of stocks. As a result, the appreciation or depreciation of any one security held by the Fund will have a greater impact on the Fund’s net asset value than it would if the Fund invested in a larger number of securities. Although that strategy has the potential to generate attractive returns over time, it also increases the Fund’s volatility.

The stocks of smaller companies often involve more risk than the stocks of larger companies. Stocks of small companies tend to be more volatile and have a smaller public market than stocks of larger companies. Small companies may have a shorter history of operations than larger companies, may not have as great an ability to raise additional capital and may have a less diversified product line, making them more susceptible to market pressure.

Investing in foreign securities presents risks that in some ways may be greater than U.S. investments. Those risks include: currency fluctuation; different regulation, accounting standards, trading practices and levels of available information; generally higher transaction costs; and political risks.

The information, data, analyses, and opinions presented herein (including current investment themes, the portfolio managers’ research and investment process, and portfolio characteristics) are for informational purposes only and represent the investments and views of the portfolio managers and Harris Associates L.P. as of the date written and are subject to change and may change based on market and other conditions and without notice. This content is not a recommendation of or an offer to buy or sell a security and is not warranted to be correct, complete or accurate.

Certain comments herein are based on current expectations and are considered “forward-looking statements”. These forward looking statements reflect assumptions and analyses made by the portfolio managers and Harris Associates L.P. based on their experience and perception of historical trends, current conditions, expected future developments, and other factors they believe are relevant. Actual future results are subject to a number of investment and other risks and may prove to be different from expectations. Readers are cautioned not to place undue reliance on the forward-looking statements.