October 4, 2017
September 30, 2017, marked the 25th anniversary of the Oakmark International Fund. Proudly, we were able to deliver an average return of 10.4% per year over the life of the Fund. This return is comfortably ahead of the MSCI World ex USA Index return of 6.2% and our Lipper International Fund Index of 7.1%. I am deeply grateful for the support and patience granted by our shareholders. Averages are often comprised of extremes and we have experienced some sharp downturns over short periods that were greatly outnumbered by periods of very strong performance. I firmly believe there is a trade-off in managing for short-term return versus long-term return, and am appreciative of our clients’ patience during weak periods.
I am also deeply appreciative of the many who contributed to the success of this Fund. First, to Victor Morgenstern, then Chairman of Harris Associates, and his fellow partners for hiring me in August of 1992, which gave me the opportunity to start the Oakmark International Fund. Even prior to my employment, Victor and I began laying the groundwork to get Oakmark International registered and opened for business as soon as possible. Then came all those who joined me to work as analysts, traders, administrative assistants, fund accountants, etc. All of these people have played an important role in the success of the Oakmark International Fund. My very first hire, Michael Welsh, was perhaps the most important in terms of the success of the Fund. He started a few months after the Fund’s inception. His experience as a former valuation expert at one of the large accounting firms helped bring tighter structure to our valuation process. Before Michael’s retirement, he was the Fund’s first co-manager.
Lastly, it is my belief that investment success is achieved by having a sound philosophy and the discipline (and freedom) to execute this philosophy through all market conditions. For me, the attraction of joining Harris Associates in 1992 was that the firm possessed that very culture. The investment professionals at Harris/Oakmark have received continuous support, whether it be from our Fund Trustees or Natixis, the current owners of our firm, which has permitted us to carry out the execution of our version of value investing.
Partner, Portfolio Manager and Chief Investment Officer - International Equity