Oakmark Funds Semi-Annual Report dated 03/31/2021

OAKMARK FUNDS

SEMI-ANNUAL REPORT | MARCH 31, 2021

OAKMARK FUND OAKMARK SELECT FUND OAKMARK GLOBAL FUND OAKMARK GLOBAL SELECT FUND OAKMARK INTERNATIONAL FUND OAKMARK INTERNATIONAL SMALL CAP FUND OAKMARK EQUITY AND INCOME FUND

OAKMARK BOND FUND

Oakmark Funds

2021 Semi-Annual Report

TABLE OF CONTENTS

Fund Expenses

1 Oakmark International Small Cap Fund

Commentary on Oakmark and Oakmark Select Funds

2

Summary Information Portfolio Manager Commentary

30 31

Oakmark Fund

Schedule of Investments

32

Summary Information Portfolio Manager Commentary Schedule of Investments

4 Oakmark Equity and Income Fund

5

Summary Information

36

6

Portfolio Manager Commentary

37

Oakmark Select Fund

Schedule of Investments

39

Summary Information

10 Oakmark Bond Fund

Portfolio Manager Commentary

11

Summary Information

44

Schedule of Investments

12

Portfolio Manager Commentary

45

Oakmark Global Fund

Schedule of Investments

47

Summary Information Portfolio Manager Commentary Schedule of Investments

Oakmark Global Select Fund Summary Information Portfolio Manager Commentary Schedule of Investments

14 Financial Statements

15

Statements of Assets and Liabilities

50

17

Statements of Operations

52

Statements of Changes in Net Assets

54

Notes to Financial Statements

68

20

Financial Highlights

80

21

22 Disclosures and Endnotes

96

Oakmark International Fund

Trustees and Officers

101

Summary Information

24

Portfolio Manager Commentary

25

Schedule of Investments

26

Beginning on January 1, 2021, as permitted by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of the Oakmark Funds' annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on , and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Funds electronically anytime by contacting your financial intermediary (such as a broker-dealer or bank) or, if you hold your shares directly with the Funds, by calling 1-800-OAKMARK (625-6275) or visiting .

You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. If you hold your shares directly with the Funds, you can call 1-800-OAKMARK (625-6275) to let the Funds know you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Funds you hold directly or all Funds you hold through your financial intermediary, as applicable.

FORWARD-LOOKING STATEMENT DISCLOSURE

One of our most important responsibilities as mutual fund managers is to communicate with shareholders in an open and direct manner. Some of our comments in our letters to shareholders are based on current management expectations and are considered "forward-looking statements." Actual future results, however, may prove to be different from our expectations. You can identify forward-looking statements by words such as "estimate", "may", "will", "expect", "believe",

"plan" and other similar terms. We cannot promise future returns. Our opinions are a reflection of our best judgment at the time this report is compiled, and we disclaim any obligation to update or alter forward-looking statements as a result of new information, future events, or otherwise.



Fund Expenses (Unaudited)

A shareholder of each Fund incurs ongoing costs, including investment advisory fees, transfer agent fees and other Fund expenses. The examples below are intended to help shareholders understand the ongoing costs (in dollars) of investing in each Fund and to compare these costs with the ongoing costs of investing in other funds.

The following table provides information about actual account values and actual Fund expenses as well as hypothetical account values and hypothetical fund expenses for shares of each Fund.

ACTUAL EXPENSES

The following table shows the expenses a shareholder would have paid on a $1,000 investment in each Fund from October 1, 2020 to March 31, 2021, as well as how much a $1,000 investment would be worth at the close of the period, assuming actual Fund returns and expenses. A shareholder can estimate expenses incurred for the period by dividing the account value at March 31, 2021, by $1,000 and multiplying the result by the number in the "Actual--Expenses Paid During Period" column shown below.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The following table provides information about hypothetical account values and hypothetical expenses for shares of each Fund based on actual expense ratios and an assumed rate of return of 5% per year before expenses, which are not the Funds' actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or actual expenses shareholders paid for the period. Shareholders may use this information to compare the ongoing costs of investing in a Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as redemption fees. Therefore, the "Hypothetical--Expenses Paid During Period" column of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If these transaction costs were included, the total costs would have been higher.

ACTUAL

HYPOTHETICAL (5% annual return before expenses)

Beginning Account Value

(10/1/20)

Ending Account Value

(3/31/21)

Expenses Paid During

Period*

Ending Account Value

(3/31/21)

Expenses Paid During

Period*

Annualized Expense Ratio

Oakmark Fund Investor Class Advisor Class Institutional Class Service Class R6 Class

$1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00

$1,435.10 $1,436.30 $1,436.70 $1,433.50 $1,177.80

$5.46 $4.43 $4.07 $6.73 $2.02(a)

$1,020.44 $1,021.29 $1,021.59 $1,019.40 $1,021.74

$4.53 $3.68 $3.38 $5.59 $3.23

0.90% 0.73% 0.67% 1.11% 0.64%

Oakmark Select Fund Investor Class Advisor Class Institutional Class Service Class R6 Class

$1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00

$1,469.20 $1,469.80 $1,470.70 $1,467.20 $1,171.00

$6.09 $5.48 $4.74 $7.32 $2.36(a)

$1,020.00 $1,020.49 $1,021.09 $1,019.00 $1,021.19

$4.99 $4.48 $3.88 $5.99 $3.78

0.99% 0.89% 0.77% 1.19% 0.75%

Oakmark Global Fund Investor Class Advisor Class Institutional Class Service Class R6 Class

$1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00

$1,437.50 $1,438.80 $1,439.30 $1,436.30 $1,131.00

$6.87 $5.78 $5.47 $8.20 $2.75(a)

$1,019.30 $1,020.19 $1,020.44 $1,018.20 $1,020.49

$5.69 $4.78 $4.53 $6.79 $4.48

1.13% 0.95% 0.90% 1.35% 0.89%

Oakmark Global Select Fund Investor Class Advisor Class Institutional Class R6 Class

$1,000.00 $1,000.00 $1,000.00 $1,000.00

$1,379.60 $1,380.80 $1,381.40 $1,126.40

$6.59 $5.64 $5.22 $2.59(a)

$1,019.40 $1,020.19 $1,020.54 $1,020.74

$5.59 $4.78 $4.43 $4.23

1.11% 0.95% 0.88% 0.84%

Oakmark International Fund Investor Class Advisor Class Institutional Class Service Class R6 Class

$1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00

$1,433.20 $1,434.30 $1,435.10 $1,431.90 $1,100.70

$6.07 $5.16 $4.61 $7.28 $2.35(a)

$1,019.95 $1,020.69 $1,021.14 $1,018.95 $1,021.09

$5.04 $4.28 $3.83 $6.04 $3.88

1.00% 0.85% 0.76% 1.20% 0.77%

Oakmark International Small Cap Fund Investor Class Advisor Class Institutional Class Service Class R6 Class

$1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00

$1,405.30 $1,405.60 $1,407.00 $1,403.40 $1,129.10

$8.16 $7.26 $6.66 $9.77 $3.37(a)

$1,018.15 $1,018.90 $1,019.40 $1,016.80 $1,019.50

$6.84 $6.09 $5.59 $8.20 $5.49

1.36% 1.21% 1.11% 1.63% 1.09%

Oakmark Equity and Income Fund Investor Class Advisor Class Institutional Class Service Class R6 Class

$1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00

$1,279.70 $1,280.70 $1,281.50 $1,278.50 $1,116.70

$4.77 $3.70 $3.36 $5.91 $1.75(a)

$1,020.74 $1,021.69 $1,021.99 $1,019.75 $1,022.09

$4.23 $3.28 $2.97 $5.24 $2.87

0.84% 0.65% 0.59% 1.04% 0.57%

Oakmark Bond Fund Advisor Class Institutional Class R6 Class

$1,000.00 $1,000.00 $1,000.00

$1,015.20 $1,016.70

$994.30

$3.06 $2.26 $1.27(a)

$1,021.89 $1,022.69 $1,022.74

$3.07 $2.27 $2.22

0.61% 0.45% 0.44%

* Expenses are calculated using the Annualized Expense Ratio, multiplied by the average account value over the period, multiplied by 182 and divided by 365 (to reflect one-half year period)

(a) Expenses are calculated using the Annualized Expense Ratio, multiplied by the average account value over the period, multiplied by 106 and divided by 365 (to reflect number of days the class was open)

1

Oakmark and Oakmark Select Funds

Portfolio Manager Commentary

March 31, 2021

William C. Nygren, CFA Portfolio Manager

oakmx@ oaklx@ oakwx@

At Oakmark, we are long-term investors. We attempt to identify growing businesses that are managed to benefit their shareholders. We will purchase stock in those businesses only when priced substantially below our estimate of intrinsic value. After purchase, we patiently wait for the gap between stock price and intrinsic value to close.

"We laughed and said they are trying to put a computer on a phone, that it won't work. We are now 3-4 years too late."

Anonymous BlackBerry employee letter quoted in Think Again by Adam Grant

What a difference a year makes When writing this commentary a year ago, the United States was close to completing its lockdown for "15 days to flatten the curve." I wrote about the 34% decline in the S&P 500 Index,1 the abrupt transition to work from home, the benefits of rebal ancing portfolios and our focus on owning companies that could prosper in the unlikely event the shutdown lingered. The commentary ( market-commentary-1q20/) closed with this paragraph:

"We are hopeful that three months from now, when you read our second-quarter commentary, the Cubs will be playing baseball, we will be eating inside of restaurants and we will all be rescheduling the trips we've had to cancel. If that has happened, we believe the economy will likely recover quickly as will the stock market. But if it takes longer to return to normal, know that we have weighted our portfolios toward companies that we believe can survive a longer downturn and that we fully expect can emerge stronger on the other side."

In hindsight, that sounds so na?ve! A full year later, Dr. Fauci is still leading the daily news, restaurant capacity is still limited, vacations are still being deferred and the Cubs have yet to play in front of live fans (though they will be allowed 25% of capacity for opening day). But the lingering effect of Covid-19 didn't stop the stock market. On March 23, 2021, the S&P 500 recorded its largest one-year price increase in the past 85 years, 75%. And just a few days earlier, on March 18, the Oakmark Fund recorded its largest ever one-year increase of 113%. Last year was just another example of how difficult the market tim ing game can be and why Oakmark doesn't play it. Instead of trying to time the market, we encourage you to consider portfolio rebalancing. If you invested near the low last March to restore your equity allocation, congratulations, but now you may want to make sure it hasn't grown too large.

Following a painful four years for value investors, we've finally had two consecutive quarters where value has outperformed growth, the first time in more than four years. In my September commentary (), I wrote about the stock market having seemingly bifurcated into two markets: one including many tech and other rapid growth stocks that had become very expensive relative to historic norms and one with more traditional businesses that had not. The two-quarter outperformance of value has done very little to change that. Low P/E2 stocks remain priced at historically large discounts to

high-growth stocks. Though we certainly don't expect the market or our Funds to reproduce the returns of the past year, we remain excited about the prospects for our portfolios. We expect the market's two-tiered valuation gap to continue to narrow, and we believe our Funds are positioned to benefit.

Think Again We attribute our outperformance over the past year to two pri mary factors: how quickly we rethought our financial models at the onset of the pandemic and our much longer forecast hori zon. While most investors worried about how bad 2020 might be, we focused on how good things could be in 2025. As is often the case during a crisis, we had more confidence in our accuracy forecasting 2025 than 2020. Certainly, the economic downturn made us think again about many of the assumptions that underlie our business value estimates, but for most compa nies, we found that the loss in intrinsic value was much less than the stock price decline.

In his book Think Again,3 author Adam Grant points out, "Intelligence is traditionally viewed as the ability to think and learn. Yet in a turbulent world, there's another set of cognitive skills that might matter more: the ability to rethink and unlearn." The quote at the top of the page, a classic example of not rethinking assumptions, came from an employee at BlackBerry. In 2009, BlackBerry accounted for nearly half the smartphone market, but in five short years, its market share fell to 1% because it refused to rethink the importance of its physi cal keyboard. It's nearly impossible to maintain success in either business or investing without frequently rethinking one's assumptions.

Grant, quoting work by his colleague Phil Tetlock, says we often get so caught up preaching, prosecuting or politicking that we don't take time to rethink our own views. Investment profes sionals spend a lot of time preaching about the merits of their favorite investments, prosecuting those who disagree and poli ticking to broaden support for their beliefs. In contrast, Grant says if you think like a scientist, you simply search for the truth. He says, if you are truly a scientist, you are "expected to doubt what you know, be curious about what you don't know, and update your views based on new data." Scientists' work is also subject to replication and extensive peer review, which results in rejecting incorrect theories. Grant's book was not aimed specifically at investors, but it sure could have been. His description of thinking like a scientist is exactly what Oakmark asks of its research analysts. Further, we also submit each ana lyst's research to extensive internal peer review to reduce our error rate. If investors can't shift to scientist mode and search for new information that might change their minds, they are doomed.

See accompanying Disclosures and Endnotes on page 96.

2 OAKMARK FUNDS

Oakmark and Oakmark Select Funds

Portfolio Manager Commentary (continued)

March 31, 2021

Before you're tempted to dismiss this by saying investors tend to be smarter than average, Grant quotes studies showing that the higher someone's IQ, the more resistant they are to rethink ing their beliefs. He explains, "In psychology there are at least two biases that drive this pattern. One is confirmation bias: see ing what we expect to see. The other is desirability bias: seeing what we want to see. These biases don't just prevent us from applying our intelligence. They can actually contort our intelli gence into a weapon against the truth." That's one reason it can be so difficult for a smart investor to give up on a stock when its thesis comes into question.

Grant extensively discusses how intelligent people can fall prey to the psychological irony referred to as the Dunning-Kruger effect--the inverse relationship between our competence in a subject and our confidence in our opinion. It's why in a group of football fans, the most vocal critic is often the one who knows the least about the sport. It may also explain our unwill ingness to ask for directions when we are lost. Our brain is telling us to rely on ourselves at the very time it is most impor tant to challenge our assumptions and seek new input. As investors, we can't ever think we know so much that we don't need to bother with new information.

We've written previously about the delicate balancing act facing investors between seemingly contradictory traits. You have to be patient, but you can't be stubborn. Risk averse, but not fearful. Confident, but not arrogant. It's no wonder that investing is such a challenge. Grant believes that the state for optimum decision-making is "confident humility--having faith in our capability while appreciating that we may not have the right solution or even be addressing the right problem. That gives us enough doubt to reexamine our old knowledge and enough confidence to pursue new insights." The best investors are

always seeking new information, especially information that could prove them wrong.

In scientist mode, getting to the right answer is more important than being right. If you were to observe Oakmark's weekly meet ings where new stock ideas are presented, you might ask how colleagues at a firm that so highly values collaboration and col legiality can have such aggressive arguments with one another. But, as Grant asserts, "The absence of conflict is not harmony, it's apathy." Clearly, our investment team is not apathetic about stocks we are considering buying! The more mistakes we can identify before we invest, the better off our clients will be. Grant goes on to say that "when I argue with someone it's not a dis play of disrespect--it's a sign of respect. It means I value their views enough to contest them. If their opinion didn't matter to me, I wouldn't bother." The intensity of our debates definitely shows that Oakmark's investment team has a lot of mutual respect for each other. And that's why after our knockdown, drag-out arguments, we can all enjoy lunch together.

In closing, I'll largely repeat what I said a year ago. We hope that by the time we are writing our next quarterly report, most of us will have had the opportunity to be vaccinated and will be well on our way to enjoying the freedoms we took for granted before 2020. By next quarter, capacity limits at restaurants and Wrigley Field should be much higher, families will again take summer vacations, employees will return to the office and someone other than Dr. Fauci will lead the evening news. If those things happen, we expect a very strong economy. Importantly, as we continue to rethink our assumptions, the window for the return to normal is narrowing. Last year, as the disease progressed, the debate became which year would finally be normal again. Now, it's which quarter. That's progress.

See accompanying Disclosures and Endnotes on page 96.

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