| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 12.9% | 4.8% | 14.1% |
The Oakmark Fund generated strong absolute returns in 2025 but trailed the S&P 500 as momentum investing dominated markets. A simple strategy of buying stocks in the top quintile of trailing returns produced 36% gains versus 18% for the S&P 500, marking the second strongest momentum period since 1998 after the dot-com bubble. This momentum has driven the S&P 500's P/E ratio from 17 to 22 times earnings since 2022, while the average stock multiple increased only modestly. The Oakmark Fund trades at 13 times earnings with less than 5% technology exposure, compared to the S&P 500's 35% technology weighting and 22 times multiple. The fund's correlation to the S&P 500 has reached its lowest level since the dot-com era, providing maximum diversification benefit. Management believes the momentum trend will eventually reverse, positioning Oakmark favorably for 2026 and beyond as value stocks catch up to their expensive growth counterparts.
The current momentum-driven market has created an unusual opportunity for value investors, as the Oakmark Fund trades at historically attractive valuations relative to the increasingly concentrated and expensive S&P 500.
The manager believes momentum trends will eventually reverse, positioning Oakmark well for 2026 and beyond as value stocks catch up to growth. The fund's low correlation and valuation relative to the S&P 500 creates an opportunity to increase expected returns while lowering risk.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 8 2026 | 2025 Q4 | - | Concentration, diversification, large cap, momentum, risk, technology, value | - | The past two years have rewarded momentum investing, with stocks in the top quintile of trailing nine-month returns generating 91% cumulative returns versus 47% for the S&P 500. This momentum period ranks as the second strongest since 1998, only behind the dot-com bubble era of 1998-1999. Value investing has underperformed as investors have been rewarded for buying stocks that have already gone up the most. The Oakmark Fund trades at 13 times expected earnings, well below the S&P 500's 22 times, creating an attractive risk-adjusted opportunity for value-oriented investors. |
| Oct 10 2025 | 2025 Q3 | CNC, GOOG, TRGP, UNP | Artificial Intelligence, energy, financials, industrials, Value Investing |
TRGP US UNP US |
Oakmark highlights continued strength in financials and energy while staying underweight in technology, emphasizing valuation discipline amid concentrated AI-driven markets. Top contributors included Alphabet and Citigroup, reflecting confidence in durable AI monetization and financial normalization. The fund added Targa Resources and Union Pacific, underscoring interest in quality cyclicals with infrastructure and logistics exposure. |
| Jul 17 2025 | 2025 Q2 | AMZN, C, CRM, GPN, NKE, ZBH | fundamentals, long-term, Quality, value |
C GPN AMZN NKE CRM ZBH |
|
| Mar 31 2025 | 2025 Q1 | - | - | - | |
| Dec 31 2024 | 2024 Q4 | ABNB, CG, CNC, ELV, GEHC, KDP, WFC | - | - | |
| Sep 30 2024 | 2024 Q3 | CBRE, GPC, MRK, SCHW | - | - | |
| Jun 30 2024 | 2024 Q2 | AOL, GM, GME, HD | - | - | |
| Apr 15 2024 | 2024 Q1 | DAL, DE, KVUE | - | - | |
| Aug 1 2024 | 2023 Q4 | BLK | - | - | |
| Sep 30 2023 | 2023 Q3 | 0R0K LN, CNC, CTVA, CVS CN, DHR, PSX | - | - | |
| Jun 30 2023 | 2023 Q2 | BAX, CE, CSL, FIZN, IQV | - | - | |
| Mar 31 2023 | 2023 Q1 | GOOG | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Momentum2025 was characterized by extreme momentum dynamics with capital flowing into immediate winners while perceived losers saw unprecedented pressure. Market leadership concentrated in lower-quality, speculative, and cyclically sensitive stocks. The momentum trade has been exceptionally profitable short-term but timing the inevitable reversal remains challenging. |
Cyclical Speculation Leadership Volatility Reversal |
ValueManager emphasizes investing in controlled companies trading at significant discounts to NAV, with European holding companies showing discounts of 30-68%. The strategy focuses on securities mispricing where real value exists, contrasting with overvalued technology stocks. |
Discounts NAV Mispricing Undervalued Controlled | |
| 2025 Q3 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
EnergyBHE operates regulated utilities serving 5.4 million customers and natural gas pipelines. The business faces significant investment needs driven by AI computing demand and wildfire risk mitigation, particularly in the Western U.S. |
Regulated Utilities Natural Gas Renewable Energy Grid Infrastructure | |
FinancialsEuropean banks have been rehabilitated after years in purgatory, with returns of 77% in 2025. Return on equity has normalized above 12% following exit from ultra-low rates, while capital positions have been rebuilt. However, supportive factors are well-appreciated by markets, reflected in significant valuation re-rating. |
Banks Return On Equity Interest Rates Capital Valuations | |
IndustrialsThe fund increased exposure to high-quality industrial businesses with potential for cyclical upturn. Added Quanta Services for AI data center build-out, Hubbell for electrical grid upgrades, Old Dominion for freight cycle recovery, and Waste Connections for secondary market focus. |
Infrastructure Automation Transportation Electrical Equipment Waste Management | |
ValueThe manager continues to find attractive value opportunities despite expensive markets, purchasing undervalued companies like Centene, GlaxoSmithKline, Carrefour and PayPal trading at low multiples with strong fundamentals. |
Undervalued Low Multiples Contrarian Opportunistic | |
| 2025 Q2 |
Long Term |
|
QualityThe company emphasizes investing in businesses with excellent economics, durable competitive advantages, and high-integrity management. This quality focus is evident in concentrated equity holdings and operating business acquisitions. |
Durable Advantages Management Quality Economic Moats Competitive Position | |
ValueThe manager continues to find attractive value opportunities despite expensive markets, purchasing undervalued companies like Centene, GlaxoSmithKline, Carrefour and PayPal trading at low multiples with strong fundamentals. |
Undervalued Low Multiples Contrarian Opportunistic |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 17, 2025 | Fund Letters | William C. Nygren | C | Citigroup Inc. | Financials | Diversified Banks | Bull | New York Stock Exchange | Banks, buybacks, Regulation, restructuring, valuation | Login |
| Jul 17, 2025 | Fund Letters | William C. Nygren | GPN | Global Payments Inc. | Financials | Transaction & Payment Processing Services | Bull | New York Stock Exchange | Acquisitions, capital returns, Fintech, Payments, synergies | Login |
| Jul 17, 2025 | Fund Letters | William C. Nygren | AMZN | Amazon.com, Inc. | Consumer Discretionary | Broadline Retail | Bull | NASDAQ | AI, cloud, ecommerce, Logistics, network effects, scale | Login |
| Jul 17, 2025 | Fund Letters | William C. Nygren | NKE | NIKE, Inc. | Consumer Discretionary | Textiles, Apparel & Luxury Goods | Bull | New York Stock Exchange | Apparel, Brand, consumer, Footwear, Margins, turnaround | Login |
| Jul 17, 2025 | Fund Letters | William C. Nygren | CRM | Salesforce, Inc. | Information Technology | Application Software | Bull | New York Stock Exchange | AI, CRM, Margins, SaaS, Software, transformation | Login |
| Jul 17, 2025 | Fund Letters | William C. Nygren | ZBH | Zimmer Biomet Holdings, Inc. | Health Care | Health Care Equipment & Supplies | Bull | New York Stock Exchange | aging, healthcare, Medical devices, Orthopedics, robotics, turnaround | Login |
| Oct 10, 2025 | Fund Letters | William C. Nygren | TRGP US | Targa Resources Corp. | Energy | Midstream | Bull | NYSE | cashflow, dividend, energy, Gas, infrastructure, midstream, valuation | Login |
| Oct 10, 2025 | Fund Letters | William C. Nygren | UNP US | Union Pacific Corp. | Industrials | Railroads | Bull | NYSE | efficiency, infrastructure, Logistics, merger, Pricing, Rail, Value | Login |
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