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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Oakmark Global Select Fund 2023 Q1 Investor Letter | Buyside Digest

Back to Fund Profile (Oakmark Global Select Fund)

Primary Source Intelligence • Q1 2023 Letter Analysis

Oakmark Global Select Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Oakmark Global Select Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+9.1%

Annualized+7.73%

Positioning StanceConstructive

GeographyGlobal

Digest Analysis

Quick Take

"Oakmark Global Select outperformed in Q1 2023 driven by Alphabet's AI positioning and cost discipline. Despite banking crisis headwinds affecting AIG, the fund maintains conviction in undervalued quality companies with durable advantages."

Executive Summary

The Oakmark Global Select Fund returned 9.1% in Q1 2023, outperforming the MSCI World Index's 7.7% return. Alphabet was the top contributor, benefiting from management's positioning as an AI-first company at an inflection point, with AI expected to drive revenue and profit growth similar to mobile computing's impact. The fund appreciates Alphabet's cost discipline transformation and believes the stock trades at its lowest relative P/E since IPO when adjusted for losses and cloud value. AIG was the top detractor due to banking crisis concerns, though the managers view this as different from the global financial crisis and believe AIG's core general insurance business drives most value with significant underwriting improvements. The fund initiated a position in Intercontinental Exchange, viewing it as an excellent exchange operator trading at an undeserved discount to peers despite attractive economics across its three business segments. Portfolio positioning ended with 53.7% in the U.S., 34.9% in U.K./Europe, and 11.4% in Asia.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

78%

CautiousHigh

High Conviction (78%)

High conviction evidenced by concentrated portfolio with named, sized positions (Alphabet 11%, AIG 4%, ICE 4%). Detailed fundamental analysis with specific catalysts and timeframes. Willingness to hold AIG through banking crisis volatility and initiate new position demonstrates strong conviction in research process.

Growth Outlook

25%

BearishBullish

Bearish (25%)

Management acknowledges ongoing challenging macroeconomic climate and banking crisis concerns, but expresses confidence in specific business prospects and sees AI as reaching an inflection point. Mixed outlook with cautious optimism.

Risk Appetite

40%

DefensiveAggressive

Defensive (40%)

Fund actively rotated positions, selling four holdings and initiating new position in ICE. Maintains concentrated positions in high-conviction names like Alphabet (11% allocation) and AIG (4% allocation) despite headwinds, showing selective risk appetite.

Capital Deployment

5%

De-riskingDeploying

De-risking (5%)

Portfolio rotation activity with four sales and one new initiation suggests capital reallocation rather than net deployment. No cash level changes mentioned, indicating neutral deployment stance with focus on optimizing existing exposure.

Forward Guidance

30%

CautiousExpansionary

Cautious (30%)

Expects margin improvements over next couple years and mortgage volumes to revert to historical norms. Selective deployment bias with focus on companies offering more potential upside, but acknowledges near-term pressures.

Language Signal

35%

BearishBullish

Bearish (35%)

Balanced language with positive terms like 'attractive,' 'excellent,' 'positioned well,' and 'durable competitive advantages' offset by risk language including 'challenging,' 'concerns,' 'pressured,' and 'crisis.' Slightly more constructive than cautious overall.

Perceived Risk

55%

Low RiskElevated

Moderate Risk (55%)

Moderate risk acknowledgment with specific discussion of banking crisis, macroeconomic challenges, and interest rate impacts on mortgage volumes. Risks are named and analyzed but not central to the investment thesis, with managers distinguishing current environment from global financial crisis.

Opportunity Density

65%

ScarceAbundant

Abundant (65%)

Selective opportunities identified with managers finding names that offer 'more potential upside' and initiating new position in ICE. Focus on companies trading at discounts to intrinsic value suggests reasonable opportunity set within their value framework.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

Multi-year outlook with expectations for margin improvement 'over the next couple of years' and mortgage volumes to 'eventually revert to historical norms.' Focus on durable competitive advantages and secular growth outlooks indicates medium to long-term investment horizon.