Institutional Research Archive

Hedge Fund Letters Archive

Browse the world's most comprehensive database of hedge fund investor letters, sorted by recent quarter. Access primary source research from leading institutional managers.

Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

Home Letters Funds Account

Oakmark Select Fund 2023 Q2 Investor Letter | Buyside Digest

Back to Fund Profile (Oakmark Select Fund)

Primary Source Intelligence • Q2 2023 Letter Analysis

Oakmark Select Fund Quarterly Analysis

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

Fund Returns

QTD+12.4%

Annualized+12.08%

Positioning StanceConstructive

GeographyUS

Digest Analysis

Quick Take

"Oakmark Select outperformed with 12.4% quarterly returns by focusing on intrinsic value rather than traditional value metrics. Added ConocoPhillips during energy sector weakness, viewing it as undervalued despite strong fundamentals and shareholder return potential."

Executive Summary

The Oakmark Select Fund returned 12.4% in Q2 2023, outperforming the S&P 500's 8.7% return, bringing year-to-date performance to 24.7% versus 16.9% for the index. This outperformance is particularly noteworthy given the underperformance of traditional value indexes, with the Russell 1000 Value Index lagging the Growth Index by 24 percentage points year-to-date. The fund's success highlights the advantage of focusing on intrinsic value rather than traditional value metrics. Top contributors were First Citizens BancShares and Lithia Motors, while Warner Bros. Discovery and APA Corporation were the largest detractors. The energy sector pullback created opportunities, leading to the addition of ConocoPhillips as a new position. The managers believe ConocoPhillips can return over 100% of its current market cap to shareholders over the next decade while growing production at mid-single-digit rates. The underperformance of traditional value continues to create new opportunities in strong businesses at attractive prices.

Unlock Full Institutional Analysis

Sign in or create a free account to unlock full commentary, extracted equity pitches, and direct outbound manager source links with your 3 quarterly credits.

Sign In to Unlock (3 Free Credits)View Pricing Tiers

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

68%

CautiousHigh

Moderate (68%)

The fund demonstrates moderate-high conviction through concentrated positioning (non-diversified fund structure) and detailed analysis of individual holdings like ConocoPhillips with specific 10-year return projections. However, only one new position was added, and position sizing details are limited beyond percentage allocations.

Growth Outlook

60%

BearishBullish

Neutral (60%)

The managers express constructive optimism about finding opportunities, particularly noting that traditional value underperformance is creating new opportunities to invest in strong businesses at cheap prices. They view current market conditions as favorable for their value-focused approach.

Risk Appetite

50%

DefensiveAggressive

Balanced (50%)

The fund added one new position (ConocoPhillips) and eliminated none, suggesting a measured approach to risk. The positioning appears balanced with selective additions rather than aggressive deployment across the board.

Capital Deployment

25%

De-riskingDeploying

De-risking (25%)

Limited deployment activity with only one new position added (ConocoPhillips) and no eliminations. No cash level changes mentioned. This represents selective, measured deployment rather than aggressive capital deployment.

Forward Guidance

65%

CautiousExpansionary

Expansionary (65%)

The managers express clear intent to capitalize on opportunities created by traditional value underperformance, stating they believe they can invest in strong businesses at cheap prices. The 10-year outlook for ConocoPhillips shows confidence in deployment decisions.

Language Signal

70%

BearishBullish

Bullish (70%)

Language is predominantly positive with terms like 'opportunity,' 'attractive,' 'undervalued,' 'cheap prices,' and 'strong businesses.' Risk language is minimal and mostly relates to standard disclaimers rather than specific concerns.

Perceived Risk

20%

Low RiskElevated

Low Risk (20%)

Risk discussion is minimal and largely confined to standard disclaimers about value stock underperformance and fund concentration. No specific macro, systemic, or market risks are identified or discussed in the investment commentary.

Opportunity Density

75%

ScarceAbundant

Abundant (75%)

The managers explicitly state that traditional value underperformance is creating new opportunities to invest in strong businesses at cheap prices. They view the current environment as rich with opportunities, particularly in energy where quality companies trade at discounted multiples.

Time Horizon

80%

Short-TermLong-Term

Decade+ (80%)

The fund demonstrates a long-term orientation with explicit 10-year projections for ConocoPhillips and language about opportunities for 'long-term investors.' The focus on intrinsic value and willingness to invest during sector weakness suggests patience and multi-year investment horizons.