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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
Buyside Digest is not affiliated with, and does not endorse, Oakmark Fund International Small Cap. This analysis is provided for institutional research purposes only and is not investment advice.
"The fund underperformed in Q2 but used market dislocations to initiate six new positions at meaningful discounts to intrinsic value. Semiconductor equipment strength validated the recovery thesis, while temporary headwinds in pulp and paper and AI-driven sector deratings created entry points."
The Oakmark International Small Cap Fund returned 4.82% in Q2 2026, underperforming the MSCI World ex USA Small Cap Index which returned 7.94%. Information technology and industrials were the largest contributors, while consumer staples and materials detracted. The fund is concentrated in Europe (58.2%), Japan (12.1%), and the U.K. (10.4%), with 12.2% in emerging markets. The managers initiated six new positions during the quarter, including Birkenstock, dormakaba, Hiab, Reply, SATS, and Scout24, all purchased at what they view as significant discounts following sector-wide deratings. Jenoptik was the top contributor, benefiting from strong semiconductor equipment orders that support the fund's recovery thesis. Valmet was the top detractor amid a challenging European board market, though management maintained guidance and the managers believe the long-term thesis remains intact. The managers continue to evaluate opportunities based on competitive advantages, long-term cash flows, and valuation, viewing AI-driven sector deratings and cyclical downturns as opportunities to establish positions in quality businesses at attractive prices.
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