<PAGE>
As filed with the Securities Exchange Commission on March 29, 1996
Securities Act registration no. 33-38953
Investment Company Act file no. 811-06279
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
________________________________________________________________________________
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 14 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 16 [X]
________________________________________________________________________________
HARRIS ASSOCIATES INVESTMENT TRUST
(Registrant)
Two North La Salle Street, Suite 500
Chicago, Illinois 60602-3790
Telephone number 312/621-0600
________________________________________________________________________________
Victor A. Morgenstern Cameron S. Avery
Harris Associates L.P. Bell, Boyd & Lloyd
Two North La Salle Street, Suite 500 70 West Madison Street, #3300
Chicago, Illinois 60602 Chicago, Illinois 60602
(Agents for service)
________________________________________________________________________________
Amending Parts A and C and filing Exhibit
________________________________________________________________________________
It is proposed that this filing will become effective:
X immediately upon filing pursuant to rule 485(b)
_____
_____ on ____________________ pursuant to rule 485(b)
_____ 60 days after filing pursuant to rule 485(a)(1)
_____ on ____________________ pursuant to rule 485(a)(1)
_____ 75 days after filing pursuant to rule 485(a)(2)
_____ on ____________________ pursuant to rule 485(a)(2)
Registrant has elected to register an indefinite number of its shares of
beneficial interest, without par value, of the series designated The Oakmark
Fund, The Oakmark Small Cap Fund, The Oakmark Balanced Fund (formerly designated
The Oakmark Growth and Income Fund), The Oakmark International Fund and The
Oakmark International Emerging Value Fund, pursuant to Rule 24f-2 under the
Investment Company Act of 1940. Registrant's Rule 24f-2 Notice for its fiscal
period ended October 31, 1995 was filed on or about November 16, 1995.
________________________________________________________________________________
<PAGE>
HARRIS ASSOCIATES INVESTMENT TRUST
CROSS-REFERENCE SHEET PURSUANT TO RULE 495(a) OF REGULATION C
<TABLE>
<CAPTION>
ITEM LOCATION OR CAPTION*
---- ----------------------------------
Part A (Prospectus)
----------------------------
<S><C> <C>
1 (a) & (b) Front Cover
2 (a) Expenses
(b) & (c) Summary
3 (a) Financial Highlights
(b) Not Applicable
(c) Performance Information
(d) Financial Highlights
4 (a)(i) Other Information
(a)(ii)&(b) How the Funds Invest
(c) Risk Factors
5 (a) Management of the Funds
(b) Management of the Funds; Inside Back Cover; Expenses
(c) Management of the Funds
(d) Not applicable
(e) Inside Back Cover
(f) Expenses
(g) Management of the Funds
5 (a) Not applicable (the specified information is included in
registrant's 1994 annual reports to shareholders)
6 (a) Other Information
(b) Not Applicable
(c)-(e) Other Information
(f) Distributions
(g) Taxes
7 How to Purchase Shares; Shareholder Services
(a) Not Applicable
(b) How to Purchase Shares; Net Asset Value
(c) Not Applicable
(d) Front cover; How to Purchase Shares
(e) & (f) Not Applicable
8 (a)-(d) How to Redeem Shares
9 Not Applicable
</TABLE>
- --------------
*References are to captions within the part of the registration statement to
which the particular item relates except as otherwise indicated.
i
<PAGE>
<TABLE>
<CAPTION>
ITEM LOCATION OR CAPTION*
---- ----------------------------------
Part B (Statement of Additional Information)
--------------------------------------------
<S><C> <C>
10 (a) & (b) Front Cover
11 Table of Contents
12 Not Applicable
13 (a) The Funds; How the Funds Invest
(c) Investment Restrictions
(d) Not applicable
14 (a) & (b) Part A - Management of the Funds; Trustees and Officers
(c) Not Applicable
15 (a) Not Applicable
(b) Principal Shareholders
(c) Trustees and Officers
16 (a) & (b) Part A - Management of the Funds;
Part B - Investment Adviser; Trustees and Officers
(c) Not Applicable
(d) Custodian
(e)-(g) Not Applicable
(h) Custodian; Independent Public Accountants
(i) Not Applicable
17 (a)-(d) Portfolio Transactions
(e) Not Applicable
18 (a) & (b) Not Applicable
19 (a)-(c) Purchasing and Redeeming Shares
20 Additional Tax Information; Taxation of Foreign
Shareholders
21 (a)-(c) Not Applicable
22 (a) Not Applicable
(b) Performance Information
23 Financial Statements
</TABLE>
- --------------
*References are to captions within the part of the registration statement to
which the particular item relates except as otherwise indicated.
ii
<PAGE>
<TABLE>
<CAPTION>
ITEM LOCATION OR CAPTION*
---- ----------------------------------
Part C (Other Information)
--------------------------
<S> <C>
24 Financial statements and exhibits
25 Persons controlled by or under common control with
registrant
26 Number of holders of securities
27 Indemnification
28 Business and other connections of investment adviser
29 Principal underwriters
30 Location of accounts and records
31 Management services
32 Undertakings
</TABLE>
- --------------
*References are to captions within the part of the registration statement to
which the particular item relates except as otherwise indicated.
iii
<PAGE>
THE OAKMARK FUNDS
Supplement dated March 28, 1996 to
Prospectus dated March 1, 1996
FINANCIAL HIGHLIGHTS FOR NEW FUNDS
The Oakmark Small Cap Fund, The Oakmark Balanced Fund and The Oakmark
International Emerging Value Fund commenced operations on November 1, 1995. The
following table reflects the results of operations of each of those Funds during
the four months ended February 29, 1996 for a share outstanding throughout the
period. These results have not been audited by independent public accountants.
<TABLE>
<CAPTION>
International
Small Emerging
Cap Balanced Value
Fund Fund Fund
-------- ---------- -------------
(unaudited)
-------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $10.00 $10.00 $10.00
Income from Investment Operations:
Net Investment Income........................ (.02) .04 (.01)
Net Gains or Losses on Securities
(both realized and unrealized).............. .75 .45 .85
------ ------ ------
Total from Investment Operations........... .73 .49 .84
Less Distributions:
Dividends (from net investment income)....... .00 .00 .00
Distributions (from capital gains)........... .00 .00 .00
------ ------ ------
Total Distributions......................... .00 .00 .00
------ ------ ------
Net Asset Value, End of Period................ $10.73 $10.49 $10.84
====== ====== ======
Total Return.................................. 7.30% 4.90% 8.40%
Ratios/Supplemental Data:
Net Assets, End of Period ($ million)......... $ 33.6 $ 9.7 $ 13.5
Ratio of Expenses to Average Net Assets*..... 2.34% 2.50%(a) 2.50%(a)
Ratio of Net Income to Average Net Assets*... (.83)% 1.83%(a) (.54%)(a)
Portfolio Turnover Rate...................... 11.7% 2.8% 14.0%
Average Brokerage Commission Paid Per Share.. $ .0556 $ .0596 $ .0005
</TABLE>
___________
* Ratios for the period have been determined on an annualized basis.
(a) If Balanced Fund and International Emerging Value Fund had paid all of their
expenses and there had been no reimbursement by the investment adviser,
their ratios of expenses to average net assets would have been 4.26% and
4.72%, respectively, and their ratios of net income (loss) to average net
assets would have been 0.07% and (2.77%), respectively.
<PAGE>
PROSPECTUS
March 1, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT OBJECTIVE:
THE OAKMARK FUND LONG-TERM CAPITAL APPRECIATION
The Oakmark Fund invests primarily in equity securities.
- -----------------------------------------------------------------------------------------------
INVESTMENT OBJECTIVE:
THE OAKMARK LONG-TERM CAPITAL APPRECIATION
SMALL CAP FUND The Oakmark Small Cap Fund invests primarily in equity
securities of companies with small market capitalizations.
- -----------------------------------------------------------------------------------------------
INVESTMENT OBJECTIVE:
THE OAKMARK HIGH CURRENT INCOME AND
BALANCED FUND PRESERVATION AND GROWTH OF CAPITAL
The Oakmark Balanced Fund invests in a
diversified portfolio of equity and fixed-income securities.
- -----------------------------------------------------------------------------------------------
INVESTMENT OBJECTIVE:
THE OAKMARK LONG-TERM CAPITAL APPRECIATION
INTERNATIONAL FUND The Oakmark International Fund invests primarily in
equity securities of non-U.S. issuers.
- -----------------------------------------------------------------------------------------------
INVESTMENT OBJECTIVE:
THE OAKMARK LONG-TERM CAPITAL APPRECIATION
INTERNATIONAL EMERGING The Oakmark International Emerging Value Fund invests primarily
VALUE FUND in equity securities of non-U.S. issuers that have small market
capitalizations or that are located in emerging markets.
- -----------------------------------------------------------------------------------------------
NO LOAD - NO SALES CHARGE
NO 12b-1 FEES
MINIMUM INVESTMENT TICKER SYMBOLS
Initial purchase - $1,000 or $2,500 Oakmark Fund - OAKMX
(see "How to Purchase Shares") Small Cap Fund - OAKSX
Subsequent investments - $100 Balanced Fund - (not yet assigned)
International Fund - OAKIX
International Emerging Value Fund - (OAKEX)
- -----------------------------------------------------------------------------------------------
</TABLE>
Each "Fund" is a series of Harris Associates Investment Trust. The Funds may
invest to a limited extent in high-yield, high-risk bonds and in other
securities that entail certain risks. See "Risk Factors."
This prospectus contains information you should know before investing. Please
retain it for future reference. A Statement of Additional Information regarding
the Funds dated the date of this prospectus has been filed with the Securities
and Exchange Commission and (together with any supplement to it) is incorporated
by reference. The Statement of Additional Information may be obtained at no
charge by writing or telephoning the Trust at its address or telephone number
shown inside the back cover.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Highlights............................................................. 2
Shareholder Transaction Expenses....................................... 3
Annual Fund Operating Expenses......................................... 4
Financial Highlights................................................... 5
The Funds.............................................................. 6
How the Funds Invest................................................... 7
Investment Techniques.................................................. 9
Risk Factors........................................................... 11
Restrictions on the Funds' Investments................................. 13
How to Purchase Shares................................................. 13
How to Redeem Shares................................................... 15
Shareholder Services................................................... 18
Net Asset Value........................................................ 18
Distributions.......................................................... 19
Taxes.................................................................. 19
Management of the Funds................................................ 20
Trustees and Officers.................................................. 22
Performance Information................................................ 24
Other Information...................................................... 24
</TABLE>
- ------------------------------------------------------------------------
| QUESTIONS ABOUT YOUR ACCOUNT: |
| If you have questions about your account, please call the Funds' |
| transfer agent at 1-800-626-9392. |
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
| 24-HOUR NET ASSET VALUE HOTLINE: |
| To obtain the current net asset value per share of either Fund, |
| please call 1-800-GROWOAK (1-800-476-9625). |
- ------------------------------------------------------------------------
<PAGE>
HIGHLIGHTS
HARRIS ASSOCIATES INVESTMENT TRUST (the "Trust") provides investors an
opportunity to pool their money to achieve economies of scale and
diversification, and to take advantage of the professional investment expertise
of Harris Associates L.P. (the "Adviser").
The Trust currently issues shares in five series (collectively, the
"Funds" and generally, a "Fund"). Each series has distinct investment objectives
and policies, and a shareholder's interest is limited to the series in which he
or she owns shares. The five series are: The Oakmark Fund ("Oakmark Fund"), The
Oakmark Small Cap Fund ("Small Cap Fund"), The Oakmark Balanced Fund ("Balanced
Fund"), The Oakmark International Fund ("International Fund") and The Oakmark
International Emerging Value Fund ("International Emerging Fund"). Each is a
"no-load" fund, and there are no sales or 12b-1 charges. There are no redemption
fees except in the case of shares of Small Cap Fund or International Emerging
Fund held less than six months, for which there is a 2% redemption fee payable
to the Fund.
The Trust is designed for long-term investors, including those who wish
to use shares of one or more series as a funding vehicle for tax-deferred
retirement plans (including tax-qualified retirement plans and Individual
Retirement Account (IRA) plans), and not for investors who intend to liquidate
their investments after a short period of time. Only Balanced Fund is intended
to present a balanced investment program between growth and income.
The chief consideration in selecting equity securities for each Fund's
portfolio is the size of the discount of market price relative to the economic
value of the security as determined by the Adviser. The Trust's investment
philosophy is predicated on the belief that over time market price and value
converge and that investment in securities priced significantly below long-term
value presents the best opportunity to achieve each Fund's objective of long-
term capital appreciation.
OAKMARK FUND seeks long-term capital appreciation by investing primarily
in equity securities.
SMALL CAP FUND seeks long-term capital appreciation by investing
primarily in equity securities of companies with small market
capitalizations.
BALANCED FUND seeks high current income and preservation and growth of
capital by investing in a diversified portfolio of equity and fixed-
income securities.
INTERNATIONAL FUND seeks long-term capital appreciation by investing
primarily in equity securities of non-U.S. issuers.
INTERNATIONAL EMERGING FUND seeks long-term capital appreciation by
investing primarily in equity securities of non-U.S. issuers that have
small market capitalizations or that are located in emerging markets.
RISKS
The Funds are intended for long-term investors who can accept
fluctuations in value and other risks associated with seeking the investment
objectives of the respective Funds through investments in the types of
securities in which the Funds may invest. You should understand and consider
carefully the risks involved in a Fund before investing in that Fund. See
"Risk Factors" for a more detailed discussion.
2
<PAGE>
PURCHASES
The minimum initial investment for Small Cap Fund and International
Emerging Fund is $1,000 and for each other Fund is $2,500 ($1,000 for an IRA,
UGMA or UTMA); additional investments must be at least $100. Shares may be
purchased by check, by bank wire, by electronic transfer or by exchange. See
"How to Purchase Shares."
REDEMPTIONS
For information on redeeming Fund shares, including the special
redemption privileges, see "How to Redeem Shares."
NET ASSET VALUE
The purchase and redemption price of a Fund's shares is the net asset
value per share. The net asset value is determined as of the close of regular
session trading on the New York Stock Exchange. See "Net Asset Value."
ADVISER
Harris Associates L.P. (the "Adviser") provides management and investment
advisory services to the Funds. See "Management of the Funds."
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
OAKMARK,
BALANCED AND SMALL CAP AND
INTERNATIONAL INT'L EMERGING
FUNDS FUNDS
------------- --------------
<S> <C> <C>
Commission to purchase shares (sales load)..... None None
Commission to reinvest dividends............... None None
Deferred sales load............................ None None
Redemption fees/(a)/........................... None 2%/(b)/
Fees to exchange shares/(c)/................... None None
</TABLE>
- --------------
(a) If you request payment of redemption proceeds by wire, you must pay the
cost of the wire (currently $5).
(b) This fee, payable to the Fund, is imposed only if you redeem shares of
the Fund within six months after purchase (other than by reinvestment of
dividends or distributions), determined on a first-in, first-out basis.
(c) There is no fee for an exchange between the Funds. There is a charge of
$5 for an exchange from any Fund into Oakmark Units as described under
"How to Purchase Shares - By Exchange."
3
<PAGE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets)
The following table is intended to help you understand the costs and
expenses that an investor in the Funds may bear directly or indirectly. For a
more complete explanation of the fees and expenses borne by the Funds, see the
discussions under the prospectus headings "How to Purchase Shares" and
"Management of the Funds", as well as the Statement of Additional Information
incorporated by reference into this prospectus.
<TABLE>
<CAPTION>
INT'L
OAKMARK SMALL CAP BALANCED INT'L EMERGING
FUND FUND FUND FUND FUND
===== ===== ===== ===== =====
<S> <C> <C> <C> <C> <C>
Investment management fees (a)................ 1.00% 1.25% .75% 1.00% 1.25%
12b-1 fees.................................... None None None None None
Other expenses (after reimbursements of
certain expenses)(b)........................ .17 1.05 1.75 .40 1.25
----- ----- ----- ----- -----
Total Fund operating expenses (after
reimbursement of certain expenses)...... 1.17% 2.30% 2.50% 1.40% 2.50%
===== ===== ===== ===== =====
</TABLE>
- ----------
(a) See "Management of the Funds" for rates of fees at various asset levels.
(b) Because Small Cap, Balanced and International Emerging Funds are newly
organized, their percentages shown for "Other Expenses" are estimates and,
in the case of International Emerging Fund, have been computed giving
effect to the Adviser's agreement to limit the Fund's ordinary operating
expenses. See "Management of the Funds." Absent that limitation, the "Other
Expenses" and "Total Fund Operating Expenses" of International Emerging
Fund would be estimated to be 2.55% and 3.80%, respectively.
The following example illustrates the expenses that you would pay on a
$1,000 investment in each Fund over various time periods assuming (1) a 5%
annual rate of return, (2) the operating expense percentages listed in the
table above remain the same through each of the periods, (3) reinvestment of
all dividends and capital gain distributions, and (4) redemption at the end of
each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Oakmark Fund $12 $37 $64 $142
Small Cap Fund 23 72 N/A N/A
Balanced Fund 25 78 N/A N/A
International Fund 14 44 77 168
International Emerging Fund 25 78 N/A N/A
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.
4
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below reflect the results of the operations of Oakmark Fund
and International Fund for a share outstanding throughout the periods shown and
have been audited by Arthur Andersen LLP, independent public accountants. These
tables should be read in conjunction with the Funds' financial statements and
notes thereto, which may be obtained from the Trust upon request without charge.
Small Cap Fund, Balanced Fund and International Emerging Fund did not commence
operations until November 1, 1995.
OAKMARK FUND
<TABLE>
<CAPTION>
Year Ended October 31,
------------------------------------------- Period Ended
1995 1994 1993 1992 Oct. 31, 1991(a)
--------- --------- --------- ------- ----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 25.21 $ 24.18 $ 17.11 $ 12.10 $ 10.00
Income from investment operations:
Net investment income (loss)................................ .30 .27 .17 (.03)(d) (.01)
Net gains or losses on securities
(both realized and unrealized)............................. 4.66 1.76 7.15 5.04 2.11
--------- --------- --------- ------- -------
Total from investment operations............................ 4.96 2.03 7.32 5.01 2.10
Less distributions:
Dividends (from net investment income)...................... (.23) (.23) (.04) - -
Distributions (from capital gains).......................... (1.47) (.77) (.21) - -
--------- --------- --------- ------- -------
Total distributions......................................... (1.70 ) (1.00) (.25) - -
--------- --------- --------- ------- -------
Net asset value, end of period.............................. $ 28.47 $ 25.21 $ 24.18 $ 17.11 $ 12.10
========= ========= ========= ======= =======
Total return................................................ 21.55% 8.77% 43.21% 41.40% 87.10%*
Ratios/supplemental data:
Net assets, end of period ($ million)....................... $2.827.1 $1,677.3 $1,107.0 $114.7 $ 4.8
Ratio of expenses to average net assets..................... 1.17% 1.22% 1.32% 1.70% 2.50%(b)*
Ratio of net income (loss) to average net assets............ 1.27% 1.19% .94% (.24)% (.66%)(c)*
Portfolio turnover rate..................................... 18% 29% 18% 34% 0%
</TABLE>
- ----------
* Ratios for the period have been determined on an annualized basis.
(a) From August 5, 1991, the date on which Fund shares were first offered for
sale to the public.
(b) If the Fund had paid all of its expenses and there had been no
reimbursement by the Adviser, this annualized ratio would have been 4.92%
for the period.
(c) Computed giving effect to the Adviser's expense limitation undertaking.
(d) Based on average month-end shares outstanding.
5
<PAGE>
INTERNATIONAL FUND
<TABLE>
<CAPTION>
Year Ended October 31,
--------------------------------- Period Ended
1995 1994 1993 Oct. 31, 1992(a)
------- -------- ------ ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period................................ $ 14.50 $ 14.09 $ 9.80 $ 10.00
Income from investment operations:
Net investment income............................................... .30 .21 .06 .26
Net gains or losses on securities (both realized and unrealized).... (.77) .43 4.48 (.46)
------- -------- ------ -------
Total from investment operations.................................... (.47) .64 4.54 (.20)
Less distributions:
Dividends (from net investment income).............................. - (.08) (.25) -
Distributions (from capital gains).................................. (1.06) (.15) - -
------- -------- ------ -------
Total distributions................................................. (1.06) (.23) (.25) -
------- -------- ------ -------
Net asset value, end of period...................................... $ 12.97 $ 14.50 $14.09 $ 9.80
======= ======== ====== =======
Total return........................................................ (3.06)% 4.62% 47.49% (22.81)%*
Ratios/supplemental data:
Net assets, end of period ($ million)............................... $ 819.7 $1,286.0 $815.4 $ 23.5
Ratio of expenses to average net assets............................. 1.40% 1.37% 1.26% 2.04%*
Ratio of net income (loss) to Average net assets.................... 1.40% 1.44% 1.55% 37.02%*
Portfolio turnover rate............................................. 27% 55% 21% 0%
</TABLE>
___________
* Ratios for the period have been determined on an annualized basis.
(a) From September 30, 1992, the date on which Fund shares were first offered
for sale to the public.
THE FUNDS
The mutual funds offered by this prospectus are OAKMARK FUND, SMALL CAP
FUND, BALANCED FUND, INTERNATIONAL FUND AND INTERNATIONAL EMERGING FUND. Each of
the Funds is a no-load, diversified "mutual fund." No Fund imposes any
commission or charge when shares are purchased, nor bears any 12b-1 charges.
The Funds are series of Harris Associates Investment Trust (the "Trust"),
which is authorized to issue shares in separate series. Each series is a
separate portfolio of securities and other assets, with its own investment
objective and policies.
Harris Associates L.P. (the "Adviser") provides investment advisory and
administrative services to the Funds.
6
<PAGE>
HOW THE FUNDS INVEST
The chief consideration in the selection of equity securities for each
Fund is the size of the discount of market price relative to the economic
value, or underlying value, of the security as determined by the Adviser. The
economic or underlying value of a security generally represents the per share
net present value of the issuer's estimated long-term cash flows. The Funds
may also employ the techniques described below under "Investment Techniques."
OAKMARK FUND seeks long-term capital appreciation by investing primarily
in equity securities. Although income is considered in the selection of
securities, the Fund is not designed for investors whose primary investment
objective is income.
The Fund invests principally in securities of U.S. issuers. However, it
may invest up to 25% of its total assets (valued at the time of investment) in
securities of non-U.S. issuers, including foreign government obligations and
foreign equity and debt securities that are traded over-the-counter or on
foreign exchanges. There are no geographic limits on the Fund's foreign
investments, but the Fund does not expect to invest more than 5% of its assets
in securities in emerging markets. See "Risk Factors - International
Investing" below.
SMALL CAP FUND seeks long-term capital appreciation by investing
primarily in equity securities. Under normal market conditions, the Fund
invests at least 65% of its total assets, taken at market value, in companies
whose market capitalization is less than $1 billion ("small cap companies") at
the time of purchase. A company's market capitalization is the total market
value of its outstanding common stock. Although income is considered in the
selection of securities, the Fund is not designed for investors whose primary
investment objective is income.
The Fund invests principally in securities of U.S. issuers. However, it
may invest up to 25% of its total assets (valued at the time of investment) in
securities of non-U.S. issuers, including foreign government obligations and
foreign equity and debt securities that are traded over-the-counter or on
foreign exchanges. There are no geographic limits on the Fund's foreign
investments, but the Fund does not expect to invest more than 5% of its assets
in securities in emerging markets. See "Risk Factors - International
Investing" below.
BALANCED FUND seeks high current income and preservation and growth of
capital by investing in a diversified portfolio of equity and fixed-income
securities. The Fund is intended to present a balanced investment program
between growth and income. It generally invests approximately 50-65% of its
total assets in equity securities, including securities convertible into
equity securities, 25-50% of its assets in U.S. Government securities and debt
securities rated at time of purchase within the two highest grades assigned by
Moody's Investors Service, Inc. ("Moody's") (Aaa or Aa) or by Standard &
Poor's Corporation ("S&P") (AAA or AA), and up to 20% in unrated or lower
rated debt securities (measured at market value at the time of investment).
The Fund invests principally in securities of U.S. issuers. However, it
may invest up to 10% of its total assets (valued at the time of investment) in
foreign securities, including foreign government obligations and foreign
equity and debt securities that are traded over-the-counter or on foreign
exchanges. The Fund has no geographic limits on its foreign investments, but
the Fund does not expect to invest more than 5% of its assets in securities in
emerging markets. See "Risk Factors - International Investing" below.
INTERNATIONAL FUND seeks long-term capital appreciation by investing
primarily in equity securities of non-U.S. issuers.
7
<PAGE>
The Adviser considers the relative political and economic stability of
the issuer's home country, the ownership status of the company, and the
company's accounting practices in evaluating the potential rewards and risks
of an investment opportunity. The Fund may invest in securities traded in
mature markets (for example, Japan, Canada and the United Kingdom), in less
developed markets (for example, Mexico and Thailand), and in selected emerging
markets (such as Peru and India). Investments in securities of non-U.S.
issuers, especially those traded in less developed or emerging markets,
present additional risk. There are no limits on the Fund's geographic asset
distribution, but, to provide adequate diversification, the Fund ordinarily
invests in the securities markets of at least five countries outside the
United States. See "Risk Factors - International Investing" below.
Some foreign governments have been engaged in programs of selling part or
all of their stakes in government owned or controlled enterprises
("privatizations"). The Adviser believes that privatizations may offer
opportunities for significant capital appreciation, and intends to invest
assets of the Fund in privatizations in appropriate circumstances. In certain
of those markets, the ability of foreign entities such as the Fund to
participate in privatizations may be limited by local law and/or the terms on
which the Fund may be permitted to participate may be less advantageous than
those afforded local investors. There can be no assurance that governments
will continue to sell companies currently owned or controlled by them or that
privatization programs will be successful.
The equity securities in which the Fund may invest include common and
preferred stocks and warrants or other similar rights and convertible
securities. The Fund may purchase securities of non-U.S. issuers directly or
in the form of American Depositary Receipts (ADRs), European Depositary
Receipts (EDRs), Global Depositary Receipts (GDRs), or other securities
representing underlying shares of non-U.S. issuers. Under normal market
conditions, the Fund invests at least 65% of its total assets, taken at market
value, in securities of non-U.S. issuers.
INTERNATIONAL EMERGING FUND seeks long-term capital appreciation by
investing primarily in equity securities of non-U.S. issuers that have small
market capitalizations or that are located in emerging markets.
The Adviser considers the relative political and economic stability of
the issuer's home country, the ownership structure of the company, and the
company's accounting practices in evaluating the potential rewards and risks
of an investment opportunity. The Fund invests in securities traded in both
developed and emerging markets. In those markets considered developed (for
example, Germany, France and Japan), the Fund invests in small cap companies,
generally expected to have market capitalizations under $1 billion. In
emerging markets (such as Brazil, Indonesia, Korea and Argentina), the Fund
considers companies of any capitalization. Investments in securities of non-
U.S. issuers, especially those traded in less developed or emerging markets,
present additional risks. There are no limits on the Fund's geographic asset
distribution, but, to provide adequate diversification, the Fund ordinarily
invests in the securities markets of at least five countries outside the
United States. See "Risk Factors - International Investing" below.
Some foreign governments have been engaged in programs of selling part or
all of their stakes in government owned or controlled enterprises
("privatizations"). The Adviser believes that privatizations may offer
opportunities for significant capital appreciation, and intends to invest
assets of the Fund in privatizations in appropriate circumstances. In certain
of those markets, the ability of foreign entities such as the Fund to
participate in privatizations may be limited by local law and/or the terms on
which the Fund may be permitted to participate may be less advantageous than
those afforded local investors. There can be no assurance that governments
will continue to sell companies currently owned or controlled by them or that
privatization programs will be successful.
The equity securities in which the Fund may invest include common and
preferred stocks and warrants or other similar rights and convertible
securities. The Fund may purchase securities of non-U.S. issuers directly or
in the form of ADRs, EDRs, Global Depositary Receipts (GDRs), or other
securities
8
<PAGE>
representing underlying shares of non-U.S. issuers. Under normal market
conditions, the Fund invests at least 65% of its total assets, taken at market
value, in securities of non-U.S. issuers.
___________________________
Under normal market conditions, each Fund expects to be substantially
fully invested in the types of securities described in the preceding
paragraphs. Within the limitations described in this prospectus, the
percentages of Fund assets invested in various types of securities will vary
in accordance with the judgment of the Adviser. To the extent that
investments meeting a Fund's criteria for investment are not available, or
when the Adviser considers a temporary defensive posture advisable, the Fund
may invest without limitation in high-quality corporate debt obligations of
U.S. companies or U.S. government obligations, or may hold cash in domestic or
foreign currencies or invest in domestic or foreign money market securities.
In seeking to achieve its investment objective, each Fund ordinarily
invests on a long-term basis, but on occasion may also invest on a short-term
basis (for example, where short-term perceptions have created a significant
gap between price and value). Occasionally, securities purchased on a long-
term basis may be sold within 12 months after purchase in light of a change in
the circumstances of a particular company or industry or in general market or
economic conditions.
INVESTMENT TECHNIQUES
EQUITY SECURITIES. The equity securities in which each Fund may invest
include common and preferred stocks and warrants or other similar rights and
convertible securities. The chief consideration in the selection of equity
securities for each Fund is the size of the discount of market price relative
to the economic value of the security as determined by the Adviser. The
Adviser's investment philosophy for those investments is predicated on the
belief that over time market price and value converge and that investment in
securities priced significantly below long-term value presents the best
opportunity to achieve long-term capital appreciation.
The Adviser uses several qualitative and quantitative methods in
analyzing economic value, but considers the primary determinant of value to be
the enterprise's long-run ability to generate cash for its owners. Once the
Adviser has determined that a security is undervalued, the Adviser will
consider it for purchase by a Fund, taking into account the quality and
motivation of the management, the firm's market position within its industry
and its degree of pricing power. The Adviser believes that the risks of
equity investing are often reduced if management's interests are strongly
aligned with the interests of its stockholders.
DEBT SECURITIES. Each Fund may invest in debt securities of both
governmental and corporate issuers. Each of Oakmark Fund and Small Cap Fund
may invest up to 25% of its assets, Balanced Fund may invest up to 20% of its
assets, and International Fund and International Emerging Fund may invest up
to 10% of its assets (valued at the time of investment), in debt securities
that are rated below investment grade, without a minimum rating requirement.
Lower-grade debt securities (commonly called "junk bonds") are obligations of
issuers rated BB or lower by S&P or Ba or lower by Moody's. Lower-grade debt
securities are considered speculative and may be in poor standing or actually
in default. Medium-grade debt securities are those rated BBB by S&P or Baa by
Moody's. Securities so rated are considered to have speculative
characteristics. See "Risk Factors." A description of the ratings used by
S&P and Moody's is included as an appendix to the Statement of Additional
Information.
SHORT SALES AGAINST THE BOX. Each Fund may sell short securities the
Fund owns or has the right to acquire without further consideration, a
technique called selling short "against the box." Short sales against the box
may protect the Fund against the risk of losses in the value of its portfolio
securities because any unrealized losses with respect to such securities
should be wholly or partially offset by a
9
<PAGE>
corresponding gain in the short position. However, any potential gains in such
securities should be wholly or partially offset by a corresponding loss in the
short position. Short sales against the box may be used to lock in a profit on
a security when, for tax reasons or otherwise, the Adviser does not want to
sell the security. The Trust does not currently expect that more than 20% of
any Fund's total assets would be involved in short sales against the box. For
a more complete explanation, please refer to the Statement of Additional
Information.
CURRENCY EXCHANGE TRANSACTIONS. Each Fund may engage in currency
exchange transactions either on a spot (i.e., cash) basis at the spot rate for
purchasing or selling currency prevailing in the foreign exchange market or
through a forward currency exchange contract ("forward contract"). A forward
contract is an agreement to purchase or sell a specified currency at a
specified future date (or within a specified time period) and price set at the
time of the contract. Forward contracts are usually entered into with banks
and broker-dealers, are not exchange-traded and are usually for less than one
year, but may be renewed.
Forward currency transactions may involve currencies of the different
countries in which a Fund may invest, and serve as hedges against possible
variations in the exchange rate between these currencies. The Funds' forward
currency transactions are limited to transaction hedging and portfolio hedging
involving either specific transactions or actual or anticipated portfolio
positions. Transaction hedging is the purchase or sale of a forward contract
with respect to a specific receivable or payable of a Fund accruing in
connection with the purchase or sale of portfolio securities. Portfolio
hedging is the use of a forward contract with respect to an actual or
anticipated portfolio security position denominated or quoted in a particular
currency. Each Fund may engage in portfolio hedging with respect to the
currency of a particular country in amounts approximating actual or
anticipated positions in securities denominated in such currency. When a Fund
owns or anticipates owning securities in countries whose currencies are
linked, the Adviser may aggregate such positions as to the currency hedged.
Although forward contracts may be used to protect a Fund from adverse currency
movements, the use of such hedges may reduce or eliminate the potentially
positive effect of currency revaluations on the Fund's total return.
OTHER INVESTMENT COMPANIES. Certain markets are closed in whole or in
part to equity investments by foreigners. A Fund may be able to invest in
such markets solely or primarily through governmentally authorized investment
vehicles or companies. Each Fund generally may invest up to 10% of its assets
in the aggregate in shares of other investment companies and up to 5% of its
assets in any one investment company, as long as no investment represents more
than 3% of the outstanding voting stock of the acquired investment company at
the time of investment.
Investment in another investment company may involve the payment of a
premium above the value of such issuers' portfolio securities, and is subject
to market availability. The Trust does not intend to invest in such vehicles
or funds unless, in the judgment of the Adviser, the potential benefits of the
investment justify the payment of any applicable premium or sales charge. As
a shareholder in an investment company, a Fund would bear its ratable share of
that investment company's expenses, including its advisory and administration
fees. At the same time the Fund would continue to pay its own management fees
and other expenses.
WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. Each Fund may purchase
securities on a "when-issued" basis and may purchase or sell securities on a
"forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. There is a risk that the securities may not be
delivered or that they may decline in value before the settlement date.
PRIVATE PLACEMENTS. Each Fund may acquire securities in private
placements. Because an active trading market may not exist for such
securities, the sale of such securities may be subject to delay and additional
costs. No Fund will purchase such a security if more than 15% of the value of
such Fund's net assets would be invested in illiquid securities.
10
<PAGE>
LENDING OF PORTFOLIO SECURITIES. Each Fund except Oakmark Fund may lend
its portfolio securities to broker-dealers and banks to the extent indicated
in restriction 5 under "Restrictions on the Funds' Investment." Any such loan
must be continuously secured by collateral in cash or cash equivalents
maintained on a current basis in an amount at least equal to the market value
of the securities loaned by a Fund. The Fund would continue to receive the
equivalent of the interest or dividends paid by the issuer on the securities
loaned, and would also receive an additional return that may be in the form of
a fixed fee or a percentage of the collateral. The Fund would have the right
to call the loan and obtain the securities loaned at any time on notice of not
more than five business days. In the event of bankruptcy or other default of
the borrower, the Fund could experience both delays in liquidating the loan
collateral or recovering the loaned securities and losses including (a)
possible decline in the value of the collateral or in the value of the
securities loaned during the period while the Fund seeks to enforce its rights
thereto, (b) possible subnormal levels of income and lack of access to income
during this period, and (c) expenses of enforcing its rights.
CASH RESERVES. To meet liquidity needs or for temporary defensive
purposes, each Fund may hold cash in domestic and foreign currencies and may
invest in domestic and foreign money market securities.
RISK FACTORS
GENERAL. All investments, including those in mutual funds, have risks,
and no investment is suitable for all investors. Each Fund is intended for
long-term investors. Only Balanced Fund is intended to present a balanced
investment program between growth and income.
SMALL CAP COMPANIES. During some periods, the securities of small cap
companies, as a class, have performed better than the securities of large
companies, and in some periods they have performed worse. Stocks of small cap
companies tend to be more volatile and less liquid than stocks of large
companies. Small cap companies, as compared to larger companies, may have a
shorter history of operations, may not have as great an ability to raise
additional capital, may have a less diversified product line making them
susceptible to market pressure, and may have a smaller public market for their
shares.
INTERNATIONAL INVESTING. International Fund and International Emerging
Fund provide long-term investors with an opportunity to invest a portion of
their assets in a diversified portfolio of securities of non-U.S. issuers.
Each of the other Funds may invest up to 25% (or 10% in the case of Balanced
Fund) of its assets in securities of non-U.S. issuers. International
investing allows you to achieve greater diversification and to take advantage
of changes in foreign economies and market conditions. Many foreign economies
have, from time to time, grown faster than the U.S. economy, and the returns
on investments in these countries have exceeded those of similar U.S.
investments, although there can be no assurance that these conditions will
continue.
You should understand and consider carefully the greater risks involved
in investing internationally. Investing in securities of non-U.S. issuers,
positions in which are generally denominated in foreign currencies, and
utilization of forward foreign currency exchange contracts involve both
opportunities and risks not typically associated with investing in U.S.
securities. These include: fluctuations in exchange rates of foreign
currencies; possible imposition of exchange control regulation or currency
restrictions that would prevent cash from being brought back to the United
States; less public information with respect to issuers of securities; less
governmental supervision of stock exchanges, securities brokers and issuers of
securities; different accounting, auditing and financial reporting standards;
different settlement periods and trading practices; less liquidity and
frequently greater price volatility in foreign markets than in the United
States; imposition of foreign taxes; and sometimes less advantageous legal,
operational and financial protections applicable to foreign subcustodial
arrangements.
11
<PAGE>
Although the Funds try to invest in companies and governments of
countries having stable political environments, there is the possibility of
restriction of foreign investment, expropriation of assets, or confiscatory
taxation, seizure or nationalization of foreign bank deposits or other assets,
establishment of exchange controls, the adoption of foreign government
restrictions, or other adverse political, social or diplomatic developments
that could affect investment in these nations. Economies in individual
emerging markets may differ favorably or unfavorably from the U.S. economy in
such respects as growth of gross domestic product, rates of inflation,
currency depreciation, capital reinvestment, resource self-sufficiency and
balance of payments positions. Many emerging market countries have
experienced high rates of inflation for many years, which has had and may
continue to have very negative effects on the economies and securities markets
of those countries.
The securities markets of emerging countries are substantially smaller,
less developed, less liquid and more volatile than the securities markets of
the United States and other more developed countries. Disclosure and
regulatory standards in many respects are less stringent than in the U.S. and
other major markets. There also may be a lower level of monitoring and
regulation of emerging markets and the activities of investors in such
markets, and enforcement of existing regulations has been extremely limited.
Any Fund may invest in ADRs, EDRs or GDRs that are not sponsored by the
issuer of the underlying security. To the extent it does so, the Fund would
probably bear its proportionate share of the expenses of the depository and
might have greater difficulty in receiving copies of the issuer's shareholder
communications than would be the case with a sponsored ADR, EDR or GDR.
The cost of investing in securities of non-U.S. issuers is higher than
the cost of investing in U.S. securities. International Fund and
International Emerging Fund provide an efficient way for an individual to
participate in foreign markets, but their expenses, including advisory and
custody fees, are higher than for a typical domestic equity fund.
DEBT SECURITIES. As noted above, each Fund may invest to a limited
extent in debt securities that are rated below investment grade or, if
unrated, are considered by the Fund's investment adviser to be of comparable
quality. A decline in prevailing levels of interest rates generally increases
the value of debt securities in a Fund's portfolio, while an increase in rates
usually reduces the value of those securities. As a result, to the extent
that a Fund invests in debt securities, interest rate fluctuations will affect
its net asset value, but not the income it receives from its debt securities.
In addition, if the debt securities contain call, prepayment or redemption
provisions, during a period of declining interest rates, those securities are
likely to be redeemed, and the Fund would probably be unable to replace them
with securities having as great a yield.
Investment in medium- or lower-grade debt securities involves greater
investment risk, including the possibility of issuer default or bankruptcy.
An economic downturn could severely disrupt this market and adversely affect
the value of outstanding bonds and the ability of the issuers to repay
principal and interest. In addition, lower-quality bonds are less sensitive
to interest rate changes than higher-quality instruments and generally are
more sensitive to adverse economic changes or individual corporate
developments. During a period of adverse economic changes, including a period
of rising interest rates, issuers of such bonds may experience difficulty in
servicing their principal and interest payment obligations.
Furthermore, medium- and lower-grade debt securities tend to be less
marketable than higher-quality debt securities because the market for them is
less broad. The market for unrated debt securities is even narrower. During
periods of thin trading in these markets, the spread between bid and asked
prices is likely to increase significantly, and the Fund may have greater
difficulty selling its portfolio securities. The market value of these
securities and their liquidity may be affected by adverse publicity and
investor perceptions.
12
<PAGE>
CHANGE IN OBJECTIVE. Each Fund's investment objective may be changed by
the board of trustees without shareholder approval. Shareholders would
receive at least 30 days' written notice of any change in a Fund's objective.
If there is a change in investment objective, you should consider whether the
Fund remains an appropriate investment in light of your then current financial
position and needs. There can be no assurance that any Fund will achieve its
investment objective.
RESTRICTIONS ON THE FUNDS' INVESTMENTS
No Fund will:
1. In regard to 75% of its assets, invest more than 5% of its assets
(valued at the time of investment) in securities of any one issuer, except in
U.S. government obligations;
2. Acquire securities of any one issuer which at the time of investment
(a) represent more than 10% of the voting securities of the issuer, or (b)
have a value greater than 10% of the value of the outstanding securities of
the issuer;
3. Borrow money except from banks for temporary or emergency purposes in
amounts not exceeding 10% of the value of the Fund's assets at the time of
borrowing [the Fund will not purchase additional securities when its
borrowings, less receivables from portfolio securities sold, exceed 5% of
total assets];
4. Issue any senior security except in connection with permitted
borrowings; or
5. Make loans, except that each Fund may invest in debt obligations, and
each Fund other than Oakmark Fund may invest in repurchase agreements/*/ and
lend its portfolio securities [a Fund will not lend securities having a value
in excess of 33% of its assets (valued at the time of any loan)].
These restrictions, except the bracketed portions and the footnote, are
"fundamental" and cannot be changed as to a Fund without the approval of a
"majority of the outstanding voting securities" of that Fund as defined in the
Investment Company Act of 1940. All of the Funds' investment restrictions,
including additional fundamental restrictions, are set forth in the Statement
of Additional Information.
HOW TO PURCHASE SHARES
You may purchase shares of any of the Funds by check, by wire, by
electronic transfer or by exchange. There are no sales commissions or
underwriting discounts. The minimum initial investment is $1,000 for Small
Cap and International Emerging Fund and $2,500 for the other Funds, except
that the minimum is $1,000 for (a) an investment in an Oakmark IRA account,
(b) a gift or transfer to a minor under a Uniform Gifts to Minors Act ("UGMA")
or a Uniform Transfers to Minors Act ("UTMA"), or (c) an investment through
the Automatic Investment Plan (see "Shareholder Services" below). Minimum
subsequent investments are $100, except for reinvestments of dividends and
capital gain distributions.
- --------------
/*/ A repurchase agreement involves a sale of securities to a Fund with the
concurrent agreement of the seller (bank or securities dealer) to
repurchase the securities at the same price plus an amount equal to an
agreed-upon interest rate within a specified time. In the event of a
bankruptcy or other default of a seller of a repurchase agreement, the Fund
could experience both delays in liquidating the underlying securities and
losses. No Fund may invest more than 15% of its net assets in repurchase
agreements maturing in more than seven days and other illiquid securities.
13
<PAGE>
BY CHECK. To make an initial purchase of shares, complete and sign the
Share Purchase Application and mail it to the Trust's transfer agent, State
Street Bank and Trust Company, Attention: Oakmark Funds, P.O. Box 8510,
Boston, Massachusetts 02266-8510, together with a check for the total purchase
amount payable to State Street Bank and Trust Company.
You may make subsequent investments by submitting a check along with
either the stub from your Fund account confirmation statement or a note
indicating the amount of the purchase, your account number, and the name in
which your account is registered. Each individual check submitted for
purchase must be at least $100, and the Trust will not accept cash, drafts,
third party checks, or checks drawn on banks outside of the United States. If
your order to purchase shares of a Fund is canceled because your check does
not clear, you will be responsible for any resulting loss incurred by the
Fund.
BY WIRE. You may also pay for shares by instructing your bank to wire
money to the Trust's custodian bank. Your bank may charge you a fee for
sending the wire. IF YOU ARE OPENING A NEW ACCOUNT BY WIRE TRANSFER, YOU MUST
FIRST TELEPHONE THE TRANSFER AGENT AT 1-800-626-9392 TO REQUEST AN ACCOUNT
NUMBER AND FURNISH YOUR SOCIAL SECURITY OR OTHER TAX IDENTIFICATION NUMBER.
Neither the Funds nor the Trust will be responsible for the consequences of
delays, including delays in the banking or Federal Reserve wire systems.
BY ELECTRONIC TRANSFER. If you have an established Fund account with an
established electronic transfer privilege you may make subsequent investments
by an electronic transfer of funds from your bank account. Electronic
transfer allows you to make purchases at your request by calling 1-800-626-
9392 or at pre-scheduled intervals. See "Shareholder Services." Electronic
transfer purchases are subject to a $100 minimum and a $50,000 maximum. You
may not open a new account through electronic transfer. If your order to
purchase shares of a Fund is canceled because your electronic transfer does
not clear, you will be responsible for any resulting loss incurred by the
Fund.
BY EXCHANGE. You may purchase shares of a Fund by exchange of shares
from another Fund or by exchange of Service Units of GS Short Duration Tax-
Free Fund, a portfolio of Goldman Sachs Trust, or of ILA Service Units of
Government Portfolio or Tax-Exempt Portfolio, each a portfolio of Goldman
Sachs-Institutional Liquid Assets (such Service Units and ILA Service Units
are referred to as "Oakmark Units"), either by phone (if the Telephone
Exchange Privilege has been established on the account from which the exchange
is being made) or by mail. AN EXCHANGE TRANSACTION IS A SALE AND PURCHASE OF
SHARES FOR FEDERAL INCOME TAX PURPOSES AND MAY RESULT IN CAPITAL GAIN OR LOSS.
IF YOU EXCHANGE SHARES OF SMALL CAP FUND OR INTERNATIONAL EMERGING FUND WITHIN
SIX MONTHS AFTER PURCHASE, YOU WILL BE SUBJECT TO A 2% REDEMPTION FEE PAYABLE
TO THE FUND. GENERALLY YOU MAY NOT MAKE MORE THAN SIX EXCHANGES FROM ANY FUND
IN ANY CALENDAR YEAR, AND THE TRUST MAY REFUSE REQUESTS FOR MORE FREQUENT
EXCHANGES. Restrictions apply and there is a charge (currently $5) for each
exchange into Oakmark Units; please review the information under "How to
Redeem Shares -- By Exchange."
PURCHASE PRICE AND EFFECTIVE DATE. Each purchase of a Fund's shares is
made at that Fund's net asset value (see "Net Asset Value") next determined as
follows:
A purchase BY CHECK OR WIRE TRANSFER is made at the net asset value
next determined after receipt by the Fund of the check or wire transfer
of funds in payment of the purchase.
A purchase BY ELECTRONIC TRANSFER is made at the net asset value
determined after receipt of your electronic transfer investment
instruction.
PURCHASES THROUGH DEALERS. You may purchase or redeem shares of the
Funds through certain investment dealers, banks or other institutions. Any
such purchase or redemption generally will not be effective until the order or
request is received by the Trust's transfer agent; it is the responsibility of
the dealer to transmit your order or request promptly. These institutions may
impose charges for their services. Any such charges could constitute a
substantial portion of a smaller account, and may not be in
14
<PAGE>
your best interest. You may purchase or redeem shares of the Funds directly
from or with the Trust without imposition of any charges other than those
described in this prospectus.
GENERAL. The Trust cannot accept a purchase order specifying a
particular purchase date or price per share. Each purchase order for a Fund
must be accepted by an authorized officer of the Trust or its transfer agent
and is not binding until accepted and entered on the books of that Fund. Once
your purchase order has been accepted, you may not cancel or revoke it;
however, you may redeem the shares. The Trust reserves the right not to
accept any purchase order that it determines not to be in the best interest of
the Trust or of a Fund's shareholders. The Trust will not be responsible for
any losses resulting from unauthorized transactions initiated by telephone if
it or its transfer agent follows reasonable procedures designed to verify the
identity of the caller. Those procedures may include recording the call,
requesting additional information and sending written confirmation of
telephone transactions. You should verify the accuracy of telephone
transactions immediately upon receipt of your confirmation statement.
HOW TO REDEEM SHARES
BY MAIL. You may redeem all or any part of your shares of a Fund upon
your written request delivered to the Trust's transfer agent, State Street
Bank and Trust Company, Attention: Oakmark Funds, P.O. Box 8510, Boston,
Massachusetts 02266-8510. Your redemption request must:
(1) identify the Fund and give your account number;
(2) specify the number of shares or dollar amount to be redeemed; and
(3) be signed in ink by all owners exactly as their names appear on the
account.
Your request must also INCLUDE A SIGNATURE GUARANTEE if any of the following
situations applies:
. you wish to redeem more than $50,000 worth of shares;
. your account registration has been changed within the last 30 days;
. the redemption check is to be mailed to an address different from the
one on your account (record address);
. the redemption check is to be made payable to someone other than the
registered account owner; or
. you are instructing us to wire the proceeds to a bank account and have
not signed up for the telephone redemption privilege.
You should be able to obtain a signature guarantee from a bank, securities
broker-dealer, credit union (if authorized under state law), securities
exchange or association, clearing agency or savings association, but not a
notary public. The signature guarantee must include an ink-stamped guarantee
for each signature on the redemption request and must include the name of the
guarantor bank or firm and an authorized signature.
Special rules apply to redemptions by corporations, trusts and
partnerships. In the case of a corporation, the request must be signed in the
name of the corporation by an officer whose title must be stated, and must be
accompanied by a bylaw provision or resolution of the board of directors,
certified within 60 days, authorizing the officer to so act. A redemption
request from a partnership or a trust must be signed in the name of the
partnership or trust by a general partner or a trustee and include a signature
guarantee. If the trustee is not named in the account registration, a
redemption request by a trust must also include evidence of the trustee's
appointment as such (e.g., a certified copy of the relevant portions of
15
<PAGE>
the trust instrument). Under certain circumstances, before the shares can be
redeemed, additional documents may be required in order to verify the
authority of the person seeking to redeem.
BY EXCHANGE. You may redeem all or any portion of your shares of a Fund
or of Oakmark Units and use the proceeds to purchase shares of any of the
other Funds or Oakmark Units if your signed, properly completed Application is
on file. AN EXCHANGE TRANSACTION IS A SALE AND PURCHASE OF SHARES FOR FEDERAL
INCOME TAX PURPOSES AND MAY RESULT IN CAPITAL GAIN OR LOSS. IF YOU EXCHANGE
SHARES OF SMALL CAP FUND OR INTERNATIONAL EMERGING FUND WITHIN SIX MONTHS
AFTER PURCHASE, YOU WILL BE SUBJECT TO A 2% REDEMPTION FEE PAYABLE TO THE
FUND. GENERALLY YOU MAY NOT MAKE MORE THAN SIX EXCHANGES FROM ANY FUND IN ANY
CALENDAR YEAR, AND THE TRUST MAY REFUSE REQUESTS FOR MORE FREQUENT EXCHANGES.
Before exchanging into Oakmark Units, you should obtain the prospectus
relating to the Oakmark Units from the Adviser and read it carefully. The
exchange privilege is not an offering or recommendation of Oakmark Units. The
registration of the account to which you are making an exchange must be
exactly the same as that of the account from which the exchange is made and
the amount you exchange must meet any applicable minimum investment of the
fund being purchased. An exchange may be made by following the redemption
procedure described above under "By Mail" and indicating the fund to be
purchased, except that a signature guarantee normally is not required. See
also the discussion below of the Telephone Exchange Privilege. The Trust
charges a fee (currently $5) for each exchange into Oakmark Units.
SPECIAL REDEMPTION PRIVILEGES. The Telephone Exchange and Telephone
Redemption Privileges will be established automatically when you open your
account unless you elect on your Application to decline these Privileges.
Other Privileges must be specifically elected. A signature guarantee may be
required to establish a Privilege after you have opened your account. Shares
held in an IRA account may not be redeemed by telephone. YOU MAY NOT EXCHANGE
OR REDEEM SHARES BY CALLING THE TRUST. CALL THE TRANSFER AGENT AT 1-800-626-
9392. YOUR CALL WILL BE RECORDED.
TELEPHONE EXCHANGE PRIVILEGE -- You may use the Telephone Exchange
Privilege to exchange among shares of the Funds and Oakmark Units by
calling 1-800-626-9392. An exchange request received by telephone after
4 p.m. eastern time (or after the close of regular session trading on the
New York Stock Exchange if the Exchange closes before 4 p.m.) is deemed
received on the next business day. The Trust's general redemption
policies apply to redemptions by Telephone Exchange. See "General
Redemption Policies."
The Trust reserves the right at any time without prior notice to
suspend or terminate the use of the Telephone Exchange Privilege by any
person or class of persons. The Trust believes that use of the Telephone
Exchange Privilege by investors utilizing market-timing strategies
adversely affects the Funds. THEREFORE, THE TRUST GENERALLY WILL NOT
HONOR REQUESTS FOR TELEPHONE EXCHANGES BY SHAREHOLDERS IDENTIFIED BY THE
TRUST AS "MARKET-TIMERS." Moreover, you may not make more than six
exchanges from any Fund in any calendar year. Although the Trust will
attempt to give prior notice of a suspension or termination of an
exchange privilege when it is reasonably able to do so, the suspension or
termination may be effective immediately, thereby preventing any
uncompleted exchange. See "How to Redeem Shares -- By Exchange."
During periods of volatile economic and market conditions, you may
have difficulty placing your exchange by telephone; you may wish to
consider placing your exchange by mail during such periods.
TELEPHONE REDEMPTION PRIVILEGE -- You may use the Telephone
Redemption Privilege to redeem shares having a value of up to $50,000 per
day from your account by calling 1-800-626-9392. The proceeds may be
sent by check to your registered address or you may request payment by
electronic transfer to a checking account previously designated by you at
a bank that
16
<PAGE>
is a member of the Automated Clearing House. REDEMPTIONS BY
TELEPHONE ARE SUBJECT TO A $50,000 MAXIMUM. A redemption request
received by telephone after 4 p.m. eastern time (or after the close of
regular session trading on the New York Stock Exchange if the Exchange
closes before 4 p.m.) is deemed received on the next business day. The
Telephone Redemption Privilege is not available to redeem shares held in
an IRA account, and is not available for 60 days after the Trust receives
notice from you of a change of address.
GENERAL REDEMPTION POLICIES. You may not cancel or revoke your
redemption order once your instructions have been received and accepted. The
Trust cannot accept a redemption request that specifies a particular date or
price for redemption or any special conditions. PLEASE TELEPHONE THE TRANSFER
AGENT IF YOU HAVE ANY QUESTIONS ABOUT REQUIREMENTS FOR A REDEMPTION BEFORE
SUBMITTING YOUR REQUEST. The Trust reserves the right to require a properly
completed Application before making payment for shares redeemed.
The price at which your redemption order will be executed is the net
asset value next determined after proper redemption instructions are received.
See "Net Asset Value." Because the redemption price you receive depends upon
that Fund's net asset value per share at the time of redemption, it may be
more or less than the price you originally paid for the shares and may result
in a realized capital gain or loss. In the case of Small Cap Fund or
International Emerging Fund, the Fund charges a 2% redemption fee on shares
redeemed (including by exchange) within six months after purchase (other than
by reinvestment of dividends or distributions), determined on a first-in,
first-out basis.
The Trust will generally mail payment for shares redeemed within seven
days after proper instructions are received. If you attempt to redeem shares
within 15 days after they have been purchased by check or electronic transfer,
the Trust may delay payment of the redemption proceeds to you until it can
verify that payment for the purchase of those shares has been (or will be)
collected. To reduce such delays, the Trust recommends that your purchase be
made by Federal funds wire through your bank. If you so request, the proceeds
of your redemption may be paid by wire, but the cost of the wire (currently
$5) will be deducted from the redemption proceeds.
Neither the Trust, its transfer agent, nor their respective officers,
trustees, directors, employees, or agents will be responsible for the
authenticity of instructions provided under the Special Redemption Privileges,
nor for any loss, liability, cost or expense for acting upon instructions
furnished thereunder if they reasonably believe that such instructions are
genuine. The Funds employ procedures reasonably designed to confirm that
instructions communicated by telephone under any Special Redemption Privilege
are genuine. Use of any Special Redemption Privilege authorizes the Funds and
their transfer agent to tape-record all instructions to redeem. In addition,
callers are asked to identify the account number and registration, and may be
required to provide other forms of identification. Written confirmations of
transactions are mailed promptly to the registered address; a legend on the
confirmation requests the shareholder to review the transactions and inform
the Fund immediately if there is a problem. If a Fund does not follow
reasonable procedures for protecting shareholders against loss on telephone
transactions, it may be liable for any losses due to unauthorized or
fraudulent instructions.
The Trust reserves the right at any time without prior notice to suspend,
limit, modify or terminate any privilege or its use in any manner by any
person or class. The Trust also reserves the right to redeem shares in any
account and send the proceeds to the owner if the shares in the account do
not have a value of at least $1,000. A shareholder would be notified that the
account is below the minimum and allowed 30 days to bring the account value up
to the minimum.
Shares in any account you maintain with a Fund may be redeemed to the
extent necessary to reimburse a Fund for any loss it sustains that is caused
by you (such as losses from uncollected checks and electronic transfers or any
Fund liability under the Internal Revenue Code provisions on backup
withholding relating to your account).
17
<PAGE>
SHAREHOLDER SERVICES
REPORTING TO SHAREHOLDERS. You will receive a confirmation statement
reflecting each of your purchases and redemptions of shares of a Fund, as well
as periodic statements detailing distributions made by that Fund. In
addition, the Trust will send you quarterly and annual reports showing Fund
portfolio holdings and will provide you annually with tax information.
IRA PLAN. The Trust has a master individual retirement account (IRA)
plan that allows you to invest on a tax-sheltered basis in the Funds or
Oakmark Units of the Government Portfolio of Goldman, Sachs Money Market
Trust. The plan also permits you to "roll over" or transfer to your Oakmark
IRA a lump sum distribution from a qualified pension or profit-sharing plan,
thereby postponing federal income tax on the distribution. If your employer
has a Simplified Employee Pension Plan (SEP), you may establish an IRA with
the Fund to which your employer may contribute, subject to special rules
designed to avoid discrimination.
SPECIAL WAYS TO INVEST OR REDEEM. In addition to the ways to purchase or
redeem shares described above, the New Account Purchase Application offers you
the following additional investment and redemption options:
AUTOMATIC INVESTMENTS -- purchase Fund shares each month with
payment by electronic transfer from your bank account ($1,000 minimum
initial investment; $100-50,000 per monthly transaction).
TELEPHONE INVESTMENTS -- purchase shares in an established Fund
account with an established electronic transfer privilege by placing a
telephone order and paying for them by electronic transfer from your bank
account ($100-50,000 per transaction).
AUTOMATIC EXCHANGE -- automatically exchange (monthly, quarterly or
annually) a fixed dollar amount among any of the Funds of the Trust and
Oakmark Units ($100-50,000 per transaction), subject to the applicable
minimum investment requirements.
SYSTEMATIC WITHDRAWALS -- redeem a fixed dollar amount each month or
quarter and have the proceeds sent by check to you or deposited by
electronic transfer into your bank account (up to $50,000 per
transaction).
You may establish any of these privileges by completing the Share Purchase
Application. If you have an established Fund account and want to add one of
these privileges, please call the Trust at 1-800-OAKMARK to obtain the
necessary form.
NET ASSET VALUE
The price per share for a purchase order or redemption request is the net
asset value next determined after receipt of the order.
The net asset value of a share of each Fund is determined by the Fund's
custodian, State Street Bank and Trust Company, as of the close of regular
session trading on the New York Stock Exchange (currently 4:00 p.m., Eastern
time) on any day on which that exchange is open for trading by dividing the
market value of that Fund's assets, less its liabilities, by the number of
shares outstanding. Trading in the portfolio securities of International Fund
or International Emerging Fund (and in any securities of non-U.S. issuers held
by any other Fund) takes place in various markets on days and at times other
than when the New York Stock Exchange is open for trading. Therefore, the
calculation of net asset value does not take place at the same time as the
prices of many of those portfolio securities are determined and the value of
18
<PAGE>
the Funds' portfolios may change on days when the Funds are not open for
business and their shares may not be purchased or redeemed.
Price information can be obtained by calling the 24-Hour Net Asset Value
Hotline, 1-800-GROWOAK (1-800-476-9625).
DISTRIBUTIONS
Each Fund distributes to shareholders at least annually substantially all
net investment income and any net capital gains realized from sales of the
Fund's portfolio securities. All of your income dividends and capital gain
distributions will be reinvested in additional shares unless you elect to have
distributions paid by check. If any check from a Fund mailed to you is
returned as undeliverable or is not presented for payment within six months,
the Trust reserves the right to reinvest the check proceeds and future
distributions in additional Fund shares.
TAXES
Dividends from investment income and net short-term capital gains are
taxable as ordinary income. Distributions of long-term capital gains are
taxable as long-term capital gains regardless of the length of time you have
held your Fund shares. Distributions will be taxable to you whether received
in cash or reinvested in Fund shares.
You will be advised annually as to the source of your distributions for
tax purposes. If you are not subject to income taxation, you will not be
required to pay tax on amounts distributed to you.
If you purchase shares shortly before a record date for a distribution
you will, in effect, receive a return of a portion of your investment, but the
distribution will be taxable to you even if the net asset value of your shares
is reduced below your cost. However, for federal income tax purposes your
original cost would continue as your tax basis. If you redeem shares within
six months, any loss on the sale of those shares would be long-term capital
loss to the extent of any distributions of long-term capital gain that you
have received on those shares.
Investment income received by a Fund from sources within foreign
countries may be subject to foreign income taxes withheld at the source. If a
Fund pays nonrefundable taxes to foreign governments during the year, the
taxes will reduce that Fund's dividends but will still be included in your
taxable income. However, you may be able to claim an offsetting credit or
deduction on your tax return for your share of foreign taxes paid by the Fund.
If (a) you fail to (i) furnish your properly certified social security or
other tax identification number or (ii) certify that your tax identification
number is correct or that you are not subject to backup withholding due to the
underreporting of certain income, or (b) the Internal Revenue Service informs
the Trust that your tax identification number is incorrect, the Trust may be
required to withhold Federal income tax at a rate of 31% ("backup
withholding") from certain payments (including redemption proceeds) to you.
These certifications are contained in the New Account Purchase Application
that you should complete and return when you open an account. The Fund must
promptly pay to the IRS all amounts withheld. Therefore, it is usually not
possible for the Fund to reimburse you for amounts withheld. You may claim
the amount withheld as a credit on your Federal income tax return.
This discussion of U.S. and foreign taxation applies only to U.S.
shareholders and is not intended to be a full discussion of income tax laws
and their effect. You may wish to consult your own tax adviser.
19
<PAGE>
MANAGEMENT OF THE FUNDS
The board of trustees of the Trust has overall responsibility for the
conduct of the affairs of the Funds and the Trust. The trustees serve
indefinite terms of unlimited duration. The trustees appoint their own
successors, provided that at least two-thirds of the trustees, after such
appointment, have been elected by shareholders. Shareholders may remove a
trustee, with or without cause, upon the declaration in writing or vote of
two-thirds of the Trust's outstanding shares. A trustee may be removed with
or without cause upon the written declaration of a majority of the trustees.
The Funds' investments and business affairs are managed by the Adviser,
Harris Associates L.P. The Adviser also serves as investment adviser to
individuals, trusts, retirement plans, endowments and foundations, and manages
numerous private partnerships.
The Adviser was organized in 1995 to succeed to the business of a
previous limited partnership, also named Harris Associates L.P. (the "Former
Adviser"), that, together with its predecessor, had advised and managed mutual
funds since 1970. The Adviser, a limited partnership, is managed by its
general partner, Harris Associates, Inc. ("HAI"), a wholly-owned subsidiary of
New England Investment Companies, L.P. ("NEIC"). NEIC owns all of the limited
partnership interests in the Adviser. NEIC is a publicly traded limited
partnership that owns investment management firms and that is a subsidiary of
New England Mutual Life Insurance Company ("NEML"). NEML has agreed to merge
into Metropolitan Life Insurance Company ("MLI") in a transaction that is
expected to be completed in the spring of 1996 but that is subject to various
regulatory approvals and approval by policyholders of the respective
companies. Upon completion of the merger NEIC will become a subsidiary of
MLI.
Subject to the overall authority of the board of trustees, the Adviser
furnishes continuous investment supervision and management to the Funds and
also furnishes office space, equipment and management personnel.
For its services as investment adviser the Adviser receives from each
Fund a monthly fee based on that Fund's net assets at the end of the preceding
month. The annual rates of fees as a percentage of each Fund's net assets are
as follows:
<TABLE>
<CAPTION>
FUND FEE
---------------- ---------------------------------------------------
<S> <C>
Balanced .75%
Oakmark 1% up to $2.5 billion; .95% on the next $1.25
billion; .90% on the next $1.25 billion; and .85%
on net assets in excess of $5 billion
International 1% up to $2.5 billion; .95% on the next $2.5
billion; and .90% on net assets in excess of $5
billion
Small Cap and 1.25%
International Emerging
</TABLE>
These rates of fees are higher than those paid by most mutual funds. The
advisory agreement for each Fund provides that the total annual expenses of
the Fund, exclusive of taxes, interest, extraordinary litigation expenses and
brokers' commissions and other charges relating to the purchase or sale of
securities but including fees paid to the Adviser, shall not exceed the
limits, if any, prescribed by any state in which shares of that Fund are
qualified for sale. The Adviser has agreed to reimburse each Fund for any
such expenses in excess of such limits by an offset to the monthly advisory
fee. The Trust believes that the most restrictive expense limitation of any
state is 2.5% of the first $30 million of a Fund's average net assets, 2% of
the next $70 million and 1.5% thereafter. In addition, the Adviser has
voluntarily agreed to reimburse each of Small Cap Fund, Balanced Fund and
International Emerging Fund to the extent that the Fund's annual ordinary
operating expenses exceed 2.5% of its average net assets through October 31,
1996, subject to earlier termination by the Adviser on 30 days' notice to the
Fund.
20
<PAGE>
The Trust uses "Harris Associates" in its name and "Oakmark" in the names
of the Funds by license from the Adviser and would be required to stop using
those names if Harris Associates ceased to be the Adviser. The Adviser has
the right to use the names for another enterprise, including another
investment company.
The investment objective and policies of Oakmark Fund were developed by
the Adviser and by Robert J. Sanborn, C.F.A., the Fund's portfolio manager.
Mr. Sanborn joined the Adviser as a portfolio manager and analyst in 1988.
Prior thereto, he had been a portfolio manager/analyst with The State Teachers
Retirement System of Ohio. Mr. Sanborn holds an M.B.A. in Finance from the
University of Chicago (1983) and a B.A. in Economics from Dartmouth College
(1980).
The investment objective and policies of Small Cap Fund were developed by
the Adviser and by Steven J. Reid, C.F.A., the Fund's portfolio manager. Mr.
Reid joined the Adviser as an accountant in 1980 and has been an investment
analyst since 1985. He holds a B.A. in Business from Roosevelt University
(1979).
The investment objective and policies of Balanced Fund were developed by
the Adviser and by Clyde S. McGregor, C.F.A., the Fund's portfolio manager.
Mr. McGregor joined the Adviser as an analyst in 1981 and began managing
portfolios in 1986. He holds an M.B.A. in Finance from the University of
Wisconsin - Madison (1977) and a B.A. in Economics and Religion from Oberlin
College (1974).
The investment objective and policies of International Fund were
developed by the Adviser and by David G. Herro, C.F.A., the Fund's portfolio
manager. The Fund is co-managed by Michael J. Welsh, C.P.A. Mr. Herro joined
the Adviser in 1992 as a portfolio manager and analyst. Previously, he had
been an international portfolio manager for the State of Wisconsin Investment
Board and The Principal Financial Group. Mr. Herro holds an M.A. in Economics
from the University of Wisconsin - Milwaukee (1986) and a B.S. in Business and
Economics from the University of Wisconsin - Platteville (1985). Mr. Welsh
joined the adviser as an international analyst in 1992. Previously he had
been a senior associate, valuation services, with Coopers & Lybrand. Mr.
Welsh holds an M.M. in Finance from Northwestern University (1993) and a B.S.
in Business and Accounting from the University of Kansas (1985).
The investment objective and policies of International Emerging Fund were
developed by the Adviser and by David G. Herro, the Fund's portfolio manager.
The Fund is co-managed by Adam Schor, C.F.A. Mr. Schor joined the Adviser as
an international analyst in 1993. Previously he had been an analyst with
American Family Insurance Group and the State of Wisconsin Investment Board.
Mr. Schor holds an M.S. in Finance from the University of Wisconsin - Madison
(1993) and a B.S. in Journalism and Economics from Northwestern University
(1986).
Brokerage transactions for the Funds may be executed through Harris
Associates Securities L.P., a registered broker-dealer and an affiliate of the
Adviser.
21
<PAGE>
TRUSTEES AND OFFICERS
The trustees and officers of the Trust and their principal business
activities during the past five years are:
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH TRUST
AND AGE AT DECEMBER 31, 1995 PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS/#/
- --------------------------- -------------------------------------------------
<C> <S>
VICTOR A. MORGENSTERN* President, HAI, since 1992 and Vice President
Trustee and President, 53 prior thereto
MICHAEL J. FRIDUSS Principal, MJ Friduss & Associates
Trustee, 53 (telecommunications consultants), since 1993; Vice
President--Customer Service and Information Technology,
Ameritech Corporation (telecommunications),
1992-1993; Vice President--Customer Sales and
Service, Michigan Bell Telephone Company, prior thereto
THOMAS H. HAYDEN Executive Vice President and director, Bozell
Trustee, 44 Worldwide, Inc. (advertising and public
relations), since 1992, and Senior Vice President,
prior thereto
CHRISTINE M. MAKI Vice President--Tax, Hyatt Corporation (hotel
Trustee, 35 management) since 1995; Tax Manager, Coopers &
Lybrand (independent accountants), prior thereto
ALLAN J. REICH Senior Partner and Chair of Corporate/Securities
Trustee, 47 Practice Group, D'Ancona & Pflaum (attorneys),
since 1993; Senior Partner, McDermott, Will &
Emery (attorneys), prior thereto
MARV R. ROTTER General Manager, Rotter & Associates (financial
Trustee, 49 services)
BURTON W. RUDER President, The Academy Group (investments and
Trustee, 52 consulting)
PETER S. VOSS* Chairman and Chief Executive Officer, New England
Trustee, 49 Investment Companies, Inc. and New England
Investment Companies, L.P., since 1992; Group
Executive Vice President, Bank of America, N.A.,
1992; Executive Vice President, Security Pacific
Bank, prior thereto
GARY N. WILNER, M.D. Senior Attending Physician, Evanston Hospital, and
Trustee, 55 Medical Director - CardioPulmonary Wellness
Program, Evanston Hospital Corporation
ROBERT J. SANBORN Portfolio Manager and Analyst, HALP
Executive Vice President
and Portfolio Manager
(Oakmark Fund), 37
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH TRUST
AND AGE AT DECEMBER 31, 1995 PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS/#/
- ---------------------------- -------------------------------------------------
<C> <S>
DAVID G. HERRO Portfolio Manager and Analyst, HALP, since 1992;
Vice President and Portfolio Manager - International Equities, State
Portfolio Manager of Wisconsin Investment Board, prior thereto
(International Fund and
International Emerging
Fund), 35
CLYDE S. MCGREGOR Portfolio Manager and Analyst, HALP
Vice President and
Portfolio Manager
(Balanced Fund), 43
STEVEN J. REID Portfolio Manager and Analyst, HALP
Vice President and
Portfolio Manage
(Small Cap Fund), 39
ADAM SCHOR Portfolio Manager and Analyst, HALP, since 1993;
Assistant Vice President Analyst, American Family Insurance Group,
and Co-portfolio Manager 1992-1993; Analyst, State of Wisconsin Investment
(International Emerging Board, prior thereto
Fund), 31
MICHAEL J. WELSH Portfolio Manager and Analyst, HALP, since 1992;
Assistant Vice President Senior Associate, Valuation Services, Coopers &
and Co-portfolio Manager Lybrand, prior thereto
(International Fund), 32
LAUREN B. PITALIS Director of Mutual Fund Operations, HALP, since
Vice President-Shareholder 1992; Manager of Distribution Services, Mesirow
Operations and Assistant Financial, Inc., prior thereto
Secretary, 35
ANITA M. NAGLER Vice President, HAI, since 1994; General Counsel,
Secretary, 39 HALP, since 1993; Associate Regional Administrator -
Enforcement, Securities and Exchange Commission,
prior thereto
DONALD TERAO Secretary and Treasurer, HAI, since 1995;
Treasurer, 46 Controller, HALP, prior thereto
KRISTI L. ROWSELL Tax and Accounting Manager, HALP, since 1995; Vice
Assistant Treasurer, 29 President and Treasurer, Calamos Asset Management,
Inc., 1992-1995; Senior Tax Specialist, KPMG Peat
Marwick, prior thereto
</TABLE>
- -----------------------------
# As used in this table, from and after September 29, 1995 "HALP" and "HAI"
refer to the Adviser and the general partner of the Adviser, respectively,
and prior to that date those terms refer to the Former Adviser and the
general partner of the Former Adviser, respectively.
* Messrs. Morgenstern and Voss are trustees who are "interested persons" (as
defined in the Investment Company Act) of the Trust by virtue of their
relationships with HALP.
23
<PAGE>
PERFORMANCE INFORMATION
From time to time the Funds may quote total return figures in sales
material. "Total Return" for a period is the percentage change in value
during the period of an investment in Fund shares, including the value of
shares acquired through reinvestment of all dividends and capital gains
distributions. "Average Annual Total Return" is the average annual compound
rate of change in value represented by the Total Return for the period. All
of these calculations assume the reinvestment of dividends and distributions
in additional shares of the Fund. Income taxes are not taken into account.
In advertising and sales literature, a Fund's performance may be compared
to market indexes and to the performance of other mutual funds. A Fund may
also publicize its comparative performance as computed in rankings or ratings
determined by independent services or publications including Lipper Analytical
Services, Inc., Morningstar, Inc. and others.
The performance of a Fund is a function of conditions in the securities
markets, portfolio management and operating expenses, and past results are not
necessarily indicative of future results. See "Investment Objectives" and
"Investment Restrictions." Performance information supplied by a Fund may not
provide a basis for comparison with other investments using different
reinvestment assumptions or time periods.
OTHER INFORMATION
The Funds are series of Harris Associates Investment Trust (the "Trust"),
an open-end, diversified management investment company. The Trust is a
Massachusetts business trust organized under an Agreement and Declaration of
Trust ("Declaration of Trust") dated February 1, 1991, which provides that
each shareholder shall be deemed to have agreed to be bound by the terms
thereof. The Declaration of Trust may be amended by a vote of either the
Trust's shareholders or its trustees. The Trust may issue an unlimited number
of shares, in one or more series, each with its own investment objective,
policies and restrictions, as the board of trustees may authorize. Any such
series of shares may be further divided, without shareholder approval, into
two or more classes of shares having such preferences or special or relative
rights or privileges as the trustees may determine. The Funds' shares are not
currently divided into classes. The Funds are the only series of the Trust
currently being offered. All shares issued will be fully paid and non-
assessable and will have no preemptive or conversion rights.
Each share of a series is entitled to participate pro rata in any
dividends and other distributions declared by the board of trustees with
respect to that series, and all shares of a series have equal rights in the
event of liquidation of that series.
Each share is entitled to one vote on each matter presented to
shareholders. As a business trust, the Trust is not required to hold annual
shareholder meetings. However, special meetings may be called for purposes
such as electing or removing trustees, changing fundamental policies, or
approving an investment advisory contract. On any matter submitted to a vote
of shareholders, shares are voted in the aggregate and not by individual
series except when required by the Investment Company Act of 1940 or other
applicable law, or when the board of trustees determines that the matter
affects only the interests of one or more series, in which case shareholders
of the unaffected series are not entitled to vote on such matters. All shares
of the Trust are voted together in the election of trustees.
Inquiries regarding the Funds should be directed to the Trust at its
address or telephone number shown on the inside back cover.
24
<PAGE>
INVESTMENT ADVISER
Harris Associates L.P.
ADDRESS OF TRUST AND ADVISER
Two North LaSalle Street
Chicago, Illinois 60602-3790
1-800-OAKMARK
(1-800-625-6275)
24-HOUR NAV HOTLINE
1-800-GROWOAK
(1-800-476-9625)
TRANSFER AGENT, DIVIDEND
DISBURSING AGENT & CUSTODIAN
State Street Bank and Trust Company
Attention: Oakmark Funds
P.O. Box 8510
Boston, Massachusetts 02266-8510
1-800-626-9392
AUDITORS
Arthur Andersen LLP
Chicago, Illinois
LEGAL COUNSEL
Bell, Boyd & Lloyd
Chicago, Illinois
<PAGE>
OAKMARK INTERNATIONAL EMERGING VALUE FUND
SCHEDULE OF INVESTMENTS -- FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION> Market
Shares Held Common Stocks Description Value
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS - 96.2%
CONSUMER NON-DURABLES - 3.4%
831,000 PT Ploysindo Eka Perkasa (Indonesia) Integrated Textile Manufacturer $466,350
FOOD - 4.7%
1,459,000 Grupo Herdez, SA de CV (Mexico) Manufacturer and Distributor of
Bottled and Canned Food 426,586
13,155 Soproni Sorgyar AR RT (Hungary) Hungarian Brewer 204,395
--------
630,981
HOUSEHOLD PRODUCTS - 4.3%
1,500 WMF (Germany) Tableware and Kitchenware 321,895
15,050 N.V. Koninklijke Sphinx Gustavsberg Bathroom Products
(Netherlands) 254,140
--------
576,035
OTHER CONSUMER GOODS & SERVICES - 4.7%
196,917 Fyffes (Ireland) Distributor of Fresh Fruit, Flowers
and Produce in Europe 322,155
155,000 Vardon PLC (Great Britain) Bingo Parlors 313,515
--------
635,670
PHARMACEUTICAL - 1.9%
7,600 Egis Gygogyszergyar (Hungary) Hungarian Pharmaceutical Company 258,394
TELECOMMUNICATIONS - 2.1%
9,350 Telefonos de Mexico, S.A. de C.V. Telephone Company in Mexico
(Mexico) (b) 285,175
TRANSPORTATION - 3.1%
92,250 CIADEA S.A. (Argentina) (a) Assembler and Distributor of Automobiles 415,291
OIL AND NATURAL GAS - 3.8%
6,200 Geophysique (France) Oil Services Company 338,437
9,000 YPF Sociedad Anonima (Argentina) (b) Exploration, Production and Marketing 174,375
--------
512,812
ELECTRIC - 2.4%
12,500,000 Cemig (Brazil) Electric Utility 317,323
BANKS 0.0%
8,800,000 Banco National S.A. (Brazil) (a)(d) Brazilian Bank 0
OTHER FINANCIAL - 2.5%
201,000 C.E. Heath International Holdings
Limited (Australia) Insurance and Reinsurance Broker 334,974
</TABLE>
See accompanying notes to financial statements.
<PAGE>
The Oakmark International Emerging Value Fund
Schedule of Investments - February 29, 1996 (Unaudited)
<TABLE>
<CAPTION>
Market
Shares Held Common Stocks Description Value
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMPUTER SYSTEMS - 10.4%
35,000 Nice Systems Ltd. (Israel) Voice Logging Systems 507,500
605,000 Solution 6 Holdings Limited (Australia) Design Computer Systems/Consultants 499,503
605,000 Aztech (Singapore) Design and Produce Multimedia Computing
Products 400,620
-------
1,407,623
MARKETING SERVICES 3.8%
310,000 Cordiant PLC (Great Britain) (a) Global Advertising Agency 517,775
BROADCASTING & PUBLISHING - 3.5%
25,900 Moffat Communications Limited Owner and Operator of Television Stations and
(Canada) Cable Systems 311,502
374,000 Oriental Press Group Ltd. (Hong Kong) Newspaper Publisher 165,692
-------
477,194
CHEMICALS - 3.6%
15,000 EVC International NV (Netherlands) Western European PVC manufacturer 485,634
COMPONENTS 5.7%
14,400 Tower Semiconductor Ltd. (Israel) Semiconductors 275,400
490,000 Barlo Group plc (Ireland) Manufacturer of Radiators and Industrial Plastics 262,073
125,000 Pentex Schweizer (Singapore) Manufacturer and Marketer of Printed Circuit Boards 227,514
-------
764,987
FORESTRY PRODUCTS 2.4%
34,000 Asia Pulp & Paper Company Ltd
(Indonesia)(a) Paper & Packaging Products in Asia 327,251
MACHINERY AND METAL PROCESSING - 5.4%
60,500 Steel & Tube Holdings Limited
(New Zealand) Produces and Distributes Steel 325,794
3,125 Groupe Fives Lille (France) Builder of Heavy Machinery 309,418
576,000 Iochpe-Maxion (Brazil) Manufacturer of Auto Parts and Farm Machinery 99,432
-------
734,644
MINING AND BUILDING MATERIALS - 7.4%
10,050 Asia Cement Manufacturing Co. (Korea) Cement Manufacturer in Korea 386,563
39,100 Grupo Uralita (Spain) Manufacturers of Building Products and Chemicals 375,977
529,300 Parbury Limited (Australia) Manufactures Building Products 230,641
-------
993,181
OTHER INDUSTRIAL GOODS AND SERVICES - 12.3%
161,400 Sanford Limited (New Zealand) Owns and Manages Fisheries 353,090
1,045 SwissLog Holding AG (Switzerland) Logistics Services 331,220
2,800,000 TechTronic Industries Company
Limited (Hong Kong) Manufactures Electric Hand Tools 293,368
71,000 Wattyl (Australia) Paint Company 287,669
1,450,000 Yip's Hang Cheung (Holdings)
Limited (Hong Kong) Paint Company 213,817
7,000 Fukuda Denshi Co., Ltd. (Japan) Medical Products Manufacturer and Distributor 183,168
1,662,332
</TABLE>
See accompanying notes to financial statements.
<PAGE>
The Oakmark International Emerging Value Fund
Schedule of Investments - February 29, 1996 (Unaudited)
<TABLE>
<CAPTION>
Market
Shares Held Common Stocks Description Value
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PRODUCTION EQUIPMENT - 7.3% Steel Mini-Mills Equipment 406,367
114,300 Danieli (Italy) Wool Textile Manufacturer 372,439
2,460 The NSC Group (France)
34,500 Powerscreen International PLC
(Great Britain) Manufacturer of Industrial Equipment 211,991
-------
990,797
REAL ESTATE AND CONSTRUCTION - 1.4%
2,600 Bau Holdings (Austria) Construction 164,253
22,179 Christiani & Nielsen PLC (Thailand) Structural and Civil Engineering Contractor 21,994
-------
186,247
-------
TOTAL COMMON STOCKS (Cost: $12,150,621) 12,980,670
REPURCHASE AGREEMENTS -- 6.1%
State Street Bank Repurchase Agreement, 5.5% due 2/1/96 823,000
(Collateralized by US Treasury Obligations)
TOTAL REPURCHASE AGREEMENTS (Cost: $823,000) 823,000
Total Investments--102.3% (Cost: $12,973,621) 13,803,670
Foreign Currencies--1.7% (Cost: $224,646) 224,511
Other liabilities, less other assets (c)--(4.0%) (536,404)
-------
TOTAL NET ASSETS--100% $13,491,777
===========
</TABLE>
Notes:
(a) Non-income producing security.
(b) Represents an American Depositary Receipt.
(c) Includes transaction hedges.
(d) On November 10, 1995, the Comissao de Valores Mobiliarios suspended trading
in Banco Nacional. The Central Bank of Brazil is in the process of
appraising the assets and liabilities of Banco Nacional to determine the
value, if any, of its equity. The shares are valued at zero as determined by
the pricing committee of the Board of Directors.
(e) At February 29, 1996, net unrealized appreciation of $829,914 for federal
income tax purposes consisted of $1,375,568 unrealized appreciation and
$545,654 unrealized depreciation.
See accompanying notes to financial statements.
<PAGE>
The Oakmark International Emerging Value Fund
Schedule of Investments - February 29, 1996 (Unaudited)
% of Fund
Country Net Assets
- ------------------------------------------------------
ARGENTINA 4.3%
CIADEA S.A.
YPF Sociedad Anonima
AUSTRALIA 10.0%
C.E. Heath International Holdings Limited
Wattyl
Parbury Limited
Solution 6 Holdings Limited
AUSTRIA 1.2%
Bau Holdings
BRAZIL 3.1%
Banco Nacional S.A.
Cemig
Iochpe-Maxion
CANADA 2.3%
Moffat Communications Limited
FRANCE 7.6%
Geophysique
Groupe Fives-Lille
The NSC Group
GERMANY 2.4%
WMF
GREAT BRITAIN 7.7%
Cordiant PLC
Powerscreen International PLC
Vardon PLC
HONG KONG 5.0%
Oriental Press Group Ltd.
TechTronic Industries Company Limited
Yip's Hang Cheung (Holdings) Limited
HUNGARY 3.4%
Egis Gygogyszergyar
Soproni Sorgyar AR RT
INDONESIA
Asia Pulp & Paper Company Ltd 5.9%
PT Polysindo Eka Perkasa
See accompanying notes to financial statements.
<PAGE>
The Oakmark International Emerging Value Fund
Schedule of Investments - February 29, 1996 (Unaudited)
% of Fund
Country Net Assets
- ------------------------------------------------------
IRELAND 4.3%
Barlo Group plc
Fyffes
ISRAEL 5.8%
Nice Systems Ltd.
Tower Semiconductor Ltd.
ITALY 3.0%
Danieli
JAPAN 1.4%
Fukuda Denshi Co., Ltd.
KOREA
Asia Cement Manufacturing Co. 2.9%
MEXICO 5.3%
Grupo Herdez, SA de CV
Telefonos de Mexico, S.A. de C.V.
NETHERLANDS 5.5%
EVC International NV
N.V. Koninklijke Sphinx Gustavsberg
NEW ZEALAND 5.0%
Sanford Limited
Steel & Tube Holdings Limited
SINGAPORE 4.7%
Aztech
Pentex-Schweizer
SPAIN 2.8%
Grupo Uralita
SWITZERLAND 2.5%
Swisslog Holding AG
THAILAND 0.2%
Christiani & Nielsen
See accompanying notes to financial statements.
<PAGE>
THE OAKMARK INTERNATIONAL EMERGING VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES - FEBRUARY 29, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
- ------
<S> <C> <C>
Investments, at value (cost $12,973,621) $13,803,670
Cash 700
Foreign currency, at value
(cost: $224,646) 224,511
Receivable for:
Forward foreign currency contracts 904
Securities sold 0
Fund Shares sold 266,735
Dividends and interest 62,402 330,041
------------
Other assets 58,307
------------
$14,417,229
Liabilities and Net Assets
- --------------------------
Payable for:
Securities purchased 841,480
Fund shares redeemed 5,775
Forward foreign currency contracts 3,581
Due to Adviser 12,522
Other 62,094
------------
Total liabilities 925,452
------------
Net assets applicable to Fund
shares outstanding $13,491,777
============
Fund shares outstanding 1,244,146
============
Pricing of Shares
- -----------------
Net asset value per share $10.84
============
Analysis of Net Assets
- ----------------------
Paid in capital $12,633,904
Accumulated undistributed net realized gain
on sale of investments, forward contracts
and foreign currency transactions 42,960
Net unrealized appreciation of investments 829,914
Net unrealized depreciation - other (203)
Accumulated undistributed net investment
income (loss) (14,798)
Net assets applicable to Fund shares outstanding $13,491,777
</TABLE>
See accompanying notes to financial statements.
<PAGE>
The Oakmark International Emerging Value Fund
Statement of Operations - February 29, 1996
<TABLE>
<CAPTION>
Four Months Ended
February 29, 1996
-----------------
(Unaudited)
<S> <C>
Investment Income
Dividends $41,040
Interest 12,828
Foreign taxes withheld (4,819)
-----------------
Total investment income 49,049
Expenses:
Investment advisory fee 24,303
Transfer and dividend disbursing agent fees and expenses 29,892
Custodian and accounting fees and expenses 24,587
Legal fees and expenses 3,530
Audit fees and expenses 11,074
Trustees fees and expenses 3,248
Registration and blue sky expenses 24,144
Reports to shareholders 3,676
Amortization of organization cost 480
Other 4,014
-----------------
Total expenses 128,948
Less expense offset arrangements (4,273)
Less expense reimbursement (60,828)
-----------------
Net Expenses 63,847
-----------------
Net investment income (loss) (14,798)
Net realized and unrealized gain on investments
Net realized gain on sale of investments 49,563
Net realized gain (loss) on foreign currency transactions (6,603)
Net change in unrealized appreciation (depreciation) of:
Investments and foreign currency transactions 829,914
Other foreign currency transactions (203)
-----------------
Net realized and unrealized gain on investments and
foreign currency transactions 872,671
-----------------
Net increase in net assets resulting from operations $857,873
=================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
The Oakmark International Emerging Value Fund
Statement of Changes in Net Assets - February 29, 1996
<TABLE>
<CAPTION>
Four Months Ended
February 29, 1996
-----------------
(Unaudited)
<S> <C>
From Operations:
Net investment income ($14,798)
Net realized gain on sale of investments 49,563
Net realized gain (loss) on foreign currency transactions (6,603)
Net change in unrealized appreciation (depreciation) of
investments and foreign currencies 829,914
Net change in unrealized appreciation (depreciation) of
forward foreign currency contracts 0
Net change in unrealized appreciation (depreciation) - other (203)
-----------------
Net increase in net assets from operations 857,873
Distributions to shareholders from:
Net investment income 0
Net realized short-term gain 0
Net realized long-term gain 0
-----------------
0
From Fund share transactions:
Proceeds from shares sold 13,209,712
Payments for shares redeemed, net of fees (575,808)
-----------------
Net increase in net assets from Fund share transactions 12,633,904
-----------------
Total increase in net assets 13,491,777
Net assets:
Beginning of period 0
-----------------
End of period $13,491,777
=================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
The Oakmark Balanced Fund
Schedule of Investments - February 29, 1996 (Unaudited)
Market
Principal Value Value
- ------------------------------------------------------------------------------
EQUITY & EQUIVALENTS - 53.6%
FOOD & BEVERAGE - 3.0%
8,650 H.J. Heinz Company $294,099
RETAIL - 5.6%
7,500 The Kroger Co. 278,438
260,000 Federated Department Stores, Inc. Convertible 5% 10/1/03 271,700
-------
550,138
OTHER CONSUMER GOODS & SERVICES - 14.7%
33,000 Arctco Inc. 342,375
16,800 JUNO Lighting Inc. 296,100
10,800 Promus Hotel Corporation 280,800
7,900 The Black & Decker Corporation 266,624
2,900 The Goodyear Tire & Rubber Company 137,750
2,500 Polaroid 110,000
-------
1,433,649
BANKS - 2.8%
4,800 Mellon Bank Corporation 268,200
OTHER FINANCIAL - 3.2%
6,300 First USA, Inc. 315,788
BROADCASTING & PUBLISHING - 11.1%
21,000 US West Media Group 438,375
3,700 Knight-Ridder, Inc. 256,225
11,600 Lee Enterprises, Incorporated 250,850
4,600 Cablevision Systems Corporation 132,250
-------
1,077,700
MEDICAL PRODUCTS - 2.5%
15,600 Amsco International, Inc. 243,750
AEROSPACE & DEFENSE - 3.2%
3,500 McDonnell Douglas Corporation 308,875
See accompanying notes to financial statements.
<PAGE>
The Oakmark Balanced Fund
Schedule of Investments - February 29, 1996 (Unaudited)
Market
Principal Value Value
- -------------------------------------------------------------------------------
OTHER INDUSTRIAL GOODS & SERVICES - 7.5%
20,000 U.S. Industries, Inc. 387,500
9,800 The Geon Company 262,150
2,500 Exide 76,250
-------
725,900
TOTAL EQUITY & EQUIVALENTS (Cost: $4,913,054) 5,218,099
FIXED INCOME - 34.8%
PREFERRED STOCKS - 3.1%
2,900 Tele-Communications, Inc. Preferred Jr. Cl B 6% 197,200
4,145 Everen Capital Corporation Preferred Series A 105,706
-------
302,906
CORPORATE BONDS - 6.4%
150,000 UCAR Global Enterprises Inc. Sr. Sub. Note 12% due 1/15/05 174,938
150,000 Midland Funding Corp. 11, 11.75% due 7/23/05 160,500
100,000 The Vons Companies, Inc., 9.625% 4/1/02 105,750
100,000 Coltec Industries, Inc., 9.75% due 4/1/00 103,500
190,000 Harrah's Jazz, 14.25% 11/15/01 75,050
------
619,738
U.S. TREASURY NOTES - 25.3%
1,000,000 U.S. Treasury Note, 6.0% due 10/15/99 1,013,520
600,000 U.S. Treasury Note, 6.125% due 5/31/97 605,634
600,000 U.S. Treasury Note, 5.25% due 7/31/98 597,150
250,000 U.S. Treasury Note, 5.625% due 11/30/00 248,533
-------
2,464,837
TOTAL FIXED INCOME (Cost: $3,461,461) 3,387,480
REPURCHASE AGREEMENTS - 16.3%
State Street Bank Repurchase Agreement, 5.5% due 2/1/96 1,583,000
(Collateralized by US Treasury Obligations)
TOTAL REPURCHASE AGREEMENTS (Cost: $1,583,000) 1,583,000
Total Investments - 104.7% (Cost: $9,957,516) 10,188,580
Other liabilities, less other assets - (4.7)% (458,475)
-------
See accompanying notes to financial statements.
<PAGE>
The Oakmark Balanced Fund
Schedule of Investments - February 29, 1996 (Unaudited)
Market
Principal Value Value
- -------------------------------------------------------------------------------
TOTAL NET ASSETS $9,730,105
==========
Notes:
- ------
(b) At February 29, 1996, net unrealized appreciation of $231,064 for
federal income tax purposes consisted of $394,057 unrealized
appreciation and $162,993 unrealized depreciation.
See accompanying notes to financial statements.
<PAGE>
The Oakmark Balanced Fund
Statement of Assets and Liabilities - February 29, 1996 (Unaudited)
<TABLE>
<CAPTION>
ASSETS
<S> <C> <C>
Investments, at value (cost: $9,957,516) $10,188,580
Cash 852
Receivable for:
Securities sold $ 35,000
Fund shares sold 69,733
Dividends and interest 79,706
Expense reimbursement 37,959
--------
Total receivables 222,398
Other assets 57,856
-----------
Total assets 10,469,686
LIABILITIES AND NET ASSETS
Payable for:
Securities purchased $671,300
Fund shares redeemed 12,120
Due to Adviser 11,671
Other 44,490
--------
Total liabilities 739,581
-----------
Net assets applicable to Fund shares outstanding $ 9,730,105
===========
Fund Shares Outstanding 927,425
===========
PRICING OF SHARES
Net asset value per share $ 10.49
===========
ANALYSIS OF NET ASSETS
Paid in capital $ 9,412,661
Accumulated undistributed net realized gain on sale
of investments and foreign currency transactions 47,016
Net unrealized appreciation of investments 231,064
Accumulated undistributed net investment income 39,364
-----------
Net assets applicable to Fund shares outstanding $ 9,730,105
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
The Oakmark Balanced Fund
Statement of Operations - February 29, 1996
<TABLE>
<CAPTION>
Four Months Ended
February 29, 1996
-----------------
(Unaudited)
<S> <C>
Investment Income:
Dividends $ 36,612
Interest 54,534
--------
Total investment income 91,146
--------
Expenses:
Investment advisory fee 11,671
Transfer and dividend disbursing agent fees and
expenses 16,937
Custodian and accounting fees and expenses 5,299
Legal fees and expenses 3,541
Audit fees and expenses 10,471
Trustees fees and expenses 3,243
Registration and blue sky expenses 23,119
Reports to shareholders 12,994
Insurance expense 3,781
Other--net 664
--------
Total expenses 91,720
Less expense offset arrangements (1,979)
Less expense reimbursement (37,959)
--------
Net expenses 51,782
--------
Net investment income 39,364
Net realized and unrealized gain on investments
Net realized gain on sale of investments 47,016
Net realized gain (loss) on foreign currency
transactions 0
Net change in unrealized appreciation 231,064
--------
Net realized and unrealized gain on investments 278,080
--------
Net increase in net assets resulting from operations $317,444
========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
The Oakmark Balanced Fund
Statement of Changes in Net Assets - February 29, 1996
<TABLE>
<CAPTION>
Four Months Ended
February 29, 1996
-----------------
(Unaudited)
<S> <C>
From Operations:
Net investment income $ 39,364
Net realized gain on sale of investments 47,016
Net realized gain (loss) on foreign currency
transactions 0
Net change in unrealized appreciation 231,064
----------
Net increase in net assets from operations 317,444
Distribution to shareholders from:
Net investment income 0
Net realized short-term gain 0
Net realized long term gain 0
----------
Total distributions to shareholders 0
From Fund share transactions:
Reinvestment of dividends and capital gain
distributions 0
Proceeds from shares sold 9,906,051
Payments for shares redeemed (493,390)
----------
Net increase in net assets from Fund share
transactions 9,412,661
----------
Total increase in net assets 9,730,105
Net assets:
Beginning of period 0
----------
End of period (including undistributed net invest-
ment income of $39,364) $9,730,105
==========
</TABLE>
See accompanying notes to the financial statements.
<PAGE>
The Oakmark Small-Cap Fund
Schedule of Investments - February 29, 1996 (Unaudited)
<TABLE>
<CAPTION>
Market
Value
- -------------------------------------------------------------------
<S> <C>
COMMON STOCKS - 93.5%
FOOD & BEVERAGE - 6.9%
70,000 GoodMark Foods, Inc. $1,102,500
40,000 J.M. Smucker Company 750,000
25,000 Eskimo Pie Corporation 467,187
----------
2,319,687
RETAIL - 6.1%
70,000 Carson Pirie Scott & Co. (a) 1,373,750
60,000 Cole National Corporation (a) 690,000
----------
2,063,750
OTHER CONSUMER GOODS & SERVICES - 7.2%
30,000 First Brands Corporation 802,500
50,000 Justin Industries, Inc. 562,500
30,000 JUNO Lighting Inc. 528,750
30,000 Arctco Inc. 311,250
27,000 Stimsonite Corporation 222,750
----------
2,427,750
BANKS - 14.3%
60,000 Peoples Bank of Bridgeport Conn 1,312,500
45,000 Harbor Federal Savings Bank 1,237,500
48,500 Northwest Savings Bank 1,103,375
47,000 Pocahontas Federal Savings & Loan Association 752,000
25,500 Savings Bank of Finger Lakes 404,813
----------
4,810,188
INSURANCE - 9.0%
54,200 Amerin Guaranty Corporation 1,422,750
40,000 CapMAC Holdings Inc. 970,000
40,000 Life Partners Group, Inc. 615,000
----------
3,007,750
OTHER FINANCIAL - 7.8%
75,000 ContiFinancial Corporation 1,931,250
45,000 Phoenix Duff & Phelps Corporation 691,875
----------
2,623,125
</TABLE>
See accompanying notes to financial statements.
<PAGE>
The Oakmark Small-Cap Fund
Schedule of Investments - February 29, 1996 (Unaudited)
Market
Value
- -------------------------------------------------------------------
BROADCASTING & PUBLISHING - 9.4%
80,000 Granite Broadcasting Corporation 910,000
40,000 Big Flower Press Holdings, Inc. 755,000
40,000 Jones Intercable, Inc. (a) 550,000
24,000 Lee Enterprises, Incorporated 519,000
97,200 Graff Pay-Per-View Inc. 425,250
---------
3,159,250
MANAGED CARE SERVICES - 1.5%
50,000 Healthcare Services Group, Inc. 518,750
MACHINERY AND METAL PROCESSING - 12.5%
40,000 Kysor Industrial Corporation 1,035,000
40,000 Matthews International Corporation 990,000
110,000 Sudbury, Inc. 852,500
50,000 The Carbide/Graphite Group, Inc. 706,250
50,000 Northwest Pipe Company 625,000
---------
4,208,750
OTHER INDUSTRIAL GOODS & SERVICES - 14.1%
110,000 SPX Corporation 1,691,250
53,000 Amtrol Inc. 901,000
60,000 Rexene Corporation 637,500
50,000 Griffon Corporation (a) 500,000
40,000 Barefoot Inc. 465,000
100,000 Repap Enterprises Incorporated 393,750
35,000 Dorsey Trailers, Inc. 144,375
---------
4,732,875
COMMERCIAL REAL ESTATE - 1.8%
80,000 Catellus Development Corporation (a) 610,000
DIVERSIFIED CONGLOMERATES - 2.9%
50,000 U.S. Industries, Inc. 968,750
TOTAL EQUITY (Cost: $29,291,793) 31,450,625
FIXED INCOME - 3.5%
CORPORATE BONDS - 3.5%
3,000,000 Harrah's Jazz Bonds 14.25% 11/15/2001 1,185,000
TOTAL FIXED INCOME (Cost: $1,187,640) 1,185,000
See accompanying notes to financial statements.
<PAGE>
The Oakmark Small-Cap Fund
Schedule of Investments - February 29, 1996 (Unaudited)
<TABLE>
<CAPTION>
Market
Value
- -------------------------------------------------------------------------------------------
<S> <C>
CASH EQUIVALENTS 3.4%
American Express Credit Corporation Commercial Paper, 5.43%, 3/01/96 1,000,000
State Street Bank Repurchase Agreement, 5.30% Due 03/01/1996
(Collateralized by US Treasury Obligations) 139,000
TOTAL CASH EQUIVALENTS (Cost: $1,139,000) 1,139,000
Total Investments--100.4% (Cost: $31,618,433) 33,774,625
Other liabilities, less other assets--(0.4)% (135,374)
-----------
TOTAL NET ASSETS--100% $33,639,251
===========
</TABLE>
Notes:
(a) Non-income producing security.
(b) At February 29, 1996, net unrealized appreciation of $2,156,192 for federal
income tax purposes consisted of $2,940,039 unrealized appreciation and
$783,847 unrealized depreciation.
See accompanying notes to financial statements.
<PAGE>
The Oakmark Small Cap Fund
Statement of Assets and Liabilities - February 29, 1996 (Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
Investments, at value (cost: $31,618,433) $33,774,625
Cash 683
Receivable for:
Securities sold $108,356
Fund shares sold 285,408
Dividends and interest 27,151
--------
420,915
Other Assets 58,212
-----------
34,254,435
LIABILITIES AND NET ASSETS
Payable for:
Securities purchased $474,338
Fund shares redeemed 3,697
Due to Adviser 79,573
Other 57,576
--------
Total liabilities 615,184
-----------
Net assets applicable to Fund shares outstanding $33,639,251
===========
Fund shares outstanding 3,135,323
===========
PRICING OF SHARES
Net asset value per share $10.73
===========
ANALYSIS OF NET ASSETS
Paid in capital $31,577,611
Accumulated undistributed net realized gain (loss)
on sale of investments (24,233)
Net unrealized appreciation of investments 2,156,192
Accumulated undistributed net investment
income (loss) (70,319)
-----------
Net assets applicable to Fund shares outstanding $33,639,251
===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
The Oakmark Small Cap Fund
Statement of Operations - February 29, 1996
<TABLE>
<CAPTION>
Four Months Ended
February 29, 1996
-----------------
(Unaudited)
<S> <C>
Investment Income:
Dividends $ 86,233
Interest 36,710
----------
Total investment income 122,943
----------
Expenses:
Investment advisory fee 79,573
Transfer and dividend disbursing agent fees
and expenses 46,675
Custodian and accounting fees and expenses 10,613
Legal fees and expenses 3,596
Audit fees and expenses 9,919
Trustees fees and expenses 3,302
Registration and blue sky expenses 30,634
Reports to shareholders 7,613
Amortization of organization cost 480
Other-net 4,807
----------
Total expenses 197,212
Expense offset arrangements (3,950)
----------
Net expenses 193,262
----------
Net investment income (loss) (70,319)
Net realized and unrealized gain on investments
Net realized gain (loss) on sale of investments (24,233)
Net realized gain (loss) on foreign currency
transactions 0
Net change in unrealized appreciation 2,156,192
----------
Net realized and unrealized gain on investments 2,131,959
----------
Net increase in net assets resulting from operations $2,061,640
==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
The Oakmark Small Cap Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Four Months Ended
February 29, 1996
-----------------
(Unaudited)
<S> <C>
From Operations:
Net investment income (loss) $ (70,319)
Net realized gain (loss) on sale of investments (24,233)
Net realized gain (loss) on foreign
currency transactions 0
Net change in unrealized appreciation 2,156,192
-----------
Net increase in net assets from operations 2,061,640
Distribution to shareholders from:
Net investment income 0
Net realized short-term gain 0
Net realized long-term gain 0
-----------
Total distributions to shareholders 0
From Fund share transactions:
Reinvestment of dividends and capital gain
distributions 0
Proceeds from shares sold 32,709,433
Payments for shares redeemed, net of fees (1,131,822)
-----------
Net increase in net assets from Fund share
transactions 31,577,611
-----------
Total increase in net assets 33,639,251
Net assets:
Beginning of period 0
-----------
End of period (including undistributed net
investment loss of $70,319) $33,639,251
===========
</TABLE>
See accompanying notes to the financial statements.
<PAGE>
HARRIS ASSOCIATES INVESTMENT TRUST
1. SIGNIFICANT ACCOUNTING POLICIES
The following are the significant accounting policies of The Oakmark Small Cap
Fund ("Small Cap"), The Oakmark Balanced Fund ("Balanced") and The Oakmark
International Emerging Value Fund ("International Emerging"), each a series of
the Harris Associates Investment Trust (a Massachusetts business trust).
Security valuation--
Investments are stated at current value. Securities traded on securities
exchanges and securities traded on the NASDAQ National Market are valued at the
last sales price on the day of valuation, or if lacking any reported sales that
day, at the most recent bid quotation. Over-the-counter securities not so
traded are valued at the most recent bid quotation. Money market instruments
having a maturity of 60 days or less from the date of valuation are valued on an
amortized cost basis which approximates market value. Securities for which
quotations are not readily available are valued at a fair value as determined by
the Trustees.
Foreign currency translations--
Values of investments and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars using the mean of the bid and offer
prices of such currencies at the time of valuation. Purchases and sales of
investments and dividend and interest income are converted at the prevailing
rate of exchange on the respective dates of such transactions.
The Funds do not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized gain or loss from investments.
Net realized gain on foreign currency transactions arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions, the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded on the Funds' books,
and the U.S. dollar equivalent of the amounts actually received or paid, and the
realized gains or losses resulting from the portfolio and transaction hedges.
At February 29, 1996, only the International Emerging Fund had foreign currency
transactions. Net unrealized appreciation--other includes the following
components:
<TABLE>
<CAPTION>
<S> <C>
International
Emerging
-------------
Unrealized appreciation on open securities purchases $ 2,479
Unrealized depreciation on transaction hedge purchases (2,677)
Unrealized depreciation on dividends and dividend
reclaim receivable (6)
Other--net 1
-------
$ (203)
=======
</TABLE>
Security transactions and investment income--
Security transactions are accounted for on the trade date (date the order to
buy or sell is executed) and dividend income is recorded on the ex-dividend
date. Interest income and expenses are recorded on the accrual basis.
Fund shares are sold and redeemed on a continuing basis at net asset value.
Net asset value per share is determined daily as of the closing of regular
trading on the New York Stock Exchange on each day the Exchange is open for
trading by dividing the total value of the Fund's investments and other assets,
less liabilities, by the number of Fund shares outstanding.
Forward foreign currency contracts--
At February 29, 1996, the International Emerging Fund had entered into forward
foreign currency contracts under which it is obligated to exchange currencies at
specified future dates. The Funds' currency transactions are limited to
transaction hedging and portfolio hedging involving either specific transactions
or portfolio positions.
The contractual amounts of forward foreign exchange contracts do not necessarily
represent the amounts potentially subject to risk. The measurement of the risks
associated with these instruments is meaningful only when all related and
offsetting transactions are considered. Risks arise from the possible inability
of counterparties to meet the terms of their contracts and from movements in
currency values. The International Emerging Fund had the following outstanding
contracts at February 29, 1996:
<PAGE>
Transaction Hedges on Purchases of Securities:
<TABLE>
<CAPTION>
Unrealized Appreciation
(Depreciation) at
US Dollar Foreign Currency Proceeds Settlement Date February 29, 1996
- --------- ------------------------------- --------------- ------------------------
<C> <S> <C> <C>
$148,902 195,563 Australian Dollars March, 1996 $ 599
154,502 770,013 French Francs March, 1996 (1,894)
92,244 59,867 Pounds Sterling March, 1996 (507)
102,932 239,148,800 Indonesian Rupiah March, 1996 305
112,782 70,946 Irish Pounds March, 1996 (1,180)
-------
$(2,677)
</TABLE>
Federal income taxes, dividends and distributions to shareholders --
No provision is made for Federal income taxes since the Fund elects to be
taxed as a "regulated investment company" and make such distributions to its
shareholders as to be relieved of all Federal income taxes under provisions of
current Federal tax law.
2. TRANSACTIONS WITH AFFILIATES
Each fund has an investment advisory agreement with Harris Associates
L.P. (Adviser). For management services and facilities furnished, the Funds pay
the Advisor monthly fees at the annual rate of 1.25% of net assets for Small
Cap, .75% of net assets for Balanced, and 1.25% of net assets for International
Emerging as determined at the end of each preceding calendar month. The
investment advisory agreements of the Funds provide that the Adviser will
reimburse the Funds to the extent that annual expenses, excluding certain
expenses, exceed the applicable limits prescribed by any state in which the
Fund's shares are offered for sale. For the four months ended February 29, 1996
the Advisor has waived $37,959 of expenses for Balanced and $60,828 for
International Emerging.
In connection with the organization of the Funds, expenses of
approximately $7,283 were advanced to each fund by the Adviser. These expenses
are being amortized on a straight line basis through October, 2000.
Registration expenses of approximately $56,751, $56,811 and $56,726 were
advanced to Small Cap, Balanced and International Emerging, respectively, by the
Advisor. These expenses are being amortized on a straight line basis through
October, 1996.
During the four months ended February 29, 1996, the Funds incurred
brokerage commissions of $48,929, $8,837 and $61,774 of which $26,285, $7,838,
and $2,402 were paid by Small Cap, Balanced and International Emerging,
respectively, to an affiliate of the Adviser.
3. FUND SHARE TRANSACTIONS
Proceeds and payments on Fund shares as shown in the statement of changes
in net assets are in respect of the following number of shares (in thousands):
<TABLE>
<CAPTION>
International
Small Cap Balanced Emerging
---------- --------- --------------
<S> <C> <C> <C>
Shares sold 3,248 975 1298
Less shares redeemed (113) (48) (54)
----- --- -----
Net increase in shares outstanding 3,135 927 1,244
===== === =====
</TABLE>
4. INVESTMENT TRANSACTIONS
Investment securities (excluding short term securities) in thousands:
<TABLE>
<CAPTION>
Small Cap Balanced Emerging
--------- -------- --------
<S> <C> <C> <C>
Purchases $33,847 $8,529 $13,319
Proceeds from sales 3,344 200 1,218
======= ====== =======
</TABLE>
<PAGE>
PART C OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
(a) Financial statements:
---------------------
(1) Financial Statements included in Parts A and B of this
amendment:
None.
(2) Financial Statements included in Part C of this amendment:
(i) The Oakmark Small Cap Fund:
- Statement of Assets and Liabilities - February 29, 1996
- Statement of Operations - four months ended February 29,
1996
- Statement of Changes in Net Assets - four months ended
February 29, 1996
(ii) The Oakmark Balanced Fund:
- Statement of Assets and Liabilities - February 29, 1996
- Statement of Operations - four months ended February 29,
1996
- Statement of Changes in Net Assets - four months ended
February 29, 1996
(iii) The Oakmark International Emerging Value Fund:
- Statement of Assets and Liabilities - February 29, 1996
- Statement of Operations - four months ended February 29,
1996
- Statement of Changes in Net Assets - four months ended
February 29, 1996
(iv) Notes to financial statements
C-1
<PAGE>
(b) Exhibits:
--------
Note: As used herein, "Registration Statement" refers to this registration
statement under the Securities Act of 1933, no. 33-38953. "Pre-effective
Amendment" refers to a pre-effective amendment to the Registration
Statement, and "Post-effective Amendment" refers to a post-effective
amendment to the Registration Statement.
1 Agreement and declaration of trust (exhibit 1 to the Registration
Statement*)
2 Bylaws as amended through September 21, 1993 (exhibit 2 to Post-
effective Amendment no. 5*)
3 None
4 The registrant no longer issues share certificates. The form of
share certificate formerly used for the series designated The
Oakmark Fund was filed as Exhibit 4 to Pre-effective Amendment no. 2.*
5.1(a) Investment advisory agreement for The Oakmark Fund dated September
30, 1995 (exhibit 5.1 to Post-effective Amendment no. 10*)
5.1(b) Form of investment advisory agreement for The Oakmark Fund dated
___________, 1996 (exhibit 5.1(b) to Post-effective Amendment no. 11*)
5.2(a) Investment advisory agreement for The Oakmark International Fund dated
September 30, 1995 (exhibit 5.2 to Post-effective Amendment no. 10*)
5.2(b) Form of investment advisory agreement for The Oakmark International Fund
dated ___________, 1996 (exhibit 5.2(b) to Post-effective Amendment
no. 11*)
5.3(a) Investment advisory agreement for The Oakmark Small Cap Fund dated
September 30, 1995 (exhibit 5.3 to Post-effective Amendment no. 10*)
5.3(b) Form of investment advisory agreement for The Oakmark Small Cap Fund
dated ___________, 1996 (exhibit 5.3(b) to Post-effective Amendment
no. 11*)
5.4(a) Investment advisory agreement for The Oakmark Balanced Fund dated
September 30, 1995 (exhibit 5.4 to Post-effective Amendment no. 10*)
5.4(b) Form of investment advisory agreement for The Oakmark Balanced Fund
dated ___________, 1996 (exhibit 5.4(b) to Post-effective Amendment
no. 11*)
C-2
<PAGE>
5.5(a) Investment advisory agreement for The Oakmark International Emerging
Value Fund dated September 30, 1995 (exhibit 5.5 to Post-effective
Amendment no. 10*)
5.5(b) Form of investment advisory agreement for The Oakmark International
Emerging Value Fund dated ___________, 1996 (exhibit 5.5(b) to Post-
effective Amendment no. 11*)
6 None
7 None
8.1 Custody agreement with State Street Bank and Trust Company dated
July 10, 1991 (exhibit 8 to Pre-effective Amendment no. 2*)
8.2 Special custody account agreement (short sales) dated September 24,
1991 (exhibit 8.1 to Pre-effective Amendment no. 1*)
8.3 Form of letter agreement applying custody agreement (exhibit 8.1) to
The Oakmark International Fund (exhibit 8.2 to Post-effective
Amendment no. 2*)
8.4 Form of letter agreement applying custody agreement (exhibit 8.1)
and transfer agency agreement to The Oakmark Small Cap Fund, The
Oakmark Balanced Fund and The Oakmark International Emerging Value
Fund (exhibit 8.4 to Post-effective Amendment no. 10*)
9 None
10.1 Opinion of Ropes & Gray dated July 11, 1991 - The Oakmark Fund
(exhibit 10 to Pre-effective Amendment no. 2*)
10.2 Opinion of Bell, Boyd & Lloyd dated July 23, 1992 - The Oakmark
International Fund (exhibit 10.1 to Post-effective Amendment no. 2*)
10.3 Opinion of Ropes & Gray dated September 20, 1995 - The Oakmark
International Fund, The Oakmark Small Cap Fund, The Oakmark Balanced
Fund and The Oakmark International Emerging Value Fund (exhibit 10.3
to Post-effective Amendment no. 10*)
10.4 Opinion of Bell, Boyd & Lloyd dated September 20, 1995 - The Oakmark
Small Cap Fund, The Oakmark Balanced Fund and The Oakmark
International Emerging Value Fund (exhibit 10.4 to Post-effective
Amendment no. 10*)
11 Consent of independent public accountants
12 None
13.1 Organizational expense agreement for The Oakmark Fund dated July 31,
1991 (exhibit 13.2 to Post-effective Amendment no. 5*)
C-3
<PAGE>
13.2 Organizational expense agreement for The Oakmark International Fund
dated September 15, 1992 (exhibit 13.3 to Post-effective Amendment
no. 5*)
13.3 Organizational expense agreement for The Oakmark Small Cap Fund, The
Oakmark Balanced Fund and The Oakmark International Emerging Value
Fund dated July 6, 1995 (exhibit 13.3 to Post-effective Amendment
no. 10*)
13.4 Form of subscription agreement (exhibit 13.1 to Registration
Statement*)
14.1 The Oakmark Funds IRA Plan booklet, revised September 30, 1995
(exhibit 14.1 to Post-effective Amendment no. 10*)
14.2 Form of IRA application and adoption agreement, revised September
30, 1995 (exhibit 14.2 to Post-effective Amendment no. 10*)
15 None
16 Schedule for computation of performance quotations (exhibit 16 to
Post-effective Amendment no. 4*)
17 Financial data schedule (exhibit 17 to Post-effective Amendment no. 13*)
18.1 Form of new account purchase application, revised September 30, 1995
(exhibit 18.1 to Post-effective Amendment no. 10*)
18.2 Shareholder services form, revised September 30, 1995 (exhibit 18.2
to Post-effective Amendment no. 10*)
____________________
* Incorporated by reference
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
-------------------------------------------------------------
The registrant does not consider that there are any persons directly
or indirectly controlling, controlled by, or under common control with, the
registrant within the meaning of this item. The information in the prospectus
under the caption "Management of the Fund" and in the Statement of Additional
Information under the caption "Investment Adviser" and "Trustees and Officers"
is incorporated by reference.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
-------------------------------
As of February 27, 1996, the respective series of the Trust had the
following numbers of shareholders of record: The Oakmark Fund, 167,277; The
Oakmark Small Cap Fund, 3,340; The Oakmark Balanced Fund, 748; The Oakmark
International Fund, 48,885; The Oakmark International Emerging Value Fund,
1,226.
C-4
<PAGE>
ITEM 27. INDEMNIFICATION
----------------
Article VIII of the agreement and declaration of trust of registrant
(exhibit 1 to this registration statement, which is incorporated herein by
reference) provides that registrant shall provide certain indemnification
of its trustees and officers. In accordance with Section 17(h) of the
Investment Company Act, that provision shall not protect any person against
any liability to the registrant or its shareholders to which he would
otherwise be subject by reason of willful misfeasance, bad faith,
negligence or reckless disregard of the duties involved in the conduct of
his office.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a trustee,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such trustee, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The registrant, its trustees and officers, Harris Associates L.P.
("HALP") (the investment adviser to registrant) and certain affiliated
persons of HALP and affiliated persons of such persons are insured under a
policy of insurance maintained by registrant and HALP, within the limits
and subject to the limitations of the policy, against certain expenses in
connection with the defense of actions, suits or proceedings, and certain
liabilities that might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been
such trustees, directors or officers. The policy expressly excludes
coverage for any trustee or officer whose personal dishonesty, fraudulent
breach of trust, lack of good faith, or intention to deceive or defraud has
been finally adjudicated or may be established or who willfully fails to
act prudently.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
----------------------------------------------------
The information in the prospectus under the caption "Management of the
Funds" is incorporated by reference. Neither the Adviser nor its general
partner has at any time during the past two years been engaged in any other
business, profession, vocation or employment of a substantial nature either
for its own account or in the capacity of director, officer, employee,
partner or trustee, except that the Adviser is a registered commodity
trading adviser and commodity pool operator and its general partner is also
the general partner of a securities broker-dealer firm.
ITEM 29. PRINCIPAL UNDERWRITERS
----------------------
Not applicable
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
--------------------------------
Mr. Victor A. Morgenstern
Harris Associates L.P., Suite 500
Two North La Salle Street
Chicago, Illinois 60602
C-5
<PAGE>
ITEM 31. MANAGEMENT SERVICES
-------------------
None
ITEM 32. UNDERTAKINGS
------------
(a) Not applicable
(b) Not applicable
(c) Registrant undertakes to furnish to each person to whom a
prospectus is delivered a copy of the latest annual report(s) to
shareholders of Registrant.
(d) Registrant undertakes, if required to do so by the holders of at
least 10% of the Registrant's outstanding shares, to call a
meeting of shareholders for the purpose of voting upon the
question of removal of a director or directors and to assist in
communications with other shareholders as required by Section
16(c) of the Investment Company Act of 1940.
C-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant certifies that it meets all of
the requirements for effectiveness of this registration statement pursuant to
rule 485(b) under the Securities Act of 1933 and has duly caused this amendment
to its registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Chicago, Illinois on March 29, 1996.
HARRIS ASSOCIATES INVESTMENT TRUST
By /s/ VICTOR A. MORGENSTERN
-----------------------------------------
Victor A. Morgenstern, President
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
Name Title Date
---- ----- ----
Trustee )
__________________________ )
Christine M. Maki )
)
)
/s/ MICHAEL J. FRIDUSS Trustee )
__________________________ )
Michael J. Friduss )
)
)
/s/ THOMAS H. HAYDEN Trustee )
__________________________ )
Thomas H. Hayden )
)
)
/s/ VICTOR A. MORGENSTERN Trustee and President )
__________________________ (chief executive officer) )
Victor A. Morgenstern )
)
)
/s/ ALLAN J. REICH Trustee )
__________________________ )
Allan J. Reich )
) March 29, 1996
)
/s/ BURTON W. RUDER Trustee )
__________________________ )
Burton W. Ruder )
)
)
/s/ PETER S. VOSS Trustee )
__________________________ )
Peter S. Voss )
)
)
/s/ GARY WILNER Trustee )
__________________________ )
Gary Wilner )
)
)
/s/ DONALD TERAO Treasurer (principal )
__________________________ accounting officer )
Donald Terao )
)
/s/ MARV P. ROTTES Trustee )
__________________________ )
Marv P. Rottes )
<PAGE>
EXHIBIT INDEX
-------------
Sequential
Exhibit Page
------- ----------
11 Consent of independent public accountants
<PAGE>
Letterhead
Exhibit 11
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated December 5, 1995, and to all references to our firm included in or made
part of this Registration Statement on Form N-1A of the Harris Associates
Investment Trust (comprising the Oakmark Fund and the Oakmark International
Fund).
/s/ Arthur Andersen LLP
Chicago, Illinois,
March 28, 1996
