The Oakmark Equity & Income Fund has a simple but important objective: to preserve and grow its shareholders’ capital over time. In order to both preserve and grow capital, the Fund seeks to mitigate risk by finding the right balance between its equity and fixed income allocations. But finding this balance isn’t based on inflexible guidelines. Rather, the Fund’s managers strive to achieve balance by employing Harris Associates’ firm-wide value philosophy and active, bottom-up approach to investing.
Harris Associates’ value philosophy and approach is focused on finding significantly underpriced companies with strong business fundamentals and proven, shareholder-oriented management teams. For the Equity & Income Fund, allocations between equities and fixed income are a fallout of where its managers are finding what they view as the best value opportunities based on these principles. “Every issue, whether bond or stock, fights for its share of the portfolio every day,” indicates Clyde McGregor, Fund manager since 1995. The Fund’s allocation policy – equities can range from 40% to 75% of the Fund, while fixed income and cash can vary between 25% and 60% – provides its managers with the flexibility needed to make these bottom-up investment decisions.
