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Equities

International equities: Mid-year positioning and update

August 07, 2026 - 3 min

Here's the micro on banks. The logical question you might have is, why is BNP your largest position? It's a bank. I thought banks were expensive. Very logical question on this chart, it's the why behind that, and the why is price. BNP has a terrific track record. They were one of the few that did not blow themselves up. They manage risk very well, strong capital base, and yet it trades at a pretty significant discount to the overall banks. You can see here below book value relative to the average bank pushing 1 and 1/2 times. So they're still, in our opinion, room for the value and the price to converge here such that BNP's a very attractive holding.

In this mid-year update, David Herro and Tony Coniaris discuss the market dynamics shaping international equities, including the growing concentration of returns in a narrow group of technology-related companies and the opportunities that can emerge when investor attention becomes increasingly focused on a handful of market leaders. They also share how the team is identifying value opportunities across global markets and positioning portfolios for long-term investors.

The discussion highlights portfolio positioning, valuation trends, and the team's belief that today's market environment is creating attractive opportunities among high-quality businesses that have been overlooked as capital has flowed into a small number of momentum-driven areas of the market.

Key takeaways

  • How market concentration and investor momentum have driven international equity performance in 2026. 
  • Why the team sees opportunity in high-quality businesses that have been derated despite stable fundamentals. 
  • Portfolio positioning across financials, technology, energy, and other areas of the market. 
  • The relationship between valuation, earnings growth, and long-term return potential. 
  • How periods of market dispersion have historically created opportunities for disciplined value investors. 
  • Perspectives on the outlook for international equities and the catalysts the team believes could drive future performance.

Read important disclosures

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The information, data, analyses, and opinions presented herein (including current investment themes, the portfolio managers’ research and investment process, and portfolio characteristics) are for informational purposes only and represent the investments and views of the author and Harris Associates L.P. as of July 2026 and are subject to change without notice. This content is not a recommendation of or an offer to buy or sell a security and is not warranted to be correct, complete or accurate.

Investing involves risk, including the risk of loss. Investment risk exists with equity, fixed income, and alternative investments. There is no assurance that any investment will meet its performance objectives or that losses will be avoided.

Equity securities are volatile and can decline significantly in response to broad market and economic conditions.

Investing in value stocks presents the risk that value stocks may fall out of favor with investors and underperform growth stocks during given periods.

The price-to-earnings (P/E) ratio compares a company's current share price to its per-share earnings. It may also be known as the "price multiple" or "earnings multiple," and gives a general indication of how expensive or cheap a stock is. Investors should not base investment decisions on any single attribute or characteristic data point.

Portfolio holdings are subject to change without notice and are not intended as recommendations of individual stocks.

Before investing in any Oakmark Fund, you should carefully consider the Fund's investment objectives, risks, management fees and other expenses. This and other important information is contained in a Fund's prospectus and summary prospectus. Please read the prospectus and summary prospectus carefully before investing. For more information, please visit oakmark.com or call 1-800-OAKMARK (1-800-625-6275).

The Oakmark Funds are distributed by Harris Associates Securities L.P., member FINRA.

Harris Associates L.P. is the Fund’s investment adviser. The Oakmark ETFs are distributed by Foreside Fund Services, LLC. Harris Associates L.P. and Harris Associates Securities L.P. are not affiliated with Foreside Fund Services, LLC. 

Natixis Distribution, LLC (member FINRA | SIPC), is a marketing agent for the Oakmark Funds and Oakmark ETF.

The Russell Top 500 Index is a subset of the Russell 3000 Index that tracks the 500 largest US companies, designed to measure large-cap performance. You cannot invest directly in an index.

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