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Emerging Markets Fund

Diversified exposure to emerging markets, capturing value and growth

NAV (as of 15 Dec 2017)

$13.96, 0.00

YTD

+34.49%

INCEPTION

30 Mar 2007

TICKER/CUSIP

CEMVX/149498206

Fact Sheet Prospectus

Fund Profile

The Fund normally invests at least 80% of its total assets in equity securities of companies located in emerging (less developed) markets and other investments that are tied economically to emerging markets. Generally these investments include common stock, preferred and preference stock, American Depositary Receipts, European Depositary Receipts, Global Depositary Receipts, and exchange-traded funds (“ETFs”) that invest in emerging markets securities.

The Investment Adviser uses a quantitative investment approach to purchase and sell investments for the Fund. The Investment Adviser’s proprietary computer model analyzes a variety of factors to assist in selecting securities. The model currently analyzes factors relating to valuation, earnings growth, technical indicators, macroeconomics, currency, countries and sectors.

Minimum Investment$5,000
Sales ChargeNone
Net Expense Ratio1.43%
Dividend FrequencyAnnual
Capital Gain FrequencyAnnual
Benchmark MSCI Emerging Markets

Performance

Fund Quarter to Date Year to Date 1 Year3 Year5 Year10 Year Since Inception
CEMVX 3.5%34.5%34.6%5.3%5.3%2.0%5.1%
MSCI Emerging Markets 3.7%32.9%33.3%6.5%5.0%1.7%4.6%
Fund Quarter to Date Year to Date 1 Year3 Year5 Year10 Year Since Inception
CEMVX 8.9%30.0%24.7%4.5%5.3%2.2%4.9%
MSCI Emerging Markets 8.0%28.1%22.9%5.3%4.4%1.7%4.3%

Portfolio

Asset Allocation as of 30 Nov 2017

Stocks 97.4%
Cash 2.6%

Characteristics as of 30 Nov 2017

Causeway MSCI Emerging Markets
No. of Holdings 143 837
Wtd. Avg. Market Cap (Mn $US)$65,395$57,498
NTM Price/Earnings9.712.3
Price/Book Value1.51.8
NTM EPS Revision (Wtd. Avg)17.913.7

A "Weighted Average” measures a characteristic by the market capitalization of each stock. Price/Book Ratio is the weighted average of the price/book ratios of all the stocks in a portfolio. The P/B ratio of a company is calculated by dividing the market price of its stock by the company’s per-share book value. The Price/Earnings Ratio is the weighted average of the price/earnings ratios of the stocks in a portfolio. “Earnings-per-Share” is the portion of a company’s profit allocated to each outstanding share of common stock. “Earnings-per-Share year-over-year estimate growth (Next 12 Months)” is the average next-twelve-month earnings-per-share estimate from one year ago for an individual company compared with that estimate today; note that this calculation is done on a company by company basis and is aggregated through a weighted average based on the individual company’s weight in the corresponding index. Also note that this characteristic is supplied directly by MSCI.

SECTOR WEIGHTS as of 30 Nov 2017

Information Technology32.32%
Financials22.87%
Energy8.09%
Industrials7.61%
Materials6.40%
Consumer Discretionary6.24%
Telecommunication Services4.24%
Consumer Staples2.77%
Utilities2.55%
Real Estate2.54%
Health Care1.53%
Equity Funds0.21%

(VS. Benchmark)

Information Technology28.32%
Financials23.21%
Energy6.75%
Industrials5.27%
Materials7.18%
Consumer Discretionary10.51%
Telecommunication Services4.86%
Consumer Staples6.34%
Utilities2.46%
Real Estate2.72%
Health Care2.39%
Equity Funds0.00%
Information Technology
Financials
Energy
Industrials
Materials
Consumer Discretionary
Telecommunication Services
Consumer Staples
Utilities
Real Estate
Health Care
Equity Funds
Other

TOP 10 COUNTRIES as of 30 Nov 2017

China33.49%
South Korea16.78%
Taiwan10.65%
India9.48%
Brazil6.00%
Russia5.09%
Thailand4.46%
South Africa2.35%
Turkey2.28%
Malaysia2.14%
Poland1.23%
Indonesia0.95%
United Arab Emirates0.87%
Mexico0.78%
Czech Republic0.30%
Hungary0.29%
Multi-National Emerging (ETF)0.21%
Qatar0.03%
Multi-National Emerging (ETF)0.02%
Chile0.00%
Colombia0.00%
Pakistan0.00%
Philippines0.00%
Peru0.00%
Egypt0.00%
Greece0.00%

(VS. Benchmark)

China30.10%
South Korea15.63%
Taiwan11.42%
India8.64%
Brazil6.87%
Russia3.37%
Thailand2.24%
South Africa6.85%
Turkey0.98%
Malaysia2.15%
Poland1.29%
Indonesia2.18%
United Arab Emirates0.66%
Mexico3.07%
Czech Republic0.18%
Hungary0.33%
Multi-National Emerging (ETF)0.00%
Qatar0.51%
Multi-National Emerging (ETF)0.00%
Chile1.13%
Colombia0.40%
Pakistan0.09%
Philippines1.10%
Peru0.39%
Egypt0.12%
Greece0.30%
China
South Korea
Taiwan
India
Brazil
Russia
Thailand
South Africa
Turkey
Malaysia
Poland
Indonesia
United Arab Emirates
Mexico
Czech Republic
Hungary
Multi-National Emerging (ETF)
Qatar
Multi-National Emerging (ETF)
Chile
Colombia
Pakistan
Philippines
Peru
Egypt
Greece
Other

TOP 10 ACTIVE HOLDINGS as of 30 Nov 2017

Security Country Industry Active Weight*
Sberbank Russia OJSC Russia Banks 2.0
PTT Public Co., Ltd. Thailand Energy 2.0
China Construction Bank Corp. China Banks 1.9
Tencent Holdings Ltd. China Software & Services 1.6
SK hynix, Inc. South Korea Semiconductors & Semi Equipment 1.6
Investimentos Itau Brazil Banks 1.4
China Petroleum & Chemical Corp. China Energy 1.3
Hon Hai Precision Industry Co., Ltd. Taiwan Technology Hardware & Equipment 1.2
Ping An Insurance (Group) Co. of China Ltd. China Insurance 1.1
Lukoil Russia Energy 1.0

*Active defined as Fund weight minus MSCI EM Index weight. Holdings are subject to change.

Approach

We believe the best way to exploit the investment opportunities in emerging markets equities is through a combination of value and growth, and bottom-up and top-down factors. For Causeway Emerging Markets Fund, our quantitative stock selection process is focused on attractively valued companies with superior earnings prospects and positive market sentiment; these companies should produce consistent returns across investment cycles. We use the same approach to select sectors and countries, comparing valuation against earnings growth and market sentiment. At the country level, we also consider the health of the macro-economy. Our quantitative process seeks to combine these factors while attempting to avoid undue sources of risk, which is defined as tracking error (a measurement of dispersion from a benchmark index).

The investment process begins with a liquidity screen on emerging markets equities. Our model creates a return forecast for every stock in the investable universe. We optimize the portfolio weights to maximize portfolio return potential, targeting a 5% tracking error relative to the benchmark MSCI Emerging Markets Index, and subject to additional relative constraints (sector, country, and stock).

Causeway Emerging Markets Fund is a fully invested portfolio of typically 110-150 stocks, with an average 85% annual turnover. Typically, the Fund is undervalued relative to the benchmark on a number of metrics, with greater earnings growth expectations.

Commentary

PERFORMANCE REVIEW for the month ended 30 Nov 2017


Emerging markets equities slowed their pace of appreciation in November to post slightly positive returns. The EMEA (emerging Europe, Middle East, and Africa) region, led by South Africa, appreciated the most. The emerging Asia region modestly advanced and the Latin America region declined. The consumer discretionary and health care sectors were the top performers. The real estate and utilities sectors were the weakest performers.

The performance of Causeway Emerging Markets Fund (“Fund”) was flat for the month of November, underperforming the MSCI Emerging Markets Index (“Index”). We use both bottom-up and top-down factors to forecast alpha (return in excess of the Index) for the stocks in the Fund’s investable universe. Our bottom-up value factors were weak in November. Our bottom-up technical (price momentum) and earnings growth factors fared better, delivering positive returns for the period. Our top-down country, macroeconomic, and sector factors were negative performers in November. Our top-down currency factor was a positive performance indicator for the period.

Fund exposures in the consumer discretionary, materials, and consumer staples sectors were the top detractors from performance versus the Index. Fund exposures to the financials, utilities, and telecommunication sectors contributed. The Fund’s positioning in emerging Asia was the top regional detractor from relative performance, primarily due to stock selection. The Fund’s underweight position in the EMEA region also detracted. An underweight position in the Latin America region contributed to relative performance. The largest stock level detractor from relative return versus the Index was an underweight position in electronic media firm Naspers (South Africa), which holds a one-third stake in Chinese internet stock, Tencent Holdings. Other significant detractors included overweight positions in electronics contract manufacturer, Hon Hai Precision Industry Co., Ltd. (Taiwan), and diversified natural resources company, Vedanta Limited (India). The greatest stock-level contributors to return were overweight positions in financial services firm, Sberbank Russia OJSC (Russia), electronics components manufacturer, Compeq Manufacturing Co. Ltd. (Taiwan), and financial services firm, Ping An Insurance (Group) Company of China, Ltd. (China).

The market commentary expresses the portfolio managers’ views as of the date of this report and should not be relied on as research or investment advice regarding any stock. These views and the Fund holdings and characteristics are subject to change. There is no guarantee that any forecasts made will come to pass. Any securities identified and described in this report do not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the securities identified was or will be profitable. Diversification does not protect against market loss.

Dividends

2016$0.1353
2015$0.1434
2014$0.2425
2013$0.1100
2012$0.2768
2011$0.0972
2010$0.2560
2009$0.2866
2008$0.1506
2007$0.2097
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Short-term Capital Gains

2016$0.0000
2015$0.0000
2014$0.0000
2013$0.0000
2012$0.0000
2011$0.0000
2010$0.0000
2009$0.0000
2008$0.0000
2007$0.4003
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Long-term Capital Gains

2016$0.0000
2015$0.0000
2014$0.0000
2013$0.0000
2012$0.0000
2011$0.0000
2010$0.0000
2009$0.0000
2008$0.0000
2007$0.0000
Load More

Distributions are per share. Distribution amounts are based on gains and losses realized and income earned by the Fund through October 31 (or earlier under certain circumstances).

Documents

Consent to Electronic Delivery

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