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International Small Cap Fund

NAV (as of 19 Oct 2017)

$13.68, -0.06

YTD

+29.91%

INCEPTION

20 Oct 2014

TICKER/CUSIP

CVISX/14949P802

Fact Sheet Prospectus

Fund Profile

The Fund invests primarily in common stocks of companies with smaller market capitalizations located in developed and emerging markets outside the U.S. The Fund normally invests at least 80% of its total assets in equity securities of companies with smaller market capitalizations. Smaller market capitalization companies are companies with market capitalizations that do not exceed the highest market capitalization of a company within the Fund’s benchmark, the MSCI ACWI ex USA Small Cap Index (Gross), at the time of purchase. Some of these companies, although small by U.S. standards, might be large companies in their local markets. The Fund may continue to hold securities of a portfolio company that appreciate above the smaller market capitalization threshold and thus may from time to time hold less than 80% of its total assets in equity securities of companies with smaller market capitalizations. The Fund may invest in a wide range of industries.

Minimum Investment$5,000
Sales ChargeNone
Net Expense Ratio1.58%
Gross Expense Ratio3.71%
Dividend FrequencyAnnual
Capital Gain FrequencyAnnual
BenchmarkMSCI AC World ex USA Small Cap

Performance

Fund Quarter to Date Year to Date 1 Year Since Inception
CVISX 10.3%28.7%27.5%12.6%
MSCI AC World ex USA Small Cap 7.0%23.9%19.6%10.5%
Fund Quarter to Date Year to Date 1 Year Since Inception
CVISX 10.3%28.7%27.5%12.6%
MSCI AC World ex USA Small Cap 7.0%23.9%19.6%10.5%

Portfolio

Asset Allocation as of 30 Sep 2017

Stocks 98.6%
Cash 1.4%

Characteristics as of 30 Sep 2017

Causeway MSCI AC World ex USA Small Cap
No. of Holdings 124 4298
Wtd. Avg. Market Cap (Mn $US)$1,430$1,805
FY2 Price/Earnings9.214.8
Price/Book Value1.31.6

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. The FY2 P/E ratio is a forward P/E ratio using a next-twenty four months EPS estimate in the denominator.

SECTOR WEIGHTS as of 30 Sep 2017

Industrials15.66%
Real Estate15.12%
Financials14.60%
Information Technology13.98%
Materials12.26%
Consumer Discretionary11.56%
Energy6.90%
Health Care3.04%
Utilities2.15%
Consumer Staples1.97%
Equity Funds1.41%
Telecommunication Services0.00%

(VS. Benchmark)

Industrials20.14%
Real Estate10.04%
Financials10.52%
Information Technology12.24%
Materials10.93%
Consumer Discretionary15.69%
Energy3.53%
Health Care6.64%
Utilities2.83%
Consumer Staples6.34%
Equity Funds0.00%
Telecommunication Services1.11%
Industrials
Real Estate
Financials
Information Technology
Materials
Consumer Discretionary
Energy
Health Care
Utilities
Consumer Staples
Equity Funds
Telecommunication Services
Other

TOP 10 COUNTRIES as of 30 Sep 2017

Japan18.41%
United Kingdom8.20%
China7.77%
Canada7.34%
Italy5.51%
Australia5.20%
France3.96%
South Korea3.66%
Norway3.45%
Germany3.23%
Sweden2.86%
Taiwan2.83%
Netherlands2.55%
Israel2.24%
Singapore1.92%
Greece1.91%
Mexico1.80%
Turkey1.77%
Belgium1.75%
New Zealand1.72%
Thailand1.71%
Spain1.68%
Switzerland1.61%
Finland1.32%
India1.17%
Indonesia1.07%
Hong Kong0.52%
Denmark0.41%
Malaysia0.33%
Austria0.25%
Egypt0.24%
Multi-National Developed0.24%
Portugal0.00%
Ireland0.00%
Pakistan0.00%
Philippines0.00%
Czech Republic0.00%
Hungary0.00%
Poland0.00%
Qatar0.00%
Russia0.00%
South Africa0.00%
Peru0.00%
Multi-National All Country0.00%
United Arab Emirates0.00%
Brazil0.00%
Chile0.00%
Colombia0.00%

(VS. Benchmark)

Japan21.18%
United Kingdom13.15%
China4.73%
Canada6.78%
Italy3.00%
Australia4.32%
France3.32%
South Korea3.27%
Norway1.22%
Germany4.93%
Sweden3.78%
Taiwan3.86%
Netherlands1.67%
Israel1.08%
Singapore1.12%
Greece0.17%
Mexico0.64%
Turkey0.25%
Belgium1.35%
New Zealand0.78%
Thailand0.82%
Spain1.67%
Switzerland3.43%
Finland1.10%
India2.89%
Indonesia0.48%
Hong Kong1.56%
Denmark1.26%
Malaysia0.70%
Austria0.69%
Egypt0.08%
Multi-National Developed0.00%
Portugal0.27%
Ireland0.73%
Pakistan0.19%
Philippines0.21%
Czech Republic0.03%
Hungary0.02%
Poland0.28%
Qatar0.10%
Russia0.14%
South Africa1.05%
Peru0.04%
Multi-National All Country0.00%
United Arab Emirates0.13%
Brazil1.22%
Chile0.26%
Colombia0.08%
Japan
United Kingdom
China
Canada
Italy
Australia
France
South Korea
Norway
Germany
Sweden
Taiwan
Netherlands
Israel
Singapore
Greece
Mexico
Turkey
Belgium
New Zealand
Thailand
Spain
Switzerland
Finland
India
Indonesia
Hong Kong
Denmark
Malaysia
Austria
Egypt
Multi-National Developed
Portugal
Ireland
Pakistan
Philippines
Czech Republic
Hungary
Poland
Qatar
Russia
South Africa
Peru
Multi-National All Country
United Arab Emirates
Brazil
Chile
Colombia
Other

TOP 10 ACTIVE HOLDINGS as of 30 Sep 2017

Security Country Industry Active Weight*
Wüstenrot & Württembergische AG Germany Insurance 2.0
Mineral Resources Ltd. Australia Materials 1.9
AGF Management Canada Diversified Financials 1.9
Hemfosa Fastigheter AB Sweden Real Estate 1.9
Immobiliare Grande Distribuzione SpA Italy Real Estate 1.9
Yanlord Land Group Ltd. Singapore Real Estate 1.9
ASR Nederland NV Netherlands Insurance 1.9
Sojitz Corp. Japan Capital Goods 1.9
Paz Oil Co. Ltd. Israel Energy 1.9
Motor Oil (Hellas) Corith Refineries SA Greece Energy 1.9

*Active defined as Fund weight minus MSCI ACWI ex USA Small Cap Index weight. Holdings are subject to change.

Approach

For Causeway International Small Cap Fund, our quantitative process examines a multitude of factors within four main categories to gauge the return potential of a stock. First, we seek relatively inexpensive valuations. Second, we want to see accelerating earnings growth prospects and upward earnings estimate revisions from the sell-side analysts who cover the stock. Third, we look for positive recent momentum, since recent trends tend to persist. And fourth, we want to find quality by seeking stocks with a focus on strong free cash flow generation rather than simply sales growth. We then rank the stocks on these factors to identify candidates that we believe should produce the most attractive risk-adjusted returns. Before we establish new positions, our fundamental portfolio managers and analysts have the opportunity to review stocks in their sector of coverage and report any “red flags” that may be outside the scope of quantitative analysis.

We take many steps to monitor and manage risk within the portfolio. We start by including in our tradable universe only the roughly 2,800 stocks that trade at least $1 million per day on average, to seek sufficient liquidity and to minimize market impact when we enter and exit positions. We intend for the portfolio to also typically contain between 120 and 200 stocks at any one time, and this breadth is intended to limit idiosyncratic risk.

Commentary

PERFORMANCE REVIEW for the month ended 30 Sep 2017


International smaller capitalization equities delivered strong returns in September, extending the run of consecutive positive absolute performance to nine months. International smaller capitalization equities in developed markets performed in-line with their larger developed market peers. Meanwhile, for smaller capitalization stocks, developed markets outperformed emerging markets during the month, bucking the 2017 year-to-date trend, and emerging markets have outperformed developed markets by over 8% over the 2017 year-to-date period. Within emerging markets, smaller capitalization equities slightly outperformed larger capitalization equities, during the month, in a year when, overall, emerging market larger capitalization equities have significantly outperformed the equities of smaller capitalization companies.

Within the MSCI ACWI ex USA Small Cap Index (“Index”), nine out of eleven sectors posted positive returns in September. Among them, the top performing sectors were energy, industrials, and consumer discretionary. Consumer staples, utilities, and telecommunication services were the weakest performers although only two of the three sectors had negative returns for the month.

Causeway International Small Cap Fund (“Fund”) underperformed the Index during the month. To evaluate stocks in our investable universe, our multi-factor quantitative model employs four broad bottom-up factor categories: valuation, earnings growth, technical indicators, and quality. Value factors posted positive returns for September, and value remains the best-performing factor group over the past 12 months. Earnings growth factors posted the strongest returns in September, even though they have trailed the other alpha (return in excess of the Index) factor groups over the past 12 months. Technical factors had slightly negative returns in September but are still the strongest factor group over the 2017 year-to-date period. The quality factor group posted positive returns in September, and remains the most consistently positive factor group performer over the last 12 months. All factor group returns are positive over the 2017 year-to-date period, over the last 12 months, and all remain positive on an inception to date basis.

Fund holdings in the information technology, health care, and energy sectors detracted the most from relative performance. However, holdings in the real estate and materials sectors, as well as an underweight position in the consumer staples sector, offset a portion of the underperformance. September’s underperformance was primarily driven by stock selection. The largest detractor to relative performance was residential property developer, Yuzhou Properties Co., Ltd. (China). Additional top detractors included opioid addiction pharmaceutical specialty company, Indivior Plc (United Kingdom), mailing and communications solution provider, Neopost SA (France), plastics & polymers manufacturer, Korea Petro Chemical Ind Co., Ltd. (South Korea), and reinsurer, Korean Reinsurance Co. (South Korea). The largest contributor to relative performance was land developer, Agile Group Holdings Ltd. (China). Additional contributors included airline, Finnair Oyj (Finland), silicon wafer manufacturer, Siltronic AG (Germany), mining industry crushing service provider, Mineral Resources Ltd. (Australia), and building product manufacturer, CSR Ltd. (Australia).

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$0.2619
2015$0.2095
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Short-term Capital Gains

2016$0.0000
2015$0.0000
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Long-term Capital Gains

2016$0.0000
2015$0.0000
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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

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