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International Small Cap Fund

NAV (as of 15 Dec 2017)

$13.75, -0.06

YTD

+30.58%

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
Benchmark MSCI AC World ex USA Small Cap

Performance

Fund Quarter to Date Year to Date 1 Year3 Year Since Inception
CVISX 1.4%30.5%33.4%12.1%12.4%
MSCI AC World ex USA Small Cap 3.4%28.1%30.9%10.8%11.1%
Fund Quarter to Date Year to Date 1 Year3 Year Since Inception
CVISX 10.3%28.7%27.5%0.0%12.6%
MSCI AC World ex USA Small Cap 7.0%23.9%19.6%0.0%10.5%

Portfolio

Asset Allocation as of 30 Nov 2017

Stocks 99.1%
Cash 0.9%

Characteristics as of 30 Nov 2017

Causeway MSCI AC World ex USA Small Cap
No. of Holdings 124 4290
Wtd. Avg. Market Cap (Mn $US)$1,458$1,901
FY2 Price/Earnings8.915.2
Price/Book Value1.21.7

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. 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 Nov 2017

Industrials14.97%
Information Technology14.68%
Financials14.02%
Real Estate13.46%
Materials13.22%
Consumer Discretionary12.69%
Energy5.50%
Equity Funds4.46%
Health Care2.53%
Consumer Staples2.20%
Utilities1.37%
Telecommunication Services0.00%

(VS. Benchmark)

Industrials19.91%
Information Technology12.97%
Financials10.35%
Real Estate9.86%
Materials10.82%
Consumer Discretionary15.62%
Energy3.17%
Equity Funds0.00%
Health Care6.77%
Consumer Staples6.53%
Utilities2.87%
Telecommunication Services1.14%
Industrials
Information Technology
Financials
Real Estate
Materials
Consumer Discretionary
Energy
Equity Funds
Health Care
Consumer Staples
Utilities
Telecommunication Services
Other

TOP 10 COUNTRIES as of 30 Nov 2017

Japan18.72%
China8.63%
United Kingdom7.92%
Canada5.77%
Australia5.25%
Taiwan5.17%
Germany4.93%
Italy4.59%
South Korea4.43%
India3.78%
France3.59%
Sweden2.97%
Norway2.69%
Netherlands2.52%
Greece1.89%
Singapore1.70%
Mexico1.70%
Turkey1.60%
Switzerland1.59%
New Zealand1.51%
South Africa1.39%
Finland1.39%
Indonesia1.10%
Belgium0.92%
Spain0.78%
Thailand0.76%
Israel0.58%
Denmark0.40%
Multi-National All Country0.35%
Egypt0.27%
United Arab Emirates0.24%
Brazil0.00%
Chile0.00%
Colombia0.00%
Peru0.00%
Austria0.00%
Ireland0.00%
Portugal0.00%
Hong Kong0.00%
Czech Republic0.00%
Hungary0.00%
Poland0.00%
Qatar0.00%
Russia0.00%
Malaysia0.00%
Pakistan0.00%
Philippines0.00%

(VS. Benchmark)

Japan22.00%
China4.51%
United Kingdom12.80%
Canada6.47%
Australia4.42%
Taiwan4.10%
Germany4.97%
Italy2.89%
South Korea3.82%
India3.16%
France3.18%
Sweden3.57%
Norway1.11%
Netherlands1.68%
Greece0.16%
Singapore1.09%
Mexico0.58%
Turkey0.21%
Switzerland3.46%
New Zealand0.76%
South Africa1.04%
Finland1.04%
Indonesia0.47%
Belgium1.31%
Spain1.65%
Thailand0.84%
Israel1.09%
Denmark1.18%
Multi-National All Country0.00%
Egypt0.09%
United Arab Emirates0.12%
Brazil1.10%
Chile0.23%
Colombia0.08%
Peru0.04%
Austria0.63%
Ireland0.71%
Portugal0.27%
Hong Kong1.58%
Czech Republic0.02%
Hungary0.02%
Poland0.25%
Qatar0.08%
Russia0.13%
Malaysia0.72%
Pakistan0.17%
Philippines0.19%
Japan
China
United Kingdom
Canada
Australia
Taiwan
Germany
Italy
South Korea
India
France
Sweden
Norway
Netherlands
Greece
Singapore
Mexico
Turkey
Switzerland
New Zealand
South Africa
Finland
Indonesia
Belgium
Spain
Thailand
Israel
Denmark
Multi-National All Country
Egypt
United Arab Emirates
Brazil
Chile
Colombia
Peru
Austria
Ireland
Portugal
Hong Kong
Czech Republic
Hungary
Poland
Qatar
Russia
Malaysia
Pakistan
Philippines
Other

TOP 10 ACTIVE HOLDINGS as of 30 Nov 2017

Security Country Industry Active Weight*
Mineral Resources Ltd. Australia Materials 1.9
Immobiliare Grande Distribuzione SpA Italy Real Estate 1.9
Deutsche Pfandbriefbank AG Germany Banks 1.9
AGF Management Canada Diversified Financials 1.9
Motor Oil (Hellas) Corith Refineries SA Greece Energy 1.9
Hemfosa Fastigheter AB Sweden Real Estate 1.9
Transcontinental Canada Commercial & Professional Services 1.8
Gigabyte Technology Co., Ltd. Taiwan Technology Hardware & Equipment 1.8
Wüstenrot & Württembergische AG Germany Insurance 1.8
Sojitz Corp. Japan Capital Goods 1.8

*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 Nov 2017


International smaller capitalization equities delivered another month of positive returns in November. After eleven consecutive months of positive absolute returns, international smaller capitalization equities, as measured by the MSCI ACWI ex USA Small Cap Index (“Index”) have delivered nearly 30% gross returns in 2017. Overall, international smaller capitalization equities outperformed larger capitalization equities in November. Developed markets outperformed emerging markets in the month of November, however on a year-to-date basis, emerging markets (as measured by the MSCI Emerging Markets Index) have outperformed developed markets (as measured by the MSCI World ex-US Index) by over 10%. Within emerging markets, for the month, smaller capitalization equities (as measured by the MSCI Emerging Markets Small Cap Index) made a strong comeback relative to their larger market cap peers (as measured by the MSCI Emerging Markets Large Cap Index), narrowing their relative underperformance to just over 4% in 2017 year-to-date. Smaller caps in developed markets also slightly outperformed developed large caps.

Within the Index, ten out of eleven sectors posted positive returns in November. Among them, the top performing sectors were telecommunication services, consumer staples, and information technology. Energy, financials, and materials were the weakest performers for the month.

Causeway International Small Cap Fund (“Fund”) underperformed the Index during November. To evaluate stocks in our investable universe, our multi-factor quantitative model employs four bottom-up factor categories: valuation, earnings growth, technical indicators, and quality; and now incorporates two top-down factor categories: macroeconomic, and country aggregate.

Despite posting their second consecutive month of negative performance, value factors have delivered positive returns year-to-date and over the past 12 months. Earnings growth factors posted positive returns in November, and earnings growth factors have outperformed value factors over the 2017 year-to-date period, especially within emerging markets. Technical factors were the top-performing factor group in November, and they are now the strongest factor group over the 2017 year-to-date period and over the past 12 months. The quality factor group posted flat returns in November, and is the weakest factor group performer, though still positive, year-to-date and over the last 12 months. All factor group returns are positive over the 2017 year-to-date period and over the last 12 months, and all remain positive on an inception-to-date basis.

Fund holdings in the industrials, utilities, and consumer staples sectors detracted the most from relative performance. However, holdings in the consumer discretionary, materials, and financials sectors offset a portion of the underperformance. While underperforming for the month, the Fund has outperformed the Index year-to-date, primarily due to stock selection. Similarly, November’s underperformance was primarily driven by stock selection. The largest detractor to relative performance was natural gas & electric utility, Just Energy Group (Canada). Additional top detractors included construction company, Astaldi SpA (Italy), pelagic fishery & seafood company, Austevoll Seafood ASA (Norway), passenger & cargo airline company, Air France-KLM SA (France), and digital communication and shipping solutions provider, Neopost SA (France). The largest contributor to relative performance was retail services provider, GEO Holdings Corp. (Japan). Additional contributors included information technology services provider, Net One Systems Co., Ltd. (Japan), apparel manufacturer, LF Corp. (South Korea), real estate investment company, Immobiliare Grande Distribuzione SpA (Italy), and mining industry crushing service provider, Mineral Resources 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
Load More

Short-term Capital Gains

2016$0.0000
2015$0.0000
Load More

Long-term Capital Gains

2016$0.0000
2015$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

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