The Causeway Global Value Fund (“Fund”), on a net asset value basis, outperformed the Index during the month, due primarily to country allocation (a byproduct of our bottom-up stock selection process). On a gross return basis, Fund holdings in the materials, commercial & professional services, and banks industry groups detracted from relative performance. Holdings in the semiconductors & semi equipment and pharmaceuticals & biotechnology industry groups, as well as an underweight position in the consumer discretionary distribution & retail industry group, offset some of the underperformance compared to the Index. The largest detractor was Cognizant Technology Solutions Corp. (United States). Additional notable detractors included paper-based packaging solutions company, Graphic Packaging Holding Co. (United States), and online services company, Tencent Holdings Ltd. (China). The top contributor to return was electronic equipment manufacturer, Samsung Electronics Co., Ltd. (South Korea). Other notable contributors included semiconductor company, Renesas Electronics Corp. (Japan), and pharmaceutical company, AstraZeneca PLC (United Kingdom).
Investment Outlook
In the absence of a prolonged geopolitical conflict in the Middle East, sustained earnings growth and abundant global liquidity could lift global equity market levels into 2026. While inflation progress remains uneven, G-7 central banks face mounting political and economic pressure to prioritize growth, suggesting an accommodative bias in monetary policy. In the United States, assuming no material escalation in tariffs and inflation, favorable tax and regulatory conditions should underpin continued economic expansion. We expect AI-driven capital expenditures to broaden beyond graphics processing units (GPUs) into power infrastructure, data center development, cooling, and networking. Accessible credit and a less restrictive regulatory backdrop appear also likely to drive a surge in M&A activity across major developed markets, supporting both public and private asset valuations. Europe and Japan could attract increased global capital flows if deregulation efforts persist and Europe advances toward deeper single-market integration and institutional coordination. Political polarization and potential voter backlash remain risks to the pace and durability of reform in both the US and Europe, especially if inflation re-accelerates or AI-related employment concerns intensify.
With conflict-induced spikes in market volatility, stock selection remains paramount. We expect some of the portfolio’s most attractive opportunities to come from companies undergoing operational restructuring, where capable management teams can re-accelerate cash flow growth—often in currently unpopular areas such as industrials and consumer staples. In health care, we are focused on businesses with durable pricing power, established franchises, and underappreciated pipelines, viewing periodic setbacks as potential entry points. We also see improving prospects among technology laggards, particularly where we believe cyclical challenges are being misread as structural. Our research seeks to distinguish permanent impairment from temporary disruption, especially in IT Services, enterprise software, and analog semiconductors, while carefully assessing the implications of rising Chinese competition.
Periods of market volatility may lead to short-term price dislocations. As active managers, we view such volatility as both a risk to be managed and a potential opportunity to initiate or add to high-conviction positions at attractive valuations, provided our fundamental thesis remains intact.
As leadership broadens across global equity markets, we see an expanding opportunity set for disciplined, valuation-based active management. By focusing on cash flow trajectory, balance sheet strength, and management execution, we seek to identify mispriced securities where we believe long-term fundamentals are not fully reflected in current valuations.
International Small Cap Fund
Portfolio Attribution
The Causeway International Small Cap Fund (“Fund”) outperformed the Index during the month. To evaluate stocks in our investible universe, our multi-factor quantitative model employs five bottom-up factor categories – valuation, sentiment, technical indicators, quality, and corporate events – and two top-down factor categories assessing macroeconomic and country aggregate characteristics. Most alpha factor categories delivered positive returns in February. Among our bottom-up factor groups, our technical, sentiment, and corporate events factors posted the most positive monthly returns, and technical is the best-performing factor group over the last twelve months. Value was also slightly positive. Quality, which is the only factor group with negative returns over the last twelve months, also posted negative returns in February. Returns to our macroeconomic and country aggregate factors were positive in February as countries exhibiting more attractive characteristics (such as Japan and Canada) outperformed those with relatively weaker characteristics (such as Australia). All factor groups remain positive on an inception -to-date basis.
Investment Outlook
International small caps (ACWI ex USA Small Cap Index) trade at a similar multiple as their larger-cap (ACWI ex USA Index) peers on a forward P/E basis despite typically trading at a premium. In addition to the attractive relative valuation of the asset class overall, Causeway’s International Small Cap portfolio continues to trade at a substantial discount to the Index while simultaneously exhibiting more favorable growth, quality, momentum, and positive estimate revisions than the Index. We believe that this highly attractive combination of characteristics better insulates our portfolio from future volatility.
We believe another attractive feature of international small caps is that they exhibit greater valuation dispersion than large caps on both a forward earnings yield and B/P basis. This indicates more information content in the valuation ratios of small caps. In addition to exhibiting greater valuation dispersion, small caps exhibit a higher long-term earnings per share growth trend. We continue to monitor the fluid conflict in the Middle East and the Fund remains underweight stocks in the EMEA and Developed Middle East regions due primarily to bottom-up considerations.
International Opportunities Fund
Portfolio Attribution
The Causeway International Opportunities Fund (“Fund”) on a net asset value basis, performed in line with the Index during the month. On a gross return basis, Fund holdings in the semiconductor & semi equipment, health care equipment & services, and technology hardware & equipment industry groups contributed to relative performance. Holdings in the materials, pharmaceuticals & biotechnology, and software & services industry groups detracted from relative performance. The greatest contributors to absolute return included electronic equipment manufacturer, Samsung Electronics Co., Ltd. (South Korea), integrated circuit manufacturer, Taiwan Semiconductor Manufacturing Co., Ltd. (Taiwan), and semiconductor company, Renesas Electronics Corp. (Japan). The largest detractors from absolute returns included global healthcare company, Novo Nordisk A/S (Denmark), online services company, Tencent Holdings Ltd. (China), and information technology services and consulting company, Capgemini SE (France).
We use a proprietary quantitative equity allocation model that assists the portfolio managers in determining the weight of emerging versus developed markets in the Fund. Our allocation relative to the weight of emerging markets in the Index is currently overweight. We identify five primary factors as most indicative of the ideal allocation target: valuation, quality, earnings growth, macroeconomic, and risk aversion. Our valuation, earnings growth, risk aversion, and macroeconomic factors are positive for emerging markets. Our quality metric, which includes such measures as profit margins and return on equity, is also positive.
Investment Outlook
In the absence of a prolonged geopolitical conflict in the Middle East, sustained earnings growth and abundant global liquidity could lift global equity market levels into 2026. While inflation progress remains uneven, G-7 central banks face mounting political and economic pressure to prioritize growth, suggesting an accommodative bias in monetary policy. Europe and Japan could attract increased global capital flows if deregulation efforts persist and Europe advances toward deeper single-market integration and institutional coordination. With conflict-induced spikes in market volatility, stock selection remains paramount. In the developed markets portion of the portfolio, we expect some of the portfolio’s most attractive opportunities to come from companies undergoing operational restructuring, where capable management teams can re-accelerate cash flow growth—often in currently unpopular areas such as industrials and consumer staples.
The US Federal Reserve recently lowered its target interest rate and announced quantitative easing measures to maintain supportive financial conditions. After strong performance in 2025, we believe the 2026 outlook for EM equities is supported by stable to falling US interest rates. From a country perspective, we are identifying attractive investment opportunities in South Korea. Strong earnings growth in the South Korean semiconductor sector, corporate governance reforms, and robust demand for goods in sectors with strategic importance such as defense, nuclear, power transformers, and shipbuilding have bolstered Korean stocks. We believe these tailwinds will persist in 2026. We were overweight South Korean stocks in the Fund as of year-end. We continue to monitor the fluid conflict in the Middle East and the Fund remains underweight stocks in the emerging Europe, Middle East, and Africa region due primarily to bottom-up considerations.
Emerging Markets Fund
Portfolio Attribution
The Causeway Emerging Markets Fund (“Fund”) outperformed the Index in February 2026. We use both bottom-up “stock-specific” and top-down factor categories to forecast alpha for the stocks in the Fund’s investable universe. Our bottom-up technical (price momentum), growth, corporate events, and valuation factors were positive indicators in February. Our competitive strength factor was a negative indicator. Our top-down currency, macroeconomic, and country/sector aggregate were positive indicators during the month.
Investment Outlook
The US Federal Reserve recently lowered its target interest rate and announced quantitative easing measures to maintain supportive financial conditions. After strong performance in 2025, we believe the 2026 outlook for EM equities is supported by stable to falling US interest rates. From a country perspective, we are identifying attractive investment opportunities in South Korea. Strong earnings growth in the South Korean semiconductor sector, corporate governance reforms, and robust demand for goods in sectors with strategic importance such as defense, nuclear, power transformers, and shipbuilding have bolstered Korean stocks. We believe these tailwinds will persist in 2026. We were overweight South Korean stocks in the Fund as of year-end. We continue to monitor the fluid conflict in the Middle East and the Fund remains underweight stocks in the EMEA region due primarily to bottom-up considerations.
Within EM, we continue to identify, in our view, attractive investment opportunities in small cap companies. Historically, our investment process has uncovered EM small cap stocks with alpha potential. The Fund’s allocation to small cap stocks was near the high end of the historical range at year-end.
International Value Fund
Portfolio Attribution
The Causeway International Value Fund (“Fund”), on a net asset value basis, modestly outperformed the Index during the month, due primarily to country allocation (a byproduct of our bottom-up stock selection process). On a gross return basis, Fund holdings in the pharmaceuticals & biotechnology, banks, and materials industry groups detracted from relative performance. Holdings in the semiconductors & semi equipment, technology hardware & equipment, and health care equipment & services industry groups offset some of the underperformance compared to the Index. The largest detractor was global healthcare company, Novo Nordisk A/S (Denmark). Additional notable detractors included information technology services and consulting company, Capgemini SE (France), and specialty chemicals company, Syensqo NV (Belgium). The top contributor to return was electronic equipment manufacturer, Samsung Electronics Co., Ltd. (South Korea). Other notable contributors included pneumatic controls manufacturer, SMC Corporation (Japan), and semiconductor company, Renesas Electronics Corp. (Japan).
Investment Outlook
In the absence of prolonged geopolitical conflict, sustained earnings growth and abundant global liquidity could lift global equity market levels into 2026. While inflation progress remains uneven, G-7 central banks face mounting political and economic pressure to prioritize growth, suggesting an accommodative bias in monetary policy. In the United States, assuming no material escalation in tariffs and inflation, favorable tax and regulatory conditions should underpin continued economic expansion. We expect AI-driven capital expenditures to broaden beyond graphics processing units (GPUs) into power infrastructure, data center development, cooling, and networking. Accessible credit and a less restrictive regulatory backdrop appear also likely to drive a surge in M&A activity across major developed markets, supporting both public and private asset valuations. Europe and Japan could attract increased global capital flows if deregulation efforts persist and Europe advances toward deeper single-market integration and institutional coordination. Political polarization and potential voter backlash remain risks to the pace and durability of reform, especially if inflation re-accelerates or AI-related employment concerns intensify.
With spikes in market volatility, stock selection remains paramount. We expect some of the portfolio’s most attractive opportunities to come from companies undergoing operational restructuring, where capable management teams can re-accelerate cash flow growth—often in currently unpopular areas such as industrials and consumer staples. In health care, we are focused on businesses with durable pricing power, established franchises, and underappreciated pipelines, viewing periodic setbacks as potential entry points. We also see improving prospects among technology laggards, particularly where we believe cyclical challenges are being misread as structural. Our research seeks to distinguish permanent impairment from temporary disruption, especially in IT Services, enterprise software, and analog semiconductors, while carefully assessing the implications of rising Chinese competition.
Periods of market volatility may lead to short-term price dislocations. As active managers, we view such volatility not only as a risk to be managed, but also as a potential opportunity to initiate or add to high-conviction positions at attractive valuations, provided our fundamental thesis remains intact.
As leadership broadens across global equity markets, we see an expanding opportunity set for disciplined, valuation-based active management. By focusing on cash flow trajectory, balance sheet strength, and management execution, we seek to identify mispriced securities where we believe long-term fundamentals are not fully reflected in current valuations.
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