Diversified exposure to emerging markets, seeking to capture value and growth

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.

Causeway uses a quantitative investment approach to purchase and sell investments for the Fund. Causeway’s proprietary computer model analyzes a variety of factors to assist in selecting securities. The model currently analyzes factors relating to valuation, sentiment, technical indicators, macroeconomics, currency, and country-sector aggregate.

YTD Return*
+16.50%
Nav*
$11.44, +0.08
Inception
March 30, 2007
Cusip
149498107
Benchmark
MSCI Emerging Markets
Minimum Investment
$1,000,000
Sales Charge
None
Gross Expense Ratio
1.16%
Net Expense Ratio
1.11%
*As of July 22, 2024
**Contractual fee waivers are in effect until 1/31/2025.

Strategy overview

The portfolio managers discuss our Emerging Markets strategy.

Portfolio managers

Quantitative Portfolio Manager
Head of Quantitative Research
Quantitative Portfolio Manager
Quantitative Portfolio Manager
Quantitative Portfolio Manager

Performance

QTD YTD 1 year3 years5 years10 years Since inception
Fund 9.1%17.5%25.5%-1.3%5.6%3.5%4.4%
MSCI Emerging Markets 5.1%7.7%13.0%-4.7%3.5%3.2%3.8%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 9.1%17.5%25.5%-1.3%5.6%3.5%4.4%
MSCI Emerging Markets 5.1%7.7%13.0%-4.7%3.5%3.2%3.8%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 9.1%17.5%25.5%-1.3%5.6%3.5%4.4%
MSCI Emerging Markets 5.1%7.7%13.0%-4.7%3.5%3.2%3.8%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 9.1%17.5%25.5%-1.3%5.6%3.5%4.4%
MSCI Emerging Markets 5.1%7.7%13.0%-4.7%3.5%3.2%3.8%
2023202220212020201920182017201620152014201320122011201020092008
Fund 17.2%-23.0%-1.3%16.9%16.7%-17.9%39.8%9.2%-16.0%2.1%-2.6%25.8%-18.1%26.3%88.1%-58.4%
MSCI Emerging Markets 10.3%-19.7%-2.2%18.7%18.9%-14.2%37.8%11.6%-14.6%-1.8%-2.3%18.6%-18.2%19.2%79.0%-53.2%
Fund
MSCI Emerging Markets
2023202220212020201920182017201620152014201320122011201020092008
17.2%-23.0%-1.3%16.9%16.7%-17.9%39.8%9.2%-16.0%2.1%-2.6%25.8%-18.1%26.3%88.1%-58.4%
10.3%-19.7%-2.2%18.7%18.9%-14.2%37.8%11.6%-14.6%-1.8%-2.3%18.6%-18.2%19.2%79.0%-53.2%

Portfolio (as of June 30, 2024)

Benchmark: MSCI Emerging Markets
Asset Allocation
Fund
Stocks 97.7%
Cash 2.3%
Fund Characteristics
Fund Benchmark
No. of holdings 184 1330
Weighted avg. market cap (US $MM) $114,494 $117,127
NTM price/earnings 8.7 12.3
Price/book value 1.3 1.8
NTM EPS revision (wtd. avg) 24.3 14.9
Net assets $1,494,472,885 -
TOP 10 ACTIVE HOLDINGS
Security Country Active weight*
Kia Corp. South Korea 1.8%
China Construction Bank Corp. China 1.8%
REC Ltd. India 1.5%
Hon Hai Precision Industry Co., Ltd. Taiwan 1.3%
Cosco Shipping Holdings Co China 1.0%
Koç Holding A.S. Turkey 1.0%
Banco do Brasil SA Brazil 1.0%
Shriram Finance Ltd. India 0.9%
Asia Vital Components Co., Ltd. Taiwan 0.9%
Hana Financial Group, Inc. South Korea 0.9%

A "weighted average” measures a characteristic by the market capitalization of each stock. Price/book value is the weighted average of the price/book values of all the stocks in a portfolio. The P/B value 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-12-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.

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

SECTOR WEIGHTS
Sector Fund Benchmark
Information Technology 25.3% 25.1%
Financials 15.4% 21.9%
Consumer Discretionary 14.3% 12.3%
Industrials 13.2% 6.9%
Communication Services 9.9% 8.9%
Energy 5.9% 5.2%
Materials 3.1% 6.9%
Health Care 2.8% 3.2%
Utilities 2.8% 3.0%
Equity Funds 2.6% 0.0%
Consumer Staples 1.7% 5.2%
Real Estate 0.7% 1.5%
TOP 10 COUNTRIES
Country Fund Benchmark
China 25.6% 25.1%
Taiwan 21.5% 19.4%
India 20.1% 19.2%
South Korea 16.6% 12.2%
Brazil 4.5% 4.2%
Turkey 3.2% 0.8%
Saudi Arabia 1.2% 3.9%
United Arab Emirates 0.9% 1.1%
Indonesia 0.9% 1.6%
Poland 0.8% 1.0%
Regional Allocation
  • Emerging Asia 86.0%
  • Emerging Europe, Middle East, Africa 6.6%
  • Emerging Latin America 5.1%
  • Multi Region Emerging (ETF) 0.0%

Commentary (As of June 30, 2024)

Highlights

  • Emerging market (“EM”) equities outperformed developed markets in June as continued enthusiasm about artificial intelligence’s transformative potential supported information technology stocks in emerging Asia.
  • The Indian general election concluded in June with the Narendra Modi-led Bharatiya Janata party (“BJP”) losing its standalone majority in the lower house. However, the party retained a majority as part of the National Democratic Alliance. While this result initially disappointed the market, Indian stocks rebounded as the BJP indicated that it would remain committed to investing in infrastructure and instituting reforms.
  • 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 remains near the high end of the historical range.

Portfolio attribution

The Causeway Emerging Markets Fund (“Fund”), on a net asset value basis, modestly underperformed the Index in June 2024. We use both bottom-up “stock-specific” and top-down factor categories to seek to forecast alpha for the stocks in the Fund’s investable universe. Our technical (price momentum), growth, competitive strength, and corporate events factors were positive indicators in June. Valuation was a negative indicator during the month. Our top-down currency factor was a positive indicator while country/sector aggregate and macroeconomic were negative indicators in June.

Quarterly Investment Outlook

The Indian general election concluded in June with the Narendra Modi-led Bharatiya Janata party (“BJP”) losing its standalone majority in the lower house. However, the party retained a majority as part of the National Democratic Alliance. While this result initially disappointed the market, Indian stocks rebounded as the BJP indicated that it would remain committed to investing in infrastructure and instituting reforms. Moreover, Prime Minister Modi’s cabinet appointments were largely holdovers from his last cabinet, allaying concerns that the alliance partners were exerting significant influence over these appointments. We remain confident in our India exposure due to valuation support-the portfolio's Indian stocks currently trade at significant price-to-earnings discounts versus the MSCI India Index. In South Africa, elections appear to be progressing in a business-friendly manner. The African National Congress formed a government of national unity with center-leaning parties. While we believe the new government is well-positioned to address the country’s economic challenges – low growth, fiscal deficits, and poor infrastructure – it remains to be seen if the leaders will be able to implement effective policies in these areas. South Africa was the largest country underweight in the Fund as of quarter-end due to valuation and top-down considerations. We continue to monitor South Africa’s economic environment.

After appearing less attractive for much of 2023, earnings growth upgrades for EM equities are currently more attractive than those in ex-US developed markets. Within EM, growth upgrades appear attractive in Taiwan and South Korea. In contrast, the growth outlook for Mexican and Brazilian stocks has slumped. Economic growth rates in these countries have been falling and the US Federal Reserve’s hawkishness has prevented them from more aggressively lowering their domestic interest rates to spur growth. Within EM more broadly, 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 remains near the high end of the historical range.

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. Current and future holdings are subject to risk. The Fund may invest in derivatives, which are often more volatile than other investments and may magnify the Fund's gains or losses. Investing in ETFs is subject to the risks of the underlying funds. International and emerging markets investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from social, economic or political instability in other nations. Emerging markets and smaller companies involve additional risks and higher volatility.

Distributions

Dividends Short-term capital gains Long-term capital gains
2023 $0.4762 $0.0000 $0.0000
2022 $0.4290 $0.0000 $0.0000
2021 $0.3956 $0.0000 $2.4046
2020 $0.2052 $0.0000 $0.0000
2019 $0.2650 $0.0000 $0.0000
2018 $0.2296 $0.0000 $0.0000
2017 $0.2232 $0.0000 $0.0000
2016 $0.1597 $0.0000 $0.0000
2015 $0.1620 $0.0000 $0.0000
2014 $0.2775 $0.0000 $0.0000
2013 $0.0825 $0.0000 $0.0000
2012 $0.2526 $0.0000 $0.0000
2011 $0.0778 $0.0000 $0.0000
2010 $0.2451 $0.0000 $0.0000
2009 $0.2830 $0.0000 $0.0000
2008 $0.1186 $0.0000 $0.0000
2007 $0.2002 $0.4003 $0.0000

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

Fund information:

Forms: