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, earnings growth, technical indicators, macroeconomics, currency, countries and sectors.

YTD Return*
+10.81%
Nav*
$14.45, +0.18
Inception
March 30, 2007
Cusip
149498107
Benchmark
MSCI Emerging Markets
Minimum Investment
$1,000,000
Sales Charge
None
Net Expense Ratio
1.10%
Gross Expense Ratio
1.16%
*As of November 27, 2020
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Strategy overview

The portfolio managers discuss our Emerging Markets strategy.

Portfolio managers

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

Performance

QTD YTD 1 year3 years5 years10 years Since inception
Fund 2.0%-0.1%7.9%-0.2%6.1%3.0%4.1%
MSCI Emerging Markets 2.1%1.1%8.6%2.3%8.3%2.8%4.1%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 2.0%-0.1%7.9%-0.2%6.1%3.0%4.1%
MSCI Emerging Markets 2.1%1.1%8.6%2.3%8.3%2.8%4.1%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 9.3%-2.1%9.8%0.3%6.9%3.2%4.0%
MSCI Emerging Markets 9.7%-0.9%10.9%2.8%9.4%2.9%4.0%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 9.3%-2.1%9.8%0.3%6.9%3.2%4.0%
MSCI Emerging Markets 9.7%-0.9%10.9%2.8%9.4%2.9%4.0%
201920182017201620152014201320122011201020092008
Fund 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 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
201920182017201620152014201320122011201020092008
16.7%-17.9%39.8%9.2%-16.0%2.1%-2.6%25.8%-18.1%26.3%88.1%-58.4%
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 October 31, 2020)

Benchmark: MSCI Emerging Markets
Asset Allocation
Fund
Stocks 98.9%
Cash 1.1%
Fund Characteristics
Fund Benchmark
No. of holdings 127 1391
Weighted avg. market cap (US $MM) $179,752 $148,993
NTM price/earnings 10.9 13.8
Price/book value 1.4 1.8
NTM EPS revision (wtd. avg) 19.1 14.2
Net assets $2,862,726,228 -
TOP 10 ACTIVE HOLDINGS
Security Country Active weight*
Tencent Holdings Ltd. China 2.1%
China Construction Bank Corp. China 1.6%
Samsung Electronics Co., Ltd. South Korea 1.3%
Taiwan Semiconductor Manufacturing Co., Ltd. Taiwan 1.2%
Anhui Conch Cement Co., Ltd. China 0.9%
Kia Motors Corp. South Korea 0.9%
Baidu China 0.8%
MediaTek, Inc. Taiwan 0.8%
KB Financial Group, Inc. South Korea 0.7%
Hana Financial Group, Inc. South Korea 0.7%

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 21.8% 18.4%
Consumer Discretionary 18.7% 20.9%
Financials 15.1% 17.1%
Communication Services 15.1% 13.2%
Materials 6.8% 6.8%
Equity Funds 4.7% 0.0%
Energy 4.6% 4.9%
Consumer Staples 4.3% 5.9%
Health Care 3.1% 4.3%
Industrials 2.6% 4.3%
Real Estate 1.7% 2.3%
Utilities 0.2% 1.9%
TOP 10 COUNTRIES
Country Fund Benchmark
China 42.7% 43.2%
South Korea 15.6% 11.9%
Taiwan 14.3% 12.7%
India 9.4% 8.1%
Brazil 4.9% 4.4%
Russia 3.8% 2.7%
South Africa 2.1% 3.5%
Mexico 1.7% 1.6%
Malaysia 1.2% 1.7%
Thailand 0.9% 1.7%
Regional Allocation
  • Emerging Asia 84.9%
  • Emerging Europe, Middle East, Africa 7.2%
  • Emerging Latin America 6.9%
  • Pacific 0.0%

Commentary (As of October 31, 2020)

Highlights

  • Buoyed by Chinese stocks, emerging markets (“EM”) equities outperformed most developed markets in October.
  • A “blue wave” – Democratic victory in the presidential election combined with a majority in the Senate - would likely be the most positive outcome for EM stocks. We believe this outcome would lead to the most US fiscal spending and higher US debt levels. This would likely stimulate global growth and support EM equities while pressuring the US dollar relative to EM currencies. However, even in other election scenarios, we do not envision a strong US dollar given the fact that fiscal and monetary stimulus will likely continue to be accommodative in the US.
  • We continue to emphasize value factors in our multi-factor investment process. We believe that EM value stocks are poised to rebound given the valuation discount, the anticipated resumption of global growth in 2021, and the likely reduction, ultimately, in uncertainty following the US election.

Portfolio attribution

Causeway Emerging Markets Fund (“Fund”) performed in-line with the Index in October 2020. 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. After underperforming over most recent periods, our bottom-upvalue factor rebounded during the month. Our bottom-upearnings growth and price momentum factors were also positive indicators in October.Of our top-down factors, currency was a positive indicator while our macroeconomic, country, and sector factors were negative.

Investment outlook

Earnings growth prospects have been improving for many EM companies. Earnings growth upgrades have exceeded downgrades in all but three sectors. The information technology, materials, and consumer discretionary sectors have experienced the strongest net upgrades. Information technology companies continue to benefit from increased technological adoption during the pandemic as well as strong demand related to 5G. Materials companies have experienced net upgrades as commodity prices have stabilized amid improving global growth. Consumer discretionary companies have also benefitted from a resumption of global growth as well as exposure to e-commerce. From a country perspective, companies in the technology-orientedeconomies of South Korea and Taiwan experienced the strongest net upgrades. Brazil, India, South Africa, and Russia have also experienced strong net upgrades as economic activity has resumed after declining significantly in the early stages of the pandemic. India and Brazil have also seen sharp rallies in their OECD Leading Economic Indicators. Net upgrades for Chinese companies have declined over the past three months as the country’s economic growth recovered relatively early and many companies already experienced an upgrade cycle. In Thailand, net upgrades have been weak due in part to limited tourism amid the pandemic.

Uncertainty surrounding the COVID-19 pandemic continued to weigh on EM value stocks in October. While our value factor delivered positive performance during the month, the MSCI Emerging Markets Value Index underperformed the MSCI Emerging Markets Growth Index. The MSCI EM Value Index is trading near record low valuations based on both price-to-earnings and price-to-book value ratios. We continue to emphasize value factors in our multi-factor investment process. We believe that EM value stocks are poised to rebound given the valuation discount, the anticipated resumption of global growth in 2021, and the likely reduction, ultimately, in uncertainty following the US election.

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
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:

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