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*
-14.73%
Nav*
$10.36, +0.26
Inception
March 30, 2007
Cusip
149498206
Benchmark
MSCI Emerging Markets
Minimum Investment
$5,000
Sales Charge
None
Net Expense Ratio
1.35%
Gross Expense Ratio
1.36%
*As of May 17, 2022
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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 -5.0%-12.6%-19.3%2.1%2.9%2.8%3.6%
MSCI Emerging Markets -5.5%-12.1%-18.1%2.6%4.7%3.3%3.8%
QTD YTD 1 year3 years5 years10 years Since inception
Fund -5.0%-12.6%-19.3%2.1%2.9%2.8%3.6%
MSCI Emerging Markets -5.5%-12.1%-18.1%2.6%4.7%3.3%3.8%
QTD YTD 1 year3 years5 years10 years Since inception
Fund -8.0%-8.0%-13.6%4.3%4.2%3.3%3.9%
MSCI Emerging Markets -6.9%-6.9%-11.1%5.3%6.4%3.7%4.2%
QTD YTD 1 year3 years5 years10 years Since inception
Fund -8.0%-8.0%-13.6%4.3%4.2%3.3%3.9%
MSCI Emerging Markets -6.9%-6.9%-11.1%5.3%6.4%3.7%4.2%
20212020201920182017201620152014201320122011201020092008
Fund -1.5%16.7%16.4%-18.1%39.5%8.9%-16.2%1.8%-2.8%25.6%-18.2%26.1%87.9%-58.5%
MSCI Emerging Markets -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
20212020201920182017201620152014201320122011201020092008
-1.5%16.7%16.4%-18.1%39.5%8.9%-16.2%1.8%-2.8%25.6%-18.2%26.1%87.9%-58.5%
-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 April 30, 2022)

Benchmark: MSCI Emerging Markets
Asset Allocation
Fund
Stocks 98.4%
Cash 1.6%
Fund Characteristics
Fund Benchmark
No. of holdings 158 1398
Weighted avg. market cap (US $MM) $76,176 $74,503
NTM price/earnings 6.9 12.2
Price/book value 1.1 1.8
NTM EPS revision (wtd. avg) 10.0 -0.6
Net assets $358,941,099 -
TOP 10 ACTIVE HOLDINGS
Security Country Active weight*
China Construction Bank Corp. China 1.9%
Hindalco Industries India 1.4%
Samsung Electronics Co., Ltd. South Korea 1.4%
JBS SA Brazil 1.4%
Kia Corp. South Korea 1.2%
Banco do Brasil SA Brazil 1.2%
Fubon Financial Holding Co Taiwan 1.1%
Oil & Natural Gas Corp. Ltd. India 1.1%
Sun Pharmaceutical Industries Ltd. India 1.1%
Tata Steel India 1.0%

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 23.9% 20.5%
Financials 21.1% 22.2%
Materials 13.5% 9.2%
Industrials 8.0% 5.4%
Energy 7.2% 5.0%
Consumer Discretionary 6.3% 12.7%
Communication Services 5.1% 10.3%
Consumer Staples 5.1% 6.0%
Equity Funds 4.8% 0.0%
Health Care 2.4% 3.8%
Utilities 0.9% 2.7%
Real Estate 0.0% 2.2%
TOP 10 COUNTRIES
Country Fund Benchmark
China 27.7% 30.6%
Taiwan 17.5% 15.4%
South Korea 16.3% 12.5%
India 14.6% 13.6%
Brazil 5.1% 5.3%
South Africa 3.9% 3.7%
Saudi Arabia 3.5% 4.7%
Thailand 2.9% 1.9%
Indonesia 1.8% 1.9%
Mexico 1.7% 2.2%
Regional Allocation
  • Emerging Asia 81.4%
  • Emerging Europe, Middle East, Africa 10.0%
  • Emerging Latin America 7.0%

Commentary (As of April 30, 2022)

Highlights

  • The ongoing war in Ukraine and Covid-19 lockdowns in China weighed on emerging market (“EM”) assets in April.
  • While Fed interest rate increases can also weigh on EM currencies, many EM central banks have been raising interest rates in anticipation of the Fed’s actions. In April, the Bank of Korea raised its policy rate by 0.25% to 1.5%, the highest level since 2019. We are overweight South Korean equities in the Fund, due in part to attractive valuation, growth, and top-down characteristics. Other EM central banks that have recently raised interest rates include Brazil, Mexico, South Africa, and Taiwan.
  • While we incorporate growth expectations into our multi-factor investment process, we continue to emphasize valuation in our approach. With a balance of favorable valuation, growth, and price momentum characteristics relative to the Index, we believe the portfolio provides outperformance potential looking forward.

Portfolio attribution

The Causeway Emerging Markets Fund (“Fund”) outperformed the Index in April 2022. 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 bottom-up valuation and price momentum factors were positive indicators during the month while growth and competitive strength were negative. Of our top-down factors, our macroeconomic and currency factors were positive. Our country and sector factors were negative indicators in April.

Investment outlook

Earnings growth upgrades for EM equities continue to lag those in developed markets. EM sectors with the weakest earnings upgrades were communication services, consumer discretionary, and real estate. All three of these sectors are dominated by Chinese stocks, which were impacted by the Covid-19 lockdowns. The sectors with the strongest earnings upgrades were energy, information technology, and financials. Energy benefitted from strong oil prices and information technology benefitted from positive revisions for a few larger capitalization stocks. Financials benefitted from rising interest rates. The countries with the weakest net upgrades include China, India, and Thailand. While Covid-19 containment policies have weighed on Chinese stocks, rising commodity prices have dampened the growth outlook for Indian equities. The countries with the strongest net upgrades include Taiwan, Turkey, and Mexico. Positive revisions for larger capitalization companies drove strength in Taiwan. We are overweight Taiwanese stocks in the Fund due to attractive bottom-up and top-down characteristics. Mexican stocks have benefitted from economic linkages with the US. While we incorporate growth expectations into our multi-factor investment process, we continue to emphasize valuation in our approach. With a balance of favorable valuation, growth, and price momentum characteristics relative to the Index, we believe the portfolio provides outperformance potential looking forward.

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
2021 $0.3478 $0.0000 $2.4046
2020 $0.1787 $0.0000 $0.0000
2019 $0.2362 $0.0000 $0.0000
2018 $0.1777 $0.0000 $0.0000
2017 $0.1937 $0.0000 $0.0000
2016 $0.1353 $0.0000 $0.0000
2015 $0.1434 $0.0000 $0.0000
2014 $0.2425 $0.0000 $0.0000
2013 $0.1100 $0.0000 $0.0000
2012 $0.2768 $0.0000 $0.0000
2011 $0.0972 $0.0000 $0.0000
2010 $0.2560 $0.0000 $0.0000
2009 $0.2866 $0.0000 $0.0000
2008 $0.1506 $0.0000 $0.0000
2007 $0.2097 $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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