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*
-1.14%
Nav*
$13.02, -0.05
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
1.41%
*As of August 14, 2020
Download Profile Sheet Download Prospectus
Contact Us

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 9.0%-2.5%6.6%0.7%4.2%3.9%3.8%
MSCI Emerging Markets 9.0%-1.5%6.9%3.2%6.5%3.7%4.0%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 9.0%-2.5%6.6%0.7%4.2%3.9%3.8%
MSCI Emerging Markets 9.0%-1.5%6.9%3.2%6.5%3.7%4.0%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 16.3%-10.6%-4.4%-0.1%0.9%3.9%3.2%
MSCI Emerging Markets 18.2%-9.7%-3.0%2.3%3.2%3.6%3.3%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 16.3%-10.6%-4.4%-0.1%0.9%3.9%3.2%
MSCI Emerging Markets 18.2%-9.7%-3.0%2.3%3.2%3.6%3.3%
201920182017201620152014201320122011201020092008
Fund 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 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
16.4%-18.1%39.5%8.9%-16.2%1.8%-2.8%25.6%-18.2%26.1%87.9%-58.5%
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 July 31, 2020)

Benchmark: MSCI Emerging Markets
Asset Allocation
Fund
Stocks 97.8%
Cash 2.2%
Fund Characteristics
Fund Benchmark
No. of holdings 117 1384
Weighted avg. market cap (US $MM) $148,053 $121,211
NTM price/earnings 11.7 14.5
Price/book value 1.5 1.8
NTM EPS revision (wtd. avg) 11.0 5.8
Net assets $560,062,680 -
TOP 10 ACTIVE HOLDINGS
Security Country Active weight*
Tencent Holdings Ltd. China 1.9%
China Construction Bank Corp. China 1.5%
Samsung Electronics Co., Ltd. South Korea 1.5%
Anhui Conch Cement Co., Ltd. China 1.2%
MediaTek, Inc. Taiwan 1.0%
Investimentos Itau Brazil 1.0%
JBS SA Brazil 0.9%
Baidu China 0.8%
Kia Motors Corp. South Korea 0.8%
Top Glove Corp. Bhd. Malaysia 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 21.1% 18.4%
Financials 15.9% 18.1%
Consumer Discretionary 15.7% 18.0%
Communication Services 14.9% 13.1%
Materials 6.3% 7.0%
Energy 5.6% 5.7%
Equity Funds 5.3% 0.0%
Consumer Staples 4.5% 6.4%
Health Care 3.0% 4.3%
Industrials 3.0% 4.5%
Real Estate 2.0% 2.5%
Utilities 0.3% 2.2%
TOP 10 COUNTRIES
Country Fund Benchmark
China 41.5% 41.1%
Taiwan 14.3% 13.0%
South Korea 13.8% 11.5%
India 8.4% 8.1%
Brazil 6.2% 5.4%
Russia 5.4% 3.0%
Mexico 1.6% 1.6%
South Africa 1.6% 3.7%
Malaysia 1.4% 1.8%
Thailand 1.2% 2.0%
Regional Allocation
  • Emerging Asia 81.2%
  • Emerging Europe, Middle East, Africa 8.5%
  • Emerging Latin America 8.1%
  • Multi Region Emerging (ETF) 0.0%

Commentary (As of July 31, 2020)

Highlights

  • Emerging Markets (“EM”) equities continued to rebound in July, outperforming developed markets equities during the month.
  • 2020 growth estimates for EM countries have continued to fall due to the economic shutdown stemming from the COVID-19 pandemic. According to Bloomberg consensus estimates, analysts expect overall EM gross domestic product (“GDP”) growth to be -0.1% in 2020 before rebounding to 4.6% in 2021.
  • The MSCI Emerging Markets Growth Index now trades near its most expensive level in history relative to the MSCI Emerging Markets Value Index. We continue to emphasize value factors in our investment process and we believe that EM value stocks are poised to rebound once there is a reduction in COVID-19 uncertainty given the discount relative to EM growth stocks.

Portfolio attribution

Causeway Emerging Markets Fund (“Fund”) performed in line with the Index in July 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. Our bottom-up earnings growth and price momentum factors were positive indicators in July. Our bottom-up value factor was neutral during the month and continues to lag over the year-to-date period after underperforming in 2019. Of our top-down factors, macroeconomic was a positive indicator. Our country factor was a neutral indicator while sector and currency were negative during the month.

Investment outlook

Earnings growth prospects have been improving for several EM companies. Earnings growth upgrades exceed downgrades in EM based on analyst forecasts, a positive on an absolute basis and relative to developed markets counterparts. Within EM, the communication services, consumer discretionary, health care, and information technology sectors experienced net upgrades over the last three months. Information technology companies have posted the strongest net upgrades on both float-weighted and equal-weighted bases, indicating a broad-based upgrade cycle. We are overweight the information technology sector in the Fund due to compelling price momentum and earnings growth characteristics. Communication services experienced net positive earnings upgrades as internet stocks displayed earnings resilience through the COVID-19 lockdown and telecommunications stocks benefitted from their more defensive profiles. A robust online economy also bolstered consumer discretionary stocks. From a country perspective, companies in Taiwan, many of which are heavily exposed to information technology, had the most net upgrades among the major EM economies. Earnings growth prospects for Chinese stocks have also been resilient, buoyed by companies in the communication services and consumer discretionary sectors. Prospects have also started to improve for stocks in countries severely impacted by the COVID-19 shutdown, including Russia and India.

Despite markets posting significantly positive returns in July, the MSCI Emerging Markets Value Index underperformed the MSCI Emerging Markets Growth Index during the month. Following a poor 2019, the MSCI Emerging Markets Value Index has underperformed the MSCI Emerging Markets Growth Index by 23 percentage points on a local currency basis year-to-date. Uncertainty surrounding the COVID-19 pandemic has continued to weigh on EM value stocks. The MSCI Emerging Markets Growth Index now trades near its most expensive level in history relative to the MSCI Emerging Markets Value Index – a 124%premium on a next-twelve-month price-to-earnings basis and a 266% premium on a price-to-bookvalue basis. We continue to emphasize value factors in our investment process and we believe that EM value stocks are poised to rebound once there is a reduction in COVID-19 uncertainty given the discount relative to EM growth stocks.

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 $0.2362 $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:

Forms: