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*
+16.33%
Nav*
$11.61, -0.02
Inception
March 30, 2007
Cusip
149498206
Benchmark
MSCI Emerging Markets
Minimum Investment
$5,000
Sales Charge
None
Net Expense Ratio
1.36%
Gross Expense Ratio
1.41%
*As of May 17, 2024
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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 2.1%10.0%22.4%-3.0%3.7%3.3%3.9%
MSCI Emerging Markets 0.5%2.9%10.3%-5.3%2.3%3.3%3.5%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 2.1%10.0%22.4%-3.0%3.7%3.3%3.9%
MSCI Emerging Markets 0.5%2.9%10.3%-5.3%2.3%3.3%3.5%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 7.7%7.7%20.0%-3.2%3.6%3.2%3.8%
MSCI Emerging Markets 2.4%2.4%8.6%-4.7%2.6%3.3%3.5%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 7.7%7.7%20.0%-3.2%3.6%3.2%3.8%
MSCI Emerging Markets 2.4%2.4%8.6%-4.7%2.6%3.3%3.5%
2023202220212020201920182017201620152014201320122011201020092008
Fund 16.9%-23.2%-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 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
16.9%-23.2%-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%
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 April 30, 2024)

Benchmark: MSCI Emerging Markets
Asset Allocation
Fund
Stocks 97.6%
Cash 2.4%
Fund Characteristics
Fund Benchmark
No. of holdings 191 1375
Weighted avg. market cap (US $MM) $85,767 $92,682
NTM price/earnings 8.4 12.1
Price/book value 1.3 1.7
NTM EPS revision (wtd. avg) 16.8 5.6
Net assets $365,781,389 -
TOP 10 ACTIVE HOLDINGS
Security Country Active weight*
Kia Corp. South Korea 1.8%
China Construction Bank Corp. China 1.7%
Banco do Brasil SA Brazil 1.6%
REC Ltd. India 1.3%
Petróleo Brasileiro SA Brazil 1.2%
Koç Holding A.S. Turkey 1.1%
Hon Hai Precision Industry Co., Ltd. Taiwan 1.0%
Canara Bank India 0.9%
Hana Financial Group, Inc. South Korea 0.9%
Vipshop Holdings China 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 22.3% 22.7%
Financials 16.6% 22.3%
Consumer Discretionary 13.8% 12.9%
Industrials 12.7% 7.0%
Communication Services 10.3% 9.1%
Energy 7.3% 5.4%
Health Care 4.0% 3.4%
Equity Funds 2.7% 0.0%
Utilities 2.6% 2.9%
Materials 2.5% 7.3%
Consumer Staples 1.8% 5.5%
Real Estate 1.1% 1.6%
TOP 10 COUNTRIES
Country Fund Benchmark
China 27.2% 26.7%
India 20.8% 18.1%
Taiwan 19.8% 17.2%
South Korea 13.1% 12.0%
Brazil 7.0% 5.0%
Turkey 3.2% 0.8%
Saudi Arabia 1.9% 4.1%
United Arab Emirates 1.0% 1.2%
Indonesia 0.9% 1.7%
Mexico 0.8% 2.6%
Regional Allocation
  • Emerging Asia 83.0%
  • Emerging Latin America 8.0%
  • Emerging Europe, Middle East, Africa 6.6%
  • Multi Region Emerging (ETF) 0.0%

Commentary (As of April 30, 2024)

Highlights

  • Led by the emerging Asia region, emerging markets equities outperformed developed markets in April.
  • The South Korean government has introduced its Corporate Value-Up program with the goal of increasing valuations for companies trading significantly below book value. However, given the voluntary nature of the program, we believe the long-term efficacy of the initiative remains questionable. While the Fund was overweight in South Korean stocks at quarter-end, we have been reducing exposure due in part to valuation 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 quarter-end.

Portfolio attribution

The Causeway Emerging Markets Fund (“Fund”), on a net asset value basis, outperformed the Index in April 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. Earlier this year, we added a new bottom-up factor, corporate events, to our model. The corporate events factor was a positive indicator in April. Our valuation, competitive strength, and growth factors were also positive indicators during the month. Our technical (price momentum) factor was a negative indicator. Our top-down country/sector aggregate and currency factors were positive indicators, while macroeconomic was negative in April.

Quarterly Investment Outlook

The South Korean government has introduced its Corporate Value-Up program with the goal of increasing valuations for companies trading significantly below book value. However, given the voluntary nature of the program, we believe the long-term efficacy of the initiative remains questionable. While the Fund was overweight in South Korean stocks at quarter-end, we have been reducing exposure due in part to valuation considerations. In Turkey, the central bank hiked its target interest rate by 500 basis points in March, signaling its commitment to reigning in inflation. This action helped to allay concerns that President Recep Erdogan would interfere with the central bank’s price stability objective in order to spur slowing growth. The Fund was overweight Turkish stocks at quarter-end as compelling bottom-up characteristics more than offset the country’s challenging, but improving, top-down headwinds.

The Fund was also overweight Indian stocks at quarter-end, reflecting attractive bottom-up and top-down characteristics in the country. The Fund’s overweight to Indian small caps has contributed to relative performance over the trailing 12-months ended March 31st, attributable in part to optimism leading into the upcoming general election. 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 was near the high end of the historical range at quarter-end.

*The Causeway Emerging Markets strategy uses quantitative factors that can be grouped into eight categories: valuation, growth, technical indicators, competitive strength, macroeconomic, corporate events, country/sector aggregate, and currency. The return attributed to a factor is the difference between the equally-weighted average return of the highest ranked quintile of companies in the strategy’s emerging markets universe based on that factor and that of the lowest ranked quintile of companies. “Alpha” means performance exceeding the benchmark index.

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 $0.4537 $0.0000 $0.0000
2022 $0.3931 $0.0000 $0.0000
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

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