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Global Absolute Return Fund

Our full alpha-generating capabilities, with lower volatility and low or no equity market correlation

NAV (as of 19 Sep 2017)

$8.88, 0.00




24 Jan 2011



Fact Sheet Prospectus

Fund Profile

The Fund takes long and short exposures in common and preferred stocks of companies located primarily in developed countries outside the U.S. and of companies in the U.S. To obtain exposure to long and short positions in securities, the Fund enters into one or more total return equity swap agreements. Although the Fund is permitted to take direct long and short positions in securities, other than swap agreements, it does not currently intend directly to purchase or sell securities or directly to hold short positions in securities. The Investment Adviser uses its fundamental global value equity strategy to manage the Fund’s long exposures (the “global long portfolio” of the Fund). The Investment Adviser uses its quantitative investment strategy designed to identify short exposures that it expects to underperform the MSCI World Index to manage the Fund’s short exposures (the “global short portfolio” of the Fund).

Minimum Investment$1,000,000
Sales ChargeNone
Net Expense Ratio1.95%
Gross Expense Ratio2.00%
Dividend FrequencyAnnual
Capital Gain FrequencyAnnual
BenchmarkMSCI World


Fund Quarter to Date Year to Date 1 Year3 Year5 Year Since Inception
CGAIX -1.3%-12.7%-7.5%-2.4%-0.2%1.6%
BofAML 90 T Bill 0.2%0.5%0.6%0.3%0.2%0.2%
Fund Quarter to Date Year to Date 1 Year3 Year5 Year Since Inception
CGAIX -5.7%-11.6%-4.6%-1.8%-0.0%1.8%
BofAML 90 T Bill 0.2%0.3%0.5%0.2%0.2%0.2%


Position Details as of 31 Aug 2017

Market Value Long69,456,143
Market Value Short-71,084,311
Net Positional Value-1,628,168
Net Exposure-3.61%
Long Positions 48
Short Positions 126

Characteristics as of 31 Aug 2017

Long Portfolio Short Portfolio MSCI World
No. of Exposures 48 126 1633
Wtd Avg Mkt Cap (Mn $US)$78,910$39,503$110,605
FY2 Price/Earnings12.716.115.8
Price/Book Value1.61.72.3
Return on Equity (%)

A “Weighted Average” measures a characteristic by the market capitalization of each stock. Price/Book Ratio is the weighted average of the price/book ratios of all the stocks in a portfolio. The P/B ratio 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. The FY2 P/E ratio is a forward P/E ratio using a next-twenty four months EPS estimate in the denominator. Return on equity is calculated by taking a year's worth of earnings and dividing them by the average shareholder equity for that year.

Sector Exposure as of 31 Aug 2017

Long Exposure (%)Short Exposure (%)Net Exposure (%)
Telecommunication Services14.45-7.117.34
Information Technology31.23-25.375.86
Health Care23.01-17.725.29
Real Estate1.81-4.76-2.95
Consumer Discretionary13.78-18.44-4.66
Consumer Staples3.58-13.97-10.39

Country Exposure as of 31 Aug 2017

Long Exposure (%)Short Exposure (%)Net Exposure (%)
United Kingdom30.16-19.9910.17
Hong Kong8.80-6.831.97
South Korea6.23-6.32-0.09
United States59.15-70.14-10.99

TOP 10 Positions as of 31 Aug 2017

Top Ten Long PositionsTop Ten Short Positions
CompanyEnding Weight (%)CompanyEnding Weight (%)
Royal Dutch Shell Plc5.13%HD Supply Holdings, Inc.-3.29%
Citigroup, Inc.5.05%Ford Motor Co.-3.16%
Volkswagen AG4.93%Shire Pharmaceuticals-3.15%
China Mobile Ltd.4.86%Autodesk, Inc.-3.11%
East Japan Railway Co.4.59%CSL Ltd.-3.01%
Microsoft Corp.4.57%Rolls-Royce Holdings Plc-3.01%
Barclays Plc4.43%Anheuser-Busch InBev SA/NV-3.01%
Schneider Electric SE4.35%Just Energy Group-3.01%
Oracle Corp.4.34%United Utilities Group Plc-3.00%
KDDI Corp.4.28%Berkshire Hathaway, Inc.-3.00%

Holdings are subject to change.


Causeway Global Absolute Return (GAR) Fund is designed for investors who want equity-like returns with lower volatility and lower market correlation. The Fund invests in global developed markets equities, using swap agreements to obtain exposures to long and short positions.

Causeway uses its fundamental global value equity strategy to manage the Fund’s long exposures and its quantitative investment strategy to manage the short exposures. Both the long and short portfolios seek to add alpha(performance exceeding the long or short MSCI World Index), which is amplified by leverage up to 4x, with a target of 3x.

The GAR Fund attempts to mitigate risk in a number of ways: on the short side, qualitative risk may be captured by a fundamental review of short positions, and short exposures are constrained. Unrealized gains or losses through swap agreements are also constrained, limiting counterparty risk. There are approximately twice as many short exposures as long, designed to mitigate idiosyncratic risk.

The GAR Fund typically has 85-180 long/short exposures. The dollar amount of the long exposures is generally within 10 percentage points of the dollar amount of the short exposures, but the Fund may have sector or regional biases.


PERFORMANCE REVIEW for the month ended 31 Aug 2017

Causeway Global Absolute Return Fund (“Fund”) underperformed the BofA Merrill Lynch 3-Month U.S. Treasury Bill Index in the month of August. The Fund’s underperformance was driven by the long portfolio, as the Fund’s long portfolio underperformed the MSCI World Index (“World Index”). The Fund’s short portfolio underperformed the World Index, contributing positively to overall portfolio return, but not by enough to offset the long portfolio’s underperformance.

Strengthening economic data in developed markets was offset by an upsurge in geopolitical risk, resulting in largely unchanged overall equity market performance for the month. The top performing markets in our investable universe included Portugal, China, Denmark, Norway, and Italy. The worst performing markets included Israel, South Korea, New Zealand, Belgium, and Spain. The best performing sectors in the World Index were utilities, information technology, and materials. The worst performing sectors were energy, financials, and telecommunication services.

The Fund takes long and short notional exposures to securities under swap agreements. We use our fundamental value approach to select securities exposures for the long portfolio of the Fund. The long portfolio underperformed the World Index during the period, due primarily to stock selection. Exposures to the software & services, energy, and technology hardware & equipment industry groups contributed the most to relative underperformance. Exposures to the telecommunication services, health care equipment & services, and food beverage & tobacco industry groups offset some of the relative underperformance. The largest detractor was energy exploration & production company, SM Energy Co. (United States). Additional detractors included oil exploration & production company, PDC Energy, Inc. (United States), travel and tourism technology company, Sabre Corp. (United States), automobile components retailer, Advance Auto Parts, Inc. (United States), and global entertainment content company, Viacom, Inc. (United States). The top contributor to performance was telecommunications services provider, China Mobile Limited (Hong Kong). Additional contributors included jewelry retailer,Signet Group (United States), national air carrier, Japan Airlines Co. Ltd. (Japan), oil & gas exploration company, CNOOC Ltd. (Hong Kong), and software giant, Microsoft Corp. (United States).

We use a quantitative approach to select securities exposures for the short portfolio of the Fund. Our process seeks to obtain exposures to short positions in stocks which we believe are overvalued and have deteriorating earnings growth dynamics, poor technical price movements, and insolvency risk and/or inferior quality of earnings. During the month of August, all factor categories demonstrated predictive power with the exception of value. Companies with worsening earnings growth dynamics, weak technical indicators, and those demonstrating potential insolvency and/or accounting chicanery underperformed, as anticipated. Companies with expensive valuations outperformed, contrary to expectations.

From an industry group perspective, short-side attribution effects were strongest in the household & personal products, health care equipment & services, and capital goods industry groups. Short-side attribution effects were weakest in the banks, retailing and real estate industry groups. At the stock exposure level, successful short exposures included beauty products manufacturer, Coty, Inc. (United States), health care equipment and services company, Acadia Healthcare Co., Inc. (United States), biopharmaceutical company, Shire Plc (United Kingdom), oil & gas exploration company, EOG Resources, Inc. (United States), and sporting equipment and apparel company, Nike Inc. (United States). Short exposures that detracted from the Fund’s performance included construction and industrial products distributor, HD Supply Holdings, Inc. (United States), property developer, China Overseas Land & Investment Ltd. (Hong Kong), secondary cell and plasma display panel manufacturer, Samsung SDI Co., Ltd. (Korea) payments technology company, Visa, Inc. (United States), and medical device manufacturer, DexCom, Inc. (United States).

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.


2013 $0.4332
2012 $0.2807
2011 $0.1015
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Short-term Capital Gains

2013 $0.0000
2012 $0.0000
2011 $0.3053
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Long-term Capital Gains

2013 $0.0000
2012 $0.0000
2011 $0.0000
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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).


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