Seeking value primarily in developed markets worldwide

The Fund invests primarily in common stocks of companies in developed countries located outside the US and of companies in the US. Normally, the Fund invests the majority of its total assets in companies that pay dividends or repurchase their shares. The Fund may invest up to 20% of its total assets in companies located in emerging (less developed) markets. Under normal circumstances, the Fund will invest at least 40% of its total assets in companies located in a number of countries outside the US. The Fund’s investment objective is to seek long-term growth of capital and income.

YTD Return*
+10.40%
Nav*
$9.98, +0.09
Inception
April 29, 2008
Cusip
14949P307
Benchmark
MSCI ACWI
Minimum Investment
$1,000,000
Sales Charge
None
Net Expense Ratio
1.05%
Gross Expense Ratio
1.08%
*As of September 13, 2019

Strategy overview

The portfolio managers discuss our Global Value strategy.

Portfolio managers

Chief Executive Officer
Fundamental Portfolio Manager
President
Head of Fundamental Research
Fundamental Portfolio Manager
Fundamental Portfolio Manager
Fundamental Portfolio Manager
Fundamental Portfolio Manager
Fundamental Portfolio Manager
Fundamental Portfolio Manager
Fundamental Portfolio Manager

Performance

QTDYTD1 year3 years5 years10 yearsSince inception
Fund-6.4%4.0%-10.3%4.0%1.4%8.4%3.9%
MSCI ACWI-2.0%14.3%0.3%9.8%6.1%9.2%5.3%
QTDYTD1 year3 years5 years10 yearsSince inception
Fund-6.4%4.0%-10.3%4.0%1.4%8.4%3.9%
MSCI ACWI-2.0%14.3%0.3%9.8%6.1%9.2%5.3%
QTDYTD1 year3 years5 years10 yearsSince inception
Fund0.4%11.1%-0.3%8.3%3.1%11.0%4.6%
MSCI ACWI3.8%16.6%6.3%12.2%6.7%10.7%5.6%
QTDYTD1 year3 years5 years10 yearsSince inception
Fund0.4%11.1%-0.3%8.3%3.1%11.0%4.6%
MSCI ACWI3.8%16.6%6.3%12.2%6.7%10.7%5.6%
2018201720162015201420132012201120102009
Fund-11.1%17.9%7.7%-6.3%5.4%29.2%16.5%-1.3%18.5%40.1%
MSCI ACWI-8.2%23.1%8.2%-0.3%5.5%27.4%16.5%-5.0%12.3%30.8%
Fund
MSCI ACWI
2018201720162015201420132012201120102009
-11.1%17.9%7.7%-6.3%5.4%29.2%16.5%-1.3%18.5%40.1%
-8.2%23.1%8.2%-0.3%5.5%27.4%16.5%-5.0%12.3%30.8%

Portfolio (as of August 31, 2019)

Benchmark: MSCI ACWI
Asset Allocation
Fund
Stocks99.0%
Cash1.0%
Fund Characteristics
FundBenchmark
No. of holdings 50 2851
Weighted avg. market cap (US $MM)$74,289$138,552
FY2 price/earnings10.514.4
Price/book value1.32.3
Net assets$78,300,464-
TOP 10 HOLDINGS
Security Country Percent
Volkswagen AGGermany3.8%
UniCredit S.p.A.Italy3.6%
Takeda Pharmaceutical Co., Ltd.Japan3.5%
BASF SEGermany3.5%
China Mobile Ltd.China3.4%
Sabre Corp.United States3.0%
ABB Ltd.Switzerland2.9%
British American Tobacco plcUnited Kingdom2.7%
Alaska Air Group, Inc.United States2.7%
FANUC Corp.Japan2.6%

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.

Holdings are subject to change.

SECTOR WEIGHTS
Sector Fund Benchmark
Information Technology15.9%16.3%
Financials14.9%16.3%
Industrials14.3%10.4%
Communication Services12.6%8.9%
Health Care12.3%11.6%
Energy8.5%5.3%
Materials7.6%4.7%
Consumer Discretionary4.2%10.9%
Consumer Staples4.0%8.7%
Utilities3.9%3.5%
Real Estate0.7%3.4%
TOP 10 COUNTRIES
Country Fund Benchmark
United States35.9%56.0%
United Kingdom18.2%4.7%
Japan11.9%7.2%
Germany8.6%2.5%
China5.7%3.7%
South Korea4.7%1.3%
Switzerland4.6%2.8%
Italy3.6%0.7%
France2.1%3.3%
Netherlands1.8%1.1%
Regional Allocation
  • Europe – other 38.9%
  • North America 37.4%
  • Pacific 11.9%
  • Emerging Asia 10.5%
  • Emerging Europe, Middle East, Africa 0.3%

Commentary (As of August 31, 2019)

Highlights

  • Equity markets contracted in August in a global “risk off” wave, exacerbated by increased trade tensions, recessionary fears, and sinking global bond yields.
  • With approximately one third of global bonds (European and Japanese sovereign, corporate, and mortgage) trading at negative yields, the bond market appears to be signaling an excess of savings versus available low/no risk assets. Fiscal spending, as an anti-recessionary tool, will likely lead to considerably more sovereign debt issuance, driving interest rates back into positive territory.
  • According to our estimates, many of the cheap stocks we find most compelling have a recession (trade war, disorderly Brexit, etc.) already discounted in their share prices. Faced with an actual recession, we believe share prices for these cheap cyclical stocks with superior financial strength will likely start to anticipate and discount a subsequent economic recovery.

Portfolio attribution

Causeway Global Value Fund ("Fund") underperformed the Index during the month, due primarily to stock selection. Fund holdings in the software & services, insurance, energy, media & entertainment, and technology hardware & equipment industry groups detracted from relative performance. Holdings in the pharmaceuticals & biotechnology, utilities, materials, and health care equipment & services industry groups, as well as an overweight position in the telecommunication services industry group, contributed to relative performance. The largest detractor was enterprise infrastructure software company, Micro Focus International Plc (United Kingdom). Additional notable detractors included life insurer, Prudential Plc (United Kingdom), energy exploration & production company, Halliburton Co. (United States), design-to-distribution business process services technology company, SYNNEX Corp. (United States), and global entertainment content company, Viacom, Inc. (United States). The top contributor to return was pharmaceuticals & chemicals company, Bayer AG (Germany). Other notable contributors included defense & information technology services provider, Leidos Holdings, Inc. (United States), pharmaceutical company, AstraZeneca Plc (United Kingdom), integrated utility, FirstEnergy Corp. (United States), and utilities provider, SSE Plc (United Kingdom).

Investment outlook

August market performance indicates overwhelming risk aversion as investors (or market trading software programs) have crowded their buying into supposed growth and economically defensive stocks, especially those poised to benefit from ever-falling interest rates (real estate and utilities, for example). US stocks and the US dollar have attracted global capital flows, pushing the US equity market valuation premium relative to MSCI EAFE markets to a 20-year high. The selling pressure on economically cyclical stocks has placed what we believe is a fundamentally unjustifiable valuation discount on economic risk. According to our estimates, many of the cheap stocks we find most compelling have a recession (trade war, disorderly Brexit, etc.) already discounted in their share prices. Faced with an actual recession, we believe share prices for these cheap cyclical stocks with superior financial strength will likely start to anticipate and discount a subsequent economic recovery. From a risk factor perspective, the earnings yield spread (top minus bottom quintile) for value and cyclicality factors in both MSCI EAFE and MSCI ACWI markets has eclipsed all historical levels except for the 2008 GFC. Using earnings yield spreads in MSCI ACWI markets, growth factor “expensiveness” has surpassed historical levels, except during the late 1990s TMT bubble (technology-media-telecoms). We are a disciplined value manager and seek high quality managements able and willing to implement operational restructuring to enhance profitability and free cash flow.

Effective October 1, 2018, the Global Value Fund’s benchmark changed from the MSCI World Index (Gross) to the MSCI ACWI Index (Gross). Causeway believes that the MSCI ACWI Index (Gross), which includes emerging as well as developed markets, better represents the types of securities in which the strategy invests. 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. A company may reduce or eliminate its dividend, causing losses to a fund. 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

DividendsShort-term capital gainsLong-term capital gains
2018$0.1956$0.2508$1.2062
2017$0.2363$0.4167$0.1330
2016$0.1493$0.0000$0.0000
2015$0.1251$0.0000$0.2089
2014$0.2232$0.3781$0.5989
2013$0.1162$0.2969$0.1573
2012$0.0968$0.0094$0.0380
2011$0.0959$0.0000$0.0000
2010$0.0800$0.0000$0.0000
2009$0.0793$0.0000$0.0000
2008$0.1306$0.0500$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: