Combining our time-tested abilities in developed and emerging international markets

The Fund invests primarily in companies both in developed markets excluding the United States (the “international value portfolio”) and in emerging markets (the “emerging markets portfolio”). Causeway allocates substantially all of the Fund’s assets between the international value portfolio and the emerging markets portfolio using a proprietary asset allocation model.

International Value Portfolio: The international value portfolio consists primarily of common stocks of companies located in developed countries outside the US. Normally, the majority of this portfolio invests in companies that pay dividends or repurchase their shares. The international value portfolio may also invest in companies located in emerging (less developed) markets.

Emerging Markets Portfolio: The emerging markets portfolio is normally invested 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 that invest in emerging markets securities.

YTD Return*
+17.21%
Nav*
$15.19, +0.13
Inception
December 31, 2009
Cusip
14949Q107
Benchmark
MSCI ACWI ex US
Minimum Investment
$1,000,000
Sales Charge
None
Net Expense Ratio
0.98%
Gross Expense Ratio
1.00%
*As of September 11, 2023
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Strategy overview

The portfolio managers discuss our International Opportunities strategy.

Portfolio managers

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

Performance

QTD YTD 1 year3 years5 years10 years Since inception
Fund 1.0%18.2%27.3%9.9%4.7%4.7%5.5%
MSCI ACWI ex US -0.6%9.2%12.5%4.5%3.8%4.9%4.7%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 1.0%18.2%27.3%9.9%4.7%4.7%5.5%
MSCI ACWI ex US -0.6%9.2%12.5%4.5%3.8%4.9%4.7%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 4.7%17.1%23.4%12.1%4.3%4.9%5.5%
MSCI ACWI ex US 2.7%9.9%13.3%7.7%4.0%5.2%4.9%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 4.7%17.1%23.4%12.1%4.3%4.9%5.5%
MSCI ACWI ex US 2.7%9.9%13.3%7.7%4.0%5.2%4.9%
2022202120202019201820172016201520142013201220112010
Fund -11.1%6.6%5.4%21.7%-18.4%29.6%2.0%-6.1%-3.7%17.8%24.6%-12.6%15.4%
MSCI ACWI ex US -15.6%8.3%11.1%22.1%-13.8%27.8%5.0%-5.3%-3.4%15.8%17.4%-13.3%11.6%
Fund
MSCI ACWI ex US
2022202120202019201820172016201520142013201220112010
-11.1%6.6%5.4%21.7%-18.4%29.6%2.0%-6.1%-3.7%17.8%24.6%-12.6%15.4%
-15.6%8.3%11.1%22.1%-13.8%27.8%5.0%-5.3%-3.4%15.8%17.4%-13.3%11.6%

Portfolio (as of August 31, 2023)

Benchmark: MSCI ACWI ex US
Asset Allocation
Fund
Stocks 99.1%
Cash 0.9%
Fund Characteristics
Fund Benchmark
No. of holdings 238 2306
Weighted avg. market cap (US $MM) $63,542 $69,576
FY2 price/earnings 9.7 12.1
Price/book value 1.5 1.7
Net assets $206,221,403 -
TOP 10 HOLDINGS
Security Country Percent
Rolls-Royce Holdings Plc United Kingdom 5.2
UniCredit S.p.A. Italy 2.6
Enel SpA Italy 2.4
BP Plc United Kingdom 2.4
SAP SE Germany 2.3
Roche Holding AG Switzerland 2.2
Reckitt Benckiser Group United Kingdom 2.2
Danone France 2.0
Prudential Plc United Kingdom 1.9
Barclays PLC United Kingdom 1.9

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
Financials 19.2% 20.7%
Industrials 16.7% 13.2%
Health Care 12.4% 9.7%
Consumer Staples 12.2% 8.6%
Information Technology 9.5% 11.6%
Consumer Discretionary 8.1% 12.1%
Energy 6.1% 5.7%
Materials 5.3% 7.8%
Utilities 5.0% 3.1%
Communication Services 4.1% 5.4%
Real Estate 0.4% 2.1%
TOP 10 COUNTRIES
Country Fund Benchmark
United Kingdom 28.0% 9.5%
France 10.9% 8.0%
China 7.9% 8.3%
Germany 7.6% 5.5%
Italy 5.0% 1.7%
Japan 5.0% 14.7%
Switzerland 4.7% 6.6%
Taiwan 4.6% 4.2%
Netherlands 4.5% 2.8%
India 4.3% 4.1%
Regional Allocation
  • Europe – other 66.1%
  • Emerging Asia 21.5%
  • Pacific 5.6%
  • Emerging Latin America 2.1%
  • Emerging Europe, Middle East, Africa 2.0%
  • North America 1.8%

Commentary (As of August 31, 2023)

Highlights

  • Global equity markets paused their rally in August, dipping slightly lower for the month. Expectations of a higher-for-longer interest rate environment and apprehensions surrounding China's slowing economy tempered market enthusiasm.
  • We believe enthusiasm for artificial intelligence-related applications has overwhelmed concerns about economic sensitivity. As technology garners most of the attention, we are looking at more unpopular areas of markets in the developed markets portion of the Fund. Our team aims to find investment opportunities in companies that can accelerate earnings and cash flows (“underearners”), largely independent of broad macroeconomic trends.
  • Within the emerging markets portion of the Fund, we aggregated two “top down” factors, country and sector, as part of our continuous effort to enhance our quantitative model. This country-sector aggregate factor combines country and sector analysis, recognizing that many sectors are locally-oriented and may not be comparable across countries, while other sectors are global in nature.

Portfolio Attribution

The Causeway International Opportunities Fund (“Fund”) outperformed the Index during the month. Over the month, Fund holdings in the capital goods, health care equipment & services, and banks industry groups contributed to relative performance. Holdings in the pharmaceuticals & biotechnology, automobiles & components, and insurance industry groups detracted from relative performance. The greatest individual contributors to absolute returns were jet engine manufacturer, Rolls-Royce Holdings Plc (United Kingdom), healthcare equipment & services provider, Koninklijke Philips NV (Netherlands), and global investment bank, UBS Group AG (Switzerland). The largest individual detractors from absolute returns were Asian market life insurer, Prudential Plc (United Kingdom), rolling stock, signaling, & services provider for the rail industry, Alstom SA (France), and pharmaceuticals & biotechnology company, Roche Holding AG (Switzerland).

We use a proprietary quantitative equity allocation model that assists the portfolio managers in determining the weight of emerging versus developed markets in the Fund. Our allocation relative to the weight of emerging markets in the Index is currently underweight. We identify five primary factors as most indicative of the ideal allocation target: valuation, quality, earnings growth, macroeconomic, and risk aversion. Valuation is currently positive for emerging markets in our model. Our quality metrics, which include such measures as profit margins and return on equity, are negative. Our earnings growth, macroeconomic, and risk aversion factors are negative for emerging markets.

Economic outlook

Economic signals in developed economies are mixed. In August, US wages rose year-over-year and employers added jobs, yet the unemployment rate crept up to 3.8%. The core personal consumption expenditures price index rose 0.2% in July, the smallest uptick since late 2020, yet inflation-adjusted consumer spending experienced its greatest increase year-to-date. Euro area inflation for the year-to-date through August period was 5.3%, well exceeding the central bank's 2% policy target, although consumer price increases excluding energy and food cooled. Central bank officials must assess if slowing growth can sufficiently reduce inflation or if further rate hikes are warranted. We expect unemployment to rise in the US, UK, and Europe in the first half of 2024 as credit conditions tighten further. The Bank of Japan stated its economy may be reaching a turning point in its 25-year battle with deflation. Official measures showed Japanese demand outpacing supply for the first time in four years.

All eyes are on China as the world’s second-largest economy grapples with a slumping property sector and slowing real GDP growth. China is deploying measures to shore up its property market and address vulnerabilities in its financial system and currency, yet investors remain concerned about the repercussions of flagging Chinese activity on the greater global economy. The Fund is underweight Chinese equities due to the underweight allocation to emerging markets, which is largely due to weak earnings estimate revisions for emerging markets, of which China is by far the largest equity market. While almost all sectors in China are trading at significant discounts to their historic valuations, we currently are finding the most attractive opportunities in energy, industrials, financials, and interactive media companies. We are underweight companies in China’s real estate sector, a particularly vulnerable segment of the country’s economy.

Investment Outlook

In 2023, global equity markets have signaled economic slowing ahead via the underperformance of cyclical sectors such as financials, materials, and industrials. Yet economically defensive sectors such as utilities, consumer staples, and healthcare also have, uncharacteristically, underperformed. In contrast, information technology—in international and emerging markets as well as the tech-dominant US market—is the largest outperforming sector by a wide margin this year-to-date. We believe enthusiasm for artificial intelligence-related applications has overwhelmed concerns about economic sensitivity. As technology garners most of the attention, we are looking at more unpopular areas of markets in the developed markets portion of the Fund. Our team aims to find investment opportunities in companies that can accelerate earnings and cash flows (“underearners”), largely independent of broad macroeconomic trends. These include currently misunderstood and out-of-favor companies in industries such as insurance, chemicals, and consumer non-durables.

In an environment where expensive stocks may be increasingly vulnerable to de-rating, we believe the portfolio should be relatively resilient against valuation multiple compression. In the developed markets portion of the Fund, we generally use conservative assumptions in our stock valuation models, adhere to a multi-year investment horizon, and integrate in-house quantitative risk analysis into our portfolio construction process. Market volatility provides our portfolio management team an opportunity to add to vetted investment candidates at attractive entry points, supporting our efforts to generate competitive returns on behalf of our clients.

Within the emerging markets portion of the Fund, we aggregated two “top down” factors, country and sector, as part of our continuous effort to enhance our quantitative model. This country-sector aggregate factor combines country and sector analysis, recognizing that many sectors are locally-oriented and may not be comparable across countries, while other sectors are global in nature. For example, we believe comparing financials companies across countries has little predictive value as each country has its own central bank, interest rate dynamics, and macroeconomic drivers affecting the credit cycle. However, comparing energy or mining companies across different countries can be useful since these businesses tend to sell into a global marketplace. The country-sector aggregate factor has two components – self-relative valuation and earnings growth –and it has a 12.5% weight in the strategy’s alpha model.

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. Investing in ETFs is subject to the risks of the underlying funds. Investments in smaller companies typically exhibit higher volatility. Asset allocation may not protect against market risk. 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
2022 $0.3603 $0.0000 $0.0000
2021 $0.2400 $0.0000 $0.0000
2020 $0.1974 $0.0000 $0.0000
2019 $0.3502 $0.0000 $0.0327
2018 $0.2904 $0.0000 $0.0327
2017 $0.2145 $0.0000 $0.0000
2016 $0.4494 $0.0000 $0.0000
2015 $0.1623 $0.0107 $0.0199
2014 $0.0000 $0.0000 $0.4943
2013 $0.1266 $0.0001 $0.0739
2012 $0.2451 $0.0000 $0.0190
2011 $0.2756 $0.0000 $0.0303
2010 $0.1858 $0.0000 $0.1712

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: