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*
-14.49%
Nav*
$11.74, -0.04
Inception
December 31, 2009
Cusip
14949Q107
Benchmark
MSCI ACWI ex US
Minimum Investment
$1,000,000
Sales Charge
None
Net Expense Ratio
0.95%
Gross Expense Ratio
1.06
*As of September 22, 2020
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Strategy overview

The portfolio managers discuss our International Opportunities 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
Head of Quantitative Research
Quantitative Portfolio Manager
Quantitative Portfolio Manager
Quantitative Portfolio Manager
Fundamental Portfolio Manager

Performance

QTD YTD 1 year3 years5 years10 years Since inception
Fund 7.2%-10.9%3.4%-1.2%2.5%5.0%4.3%
MSCI ACWI ex US 9.0%-2.7%8.8%3.1%6.3%5.7%4.8%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 7.2%-10.9%3.4%-1.2%2.5%5.0%4.3%
MSCI ACWI ex US 9.0%-2.7%8.8%3.1%6.3%5.7%4.8%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 20.0%-16.9%-9.4%-2.2%-0.5%4.9%3.7%
MSCI ACWI ex US 16.3%-10.8%-4.4%1.6%2.7%5.5%4.0%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 20.0%-16.9%-9.4%-2.2%-0.5%4.9%3.7%
MSCI ACWI ex US 16.3%-10.8%-4.4%1.6%2.7%5.5%4.0%
2019201820172016201520142013201220112010
Fund 21.7%-18.4%29.6%2.0%-6.1%-3.7%17.8%24.6%-12.6%15.4%
MSCI ACWI ex US 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
2019201820172016201520142013201220112010
21.7%-18.4%29.6%2.0%-6.1%-3.7%17.8%24.6%-12.6%15.4%
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, 2020)

Benchmark: MSCI ACWI ex US
Asset Allocation
Fund
Stocks 98.1%
Cash 1.9%
Fund Characteristics
Fund Benchmark
No. of holdings 176 2367
Weighted avg. market cap (US $MM) $81,464 $78,228
FY2 price/earnings 11.6 14.9
Price/book value 1.2 1.6
Net assets $172,507,422 -
TOP 10 HOLDINGS
Security Country Percent
Volkswagen AG Germany 3.3
UniCredit S.p.A. Italy 2.9
BASF SE Germany 2.7
Alibaba Group Holding - ADR China 2.6
FANUC Corp. Japan 2.3
Tencent Holdings Ltd. China 2.3
Siemens AG Germany 2.2
ING Groep NV Netherlands 2.2
ABB Ltd. Switzerland 2.1
Taiwan Semiconductor Manufacturing Co., Ltd. - ADR Taiwan 2.0

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 21.4% 17.7%
Industrials 18.4% 11.6%
Consumer Discretionary 12.5% 13.5%
Information Technology 12.4% 11.3%
Materials 8.4% 7.9%
Health Care 8.1% 10.2%
Consumer Staples 6.4% 9.7%
Communication Services 4.6% 7.5%
Energy 3.9% 4.5%
Utilities 1.3% 3.4%
Real Estate 0.8% 2.8%
TOP 10 COUNTRIES
Country Fund Benchmark
Germany 15.7% 6.2%
China 12.9% 12.4%
United Kingdom 12.2% 8.8%
France 10.8% 7.0%
Switzerland 7.5% 6.6%
Japan 6.8% 16.1%
Taiwan 4.7% 3.6%
South Korea 4.5% 3.4%
Netherlands 4.1% 2.8%
Spain 3.7% 1.5%
Regional Allocation
  • Europe – other 60.4%
  • Emerging Asia 26.1%
  • Pacific 6.8%
  • Emerging Europe, Middle East, Africa 2.4%
  • Emerging Latin America 2.1%
  • North America 0.4%

Commentary (As of August 31, 2020)

Highlights

  • Global equity markets continued to rally in August, as improving economic data in some geographies combined with highly accommodative monetary policy globally and renewed optimism for a COVID-19 vaccine appeared to bolster investor sentiment. Developed markets equities outperformed emerging markets (“EM”) stocks during the month.
  • The Eurozone seasonally adjusted unemployment rate ticked up marginally in July (from 7.7% in June to 7.9%), suggesting that social safety nets and early action by fiscal authorities at the onset of the pandemic staved off major job losses. We believe this and other indicators are constructive for Europe’s economy to emerge from the pandemic-induced recession in a strong position.
  • Though our investment horizon remains long-term, heightened stock price volatility translates to prices moving faster in this market dislocation. Valuation matters. We remain disciplined on the price we are willing to pay for stocks in the fund that provide, in our view, the best risk-adjusted return potential.

Portfolio attribution

Causeway International Opportunities Fund (“Fund”) outperformed the Index during the month, due primarily to stock selection. Fund holdings in the transportation, banks, and materials industry groups, as well as an underweight position in the telecommunication services and utilities industry groups, contributed to performance relative to the Index. Holdings in the technology hardware & equipment, capital goods, and media & entertainment industry groups, along with an underweight position in the retailing and commercial & professional services industry groups, offset some of the outperformance versus the Index. The top contributor to return was automobile manufacturer, Volkswagen AG (Germany). Other notable contributors included internet commerce company, Alibaba Group Holding (China), financial services provider, ING Groep NV (Netherlands), diversified chemicals manufacturer, BASF SE (Germany), and mail, express & logistics services provider, Deutsche Post AG (Germany). The largest detractor from performance was e-commerce retailer, Vipshop Holdings (China). Additional notable detractors included electronic equipment manufacturer, Samsung Electronics Co., Ltd. (South Korea), semiconductor engineer, MediaTek, Inc. (Taiwan), electronic components manufacturer, Murata Manufacturing Co., Ltd.(Japan), and bank, BBVA SA (Spain).

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 overweight. We identify five primary factors as most indicative of the ideal allocation target: valuation, quality, earnings growth, macroeconomic, and risk aversion. Valuation is currently negative for emerging markets in our model. Our quality metrics, which include such measures as profit margins and return on equity, are positive. Our earnings growth factor is positive, while our macroeconomic factor is neutral for emerging markets. Lastly, our risk aversion factor is negative in our model.

Investment outlook

The COVID-19 pandemic continues to upend normal routines, and for longer than initially anticipated. Yet strong equity returns in August—notably in economically cyclical stocks—appeared to reflect investors’ exuberance for a potential COVID-19 vaccine. We are convinced that with a safe and widely available vaccine, many of the changed behaviors due to the virus will revert and provide a significant revenue boost to companies in the epicenter of COVID-19 restrictions, such as companies in the travel and leisure, aviation, and aerospace industries. We believe a vaccine (and in the meantime, effective therapies) could catalyze an unwinding of the massive premium afforded to growth stocks—particularly high-flying technology companies—that benefit from COVID-19 trends. Despite the prolonged market environment favoring growth stocks, we continue to identify companies that are taking advantage of the crisis to cut costs and improve efficiency. From a fundamental perspective, we remain focused on thoroughly assessing the balance sheet strength of our portfolio companies to ensure they can withstand the drop in revenues until the recovery firmly takes hold. Given the uncertainty on the timing of a viable COVID-19 vaccine, we recognize the diminished visibility on near-term earnings. We anticipate some of the greatest upside potential in companies in oligopolistic industry structures (offering pricing power) with strong moats against competition. Finally, though our investment horizon remains long-term, heightened stock price volatility translates to prices moving faster in this market dislocation. Valuation matters. We remain disciplined on the price we are willing to pay for stocks in the fund that provide, in our view, the best risk-adjusted return potential.

Uncertainty surrounding the COVID-19 pandemic has continued to weigh on EM value stocks. After underperforming again in August, the MSCI Emerging Markets Value Index has lagged the MSCI Emerging Markets Growth Index every month this year. Following a poor 2019, the MSCI Emerging Markets Value Index trails the MSCI Emerging Markets Growth Index by 27 percentage points on a local currency basis over the year-to-date period. The MSCI Emerging Markets Value Index is trading near historically wide discounts based on both price-to-earnings and price-to-book value ratios. We continue to emphasize value factors in our quantitative 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. A catalyst for value’s resurgence could be the dissemination of one or more COVID-19 vaccines, many of which are in Phase III trials.

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
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: