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*
+20.22%
Nav*
$13.91, +0.18
Inception
December 31, 2009
Cusip
14949Q107
Benchmark
MSCI ACWI ex US
Minimum Investment
$1,000,000
Sales Charge
None
Total Expense Ratio
1.05%
*As of December 13, 2019

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
Fundamental Portfolio Manager
Head of Quantitative Research
Quantitative Portfolio Manager
Quantitative Portfolio Manager
Quantitative Portfolio Manager
Fundamental Portfolio Manager

Performance

QTDYTD1 year3 years5 yearsSince inception
Fund6.9%16.5%10.0%8.1%2.5%5.4%
MSCI ACWI ex US4.4%17.0%11.8%9.8%4.3%5.0%
QTDYTD1 year3 years5 yearsSince inception
Fund6.9%16.5%10.0%8.1%2.5%5.4%
MSCI ACWI ex US4.4%17.0%11.8%9.8%4.3%5.0%
QTDYTD1 year3 years5 yearsSince inception
Fund-2.4%9.0%-5.4%4.9%1.2%4.8%
MSCI ACWI ex US-1.7%12.1%-0.7%6.8%3.4%4.7%
QTDYTD1 year3 years5 yearsSince inception
Fund-2.4%9.0%-5.4%4.9%1.2%4.8%
MSCI ACWI ex US-1.7%12.1%-0.7%6.8%3.4%4.7%
201820172016201520142013201220112010
Fund-18.4%29.6%2.0%-6.1%-3.7%17.8%24.6%-12.6%15.4%
MSCI ACWI ex US-13.8%27.8%5.0%-5.3%-3.4%15.8%17.4%-13.3%11.6%
Fund
MSCI ACWI ex US
201820172016201520142013201220112010
-18.4%29.6%2.0%-6.1%-3.7%17.8%24.6%-12.6%15.4%
-13.8%27.8%5.0%-5.3%-3.4%15.8%17.4%-13.3%11.6%

Portfolio (as of November 30, 2019)

Benchmark: MSCI ACWI ex US
Asset Allocation
Fund
Stocks96.6%
Cash3.4%
Fund Characteristics
FundBenchmark
No. of holdings 201 2419
Weighted avg. market cap (US $MM)$60,337$54,906
FY2 price/earnings10.713.6
Price/book value1.31.7
Net assets$212,560,948-
TOP 10 HOLDINGS
Security Country Percent
Volkswagen AGGermany3.6
Takeda Pharmaceutical Co., Ltd.Japan3.4
BASF SEGermany3.0
UniCredit S.p.A.Italy2.9
FANUC Corp.Japan2.5
Siemens AGGermany2.4
British American Tobacco plcUnited Kingdom2.3
Barclays PlcUnited Kingdom2.3
ABB Ltd.Switzerland2.2
Linde PlcGermany2.0

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
Financials22.3%21.4%
Industrials16.6%12.1%
Health Care9.7%8.9%
Information Technology9.2%9.2%
Materials8.9%7.3%
Energy8.5%6.4%
Consumer Discretionary7.4%11.8%
Consumer Staples6.3%9.6%
Communication Services5.5%6.6%
Utilities1.5%3.4%
Real Estate0.8%3.2%
TOP 10 COUNTRIES
Country Fund Benchmark
United Kingdom22.0%10.8%
Germany16.1%5.8%
Japan11.7%16.5%
China8.9%9.1%
France6.1%7.6%
Switzerland5.6%6.1%
Taiwan3.8%3.1%
South Korea3.4%3.1%
Italy2.9%1.6%
Brazil2.6%1.9%
Regional Allocation
  • Europe – other 57.2%
  • Emerging Asia 19.3%
  • Pacific 11.7%
  • North America 2.4%
  • Emerging Latin America 3.1%
  • Emerging Europe, Middle East, Africa 2.8%

Commentary (As of November 30, 2019)

Highlights

  • Developed market equities largely continued to rally in November as suggestions of a potential trade deal between the US and China may have buoyed investor sentiment. Emerging markets (“EM”) equities, however, posted muted returns in November amid slowing growth in many EM countries.
  • New European Central Bank President Christine Lagarde has addressed geopolitical risks in recent speeches and indicated steps governments can take to boost the effectiveness of monetary policy. We believe fiscal stimulus is the logical next step for European economies, with low-to-no borrowing costs and aging populations struggling to save sufficiently for retirement.
  • Without the specter of major economic slowing to weigh on revenue growth, cyclical stocks have fared well from late summer. We focus our research efforts on companies improving free cash flows and returning capital to shareholders via dividends and share buybacks, paying shareholders to wait for enhanced earnings from operational restructuring.

Portfolio attribution

Causeway International Opportunities Fund (“Fund”) outperformed the Index during the month, due primarily to stock selection. Fund holdings in the banks, food beverage & tobacco, pharmaceuticals & biotechnology, transportation, and real estate industry groups contributed to performance compared to the Index. Holdings in the energy, technology hardware & equipment, and food & staples retailing industry groups, along with an underweight position in the health care equipment & services and media & entertainment industry groups, detracted from relative performance. The top contributor to return was Takeda Pharmaceutical Co., Ltd. (Japan). Other notable contributors included British American Tobacco Plc (United Kingdom), banking & financial services company, UniCredit S.p.A. (Italy), industrial conglomerate, Siemens AG (Germany), and internet internet commerce company, Alibaba Group Holding – ADR (China). The largest detractor was robotics manufacturer, FANUC Corp. (Japan). Additional notable detractors included specialty chemicals producer, Johnson Matthey Plc (United Kingdom), insurance company, Aviva Plc (United Kingdom), diversified chemicals manufacturer, BASF SE (Germany), and pharmaceuticals & chemicals company, Bayer AG (Germany).

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 factor is positive, while our macroeconomic factor is negative for emerging markets. Lastly, our risk aversion factor is negative in our model.

Investment outlook

Since the end of August 2019, the portfolio has generally enjoyed a re-rating upward in valuation coincident with the upswing in global sovereign bond yields from their 2019 lows. This change in sentiment by bond markets indicates a waning demand for risk-free bonds. With central governments globally using monetary and fiscal tools to forestall recession (and economic cycles), bond prices have fallen and yields have risen. Without the specter of major economic slowing to weigh on revenue growth, cyclical stocks have fared well from late summer. We focus our research efforts on companies improving free cash flows and returning capital to shareholders via dividends and share buybacks, paying shareholders to wait for enhanced earnings from operational restructuring. As investors continue to crowd into defensive trades, we strive to identify companies that can execute on restructuring plans and position themselves for an improvement in performance.

The MSCI Emerging Markets Value Index underperformed the MSCI Emerging Markets Growth Index by 1.1% in November, further widening the discount for EM value stocks. In contrast, our value factor was positive during the month. This disconnect is primarily attributable to two factors. First, the strong performance of a few large cap growth stocks buoyed the Growth Index. While the Index is capitalization-weighted, we use equally-weighted returns for our value factor in order to avoid assigning a handful of stocks a disproportionate weight. Secondly, our value factor has a sector-relative component while MSCI’s style classification schemes do not include sector adjustments.

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

DividendsShort-term capital gainsLong-term capital gains
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: