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*
+1.74%
Nav*
$15.24, -0.18
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
1.02%
*As of January 21, 2022
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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 -0.1%6.6%6.6%11.0%7.7%7.0%5.8%
MSCI ACWI ex US 1.9%8.3%8.3%13.7%10.1%7.8%6.1%
QTD YTD 1 year3 years5 years10 years Since inception
Fund -0.1%6.6%6.6%11.0%7.7%7.0%5.8%
MSCI ACWI ex US 1.9%8.3%8.3%13.7%10.1%7.8%6.1%
QTD YTD 1 year3 years5 years10 years Since inception
Fund -0.1%6.6%6.6%11.0%7.7%7.0%5.8%
MSCI ACWI ex US 1.9%8.3%8.3%13.7%10.1%7.8%6.1%
QTD YTD 1 year3 years5 years10 years Since inception
Fund -0.1%6.6%6.6%11.0%7.7%7.0%5.8%
MSCI ACWI ex US 1.9%8.3%8.3%13.7%10.1%7.8%6.1%
202120202019201820172016201520142013201220112010
Fund 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 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
202120202019201820172016201520142013201220112010
6.6%5.4%21.7%-18.4%29.6%2.0%-6.1%-3.7%17.8%24.6%-12.6%15.4%
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 December 31, 2021)

Benchmark: MSCI ACWI ex US
Asset Allocation
Fund
Stocks 99.0%
Cash 1.0%
Fund Characteristics
Fund Benchmark
No. of holdings 165 2338
Weighted avg. market cap (US $MM) $81,361 $77,637
FY2 price/earnings 10.5 13.8
Price/book value 1.5 1.9
Net assets $268,316,080 -
TOP 10 HOLDINGS
Security Country Percent
Rolls-Royce Holdings Plc United Kingdom 3.2
UniCredit S.p.A. Italy 3.0
FANUC Corp. Japan 2.8
TotalEnergies SE France 2.5
BP Plc United Kingdom 2.5
Novartis AG Switzerland 2.4
Sanofi France 2.4
Amadeus IT Group SA Spain 2.4
SAP SE Germany 2.4
Taiwan Semiconductor Manufacturing Co., Ltd. - ADR Taiwan 2.2

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 20.5% 19.2%
Industrials 16.5% 12.6%
Information Technology 14.3% 13.6%
Health Care 12.1% 9.4%
Energy 8.8% 4.8%
Consumer Discretionary 7.6% 12.1%
Consumer Staples 6.9% 8.6%
Materials 6.5% 8.1%
Utilities 3.5% 3.1%
Communication Services 2.1% 6.1%
Real Estate 0.0% 2.4%
TOP 10 COUNTRIES
Country Fund Benchmark
United Kingdom 18.6% 9.3%
France 12.8% 7.5%
Germany 9.1% 5.6%
China 8.1% 9.4%
Switzerland 8.1% 6.7%
Japan 7.0% 14.3%
Spain 5.7% 1.4%
Taiwan 5.7% 4.7%
Italy 4.9% 1.6%
South Korea 4.4% 3.7%
Regional Allocation
  • Europe – other 62.8%
  • Emerging Asia 22.6%
  • Pacific 7.0%
  • Emerging Europe, Middle East, Africa 2.7%
  • Emerging Latin America 2.2%
  • North America 1.7%

Commentary (As of December 31, 2021)

Highlights

  • Global equities rallied in December, capping off the third consecutive calendar year of strong positive returns.
  • Concurrent with the easing of Covid-related restrictions, we anticipate the pressures from tangled supply chains and tight labor markets to lessen in 2022. As developed market central banks attempt to combat inflationary trends stoked by supply bottlenecks and massive amounts of stimulus, we await gradual increases in policy rates in most regions.
  • As borders reopen, we anticipate pent-up demand from consumers to translate into revenue recovery for companies in aerospace, aviation, travel, and leisure-related industries. In our view, some of the best positioned companies in these industries operate in oligopolies with management teams who have used the pandemic crisis to meaningfully cut costs. We expect this to result in high levels of profitability as revenues recover.

Portfolio Attribution

The Causeway International Opportunities Fund (“Fund”) outperformed the Index during the month, due primarily to stock selection. Fund holdings in the banks, software & services, pharmaceuticals & biotechnology, and automobiles & components industry groups, as well as an underweight position in the retailing industry group, contributed to performance relative to the Index. Holdings in the diversified financials, utilities, consumer durables & apparel, household & personal products, and food beverage & tobacco industry groups offset a portion of the outperformance. The top contributor to return was banking & financial services company, UniCredit S.p.A. (Italy). Additional top contributors included integrated oil & gas company, TotalEnergies SE (France), pharmaceutical producer, Novartis AG (Switzerland), business software & services provider, SAP SE (Germany), and robotics manufacturer, FANUC Corp. (Japan). The largest detractor from absolute performance was e-commerce company, JD.com Inc (China). Additional detractors included internet comer company, Alibaba Group Holding (China), biologics technology platform, Wuxi Biologics (Cayman), Inc. (China), lithium compound producer, Ganfeng Lithium Co., Ltd. (China), and battery manufacturer, Contemporary Amperex Tech Co., Ltd. (China).

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 negative, and our macroeconomic factor is negative for emerging markets. Lastly, our risk aversion factor is neutral in our model.

Investment Outlook

With policymakers on track to tighten monetary conditions, we expect a compression of the highest valuation multiples for speculative growth stocks. The sobering effect on equity markets as liquidity is removed should favor a valuation-based investing approach. As borders reopen, we anticipate this pent-up demand from consumers to translate into revenue recovery for developed market companies in aerospace, aviation, travel, and leisure-related industries. In our view, some of the best positioned companies in these industries operate in oligopolies with management teams who have used the pandemic crisis to meaningfully cut costs. We expect this to result in high profitability as revenues return to pre-Covid era levels. Certain well-established laggards in the Chinese market may also provide competitive upside after a year of very poor performance. Fiscal and monetary stimulus in China may create a favorable climate for the, in our view, best-managed, best-capitalized Chinese companies with strong competitive moats. In all regions, we are most interested in those undergoing operational restructuring; from a fundamental perspective, we routinely push management teams to focus on self-help to improve free cash flow generation and reward shareholders. Longer term, we believe one of the most enduring investment themes over the next several years will be decarbonization and climate amelioration. We believe companies in traditionally carbon-intensive industries that demonstrate the wherewithal to transition their operations to low or zero greenhouse gas emissions, without sacrificing returns, stand to benefit most from increased investor attention. Finally, while we expect some normalization of interest rates, we continue to emphasize companies rewarding shareholders via dividends and share buybacks. Though government bond yields may increase from current levels, capital returned to shareholders via dividends and share buybacks remain the most certain portion of total return.

Within the EM portion of the Fund, EM sectors with the strongest earnings upgrades were energy, information technology, and financials. All three cyclical sectors reflect analyst optimism that global growth will continue to improve. Real estate, consumer discretionary, and communication services experienced the weakest net upgrades. While we incorporate growth expectations into our multi-factor investor process, we continue to emphasize valuation in our approach. The risk of economic shutdowns due to new Covid-19 variants remains a risk to value stocks; however, a rising rate environment should provide a tailwind for value if global growth remains steady. Offering substantial price discounts relative to history and attractive dividend yields, we believe EM value stocks provide compelling risk-adjusted return potential.

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
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: