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%
Portfolio managers
Brian Woonhyung Cho
Mr. Cho is a fundamental portfolio manager at Causeway. He joined the firm in September 2013 and has been a portfolio manager since January 2021. His current responsibilities include coverage of companies in the technology and communication services sectors.
From 2011 to 2013, Mr. Cho was a vice president at BofA-ML Equity Research, covering the IT hardware and supply chain sector. From 2007 to 2011, he worked as an associate at Goldman Sachs Equity Research covering the same sector. From 2006 to 2007, he worked as an analyst at Morgan Stanley Equity Research covering the internet and interactive software sector. Prior to that, he worked as an analyst at PA Consulting Group in the financial services practice.
Mr. Cho earned a BSc in management science from Massachusetts Institute of Technology.
Read our interview with Brian about value investing in the technology sector.
Jonathan Eng
Mr. Eng is a director and fundamental portfolio manager at Causeway and is responsible for investment research in the global consumer discretionary, industrials, and energy sectors. He joined the firm in July 2001 and has been a portfolio manager since February 2002.
From 1997 to 2001, Mr. Eng was an equity research associate for the Hotchkis and Wiley division of Merrill Lynch Investment Managers (HW-MLIM). In 1996, Mr. Eng worked as a summer research associate for Hotchkis and Wiley, performing U.K. and European equity research. From 1993 to 1995, Mr. Eng analyzed merger and acquisition candidates at Slusser Associates. From 1990 to 1993, Mr. Eng worked as a middle market corporate lender for Bank of Boston.
Mr. Eng earned a BA in history and economics from Brandeis University and an MBA from the UCLA Anderson Graduate School of Management
Joe Gubler, CFA
Mr. Gubler is a quantitative portfolio manager at Causeway. He joined the firm in 2005 and has been a portfolio manager since January 2014. In addition to managing quantitative portfolios and conducting alpha research, Mr. Gubler also leads the efforts to maintain and enhance Causeway’s proprietary risk models. He is also a member of the operating committee.
From 1999 to 2005, Mr. Gubler worked as a software engineer, with employers ranging from startups to established businesses such as Monster.com. From 1998 to 1999, Mr. Gubler worked as a staff scientist for News Corporation, conducting studies on the RF propagation of broadcast signals. While studying astrophysics at UC San Diego, Mr. Gubler worked as a graduate research assistant in the Jet Propulsion Laboratory's stellar interferometry group.
Mr. Gubler earned a BS, cum laude, in physics from UC Irvine, an MS in physics from UC San Diego, and an MBA from the UCLA Anderson Graduate School of Management. Mr. Gubler is a CFA charterholder.
Harry Hartford
Head of Fundamental Research
Fundamental Portfolio Manager
Mr. Hartford is the president at Causeway, fundamental portfolio manager, and head of fundamental research. Mr. Hartford co-founded the firm in June 2001 and is a member of the operating committee.
From 1996 to June 2001, Mr. Hartford was a managing director for the Hotchkis & Wiley division of Merrill Lynch Investment Managers (HW-MLIM) and co-head of the firm's HW-MLIM international and global value team. From 1994 to 1996, Mr. Hartford was a portfolio manager for Hotchkis and Wiley. From 1984 to 1994, Mr. Hartford was with The Investment Bank of Ireland, where he gained ten years’ experience in both international and global equity management. During this time, Mr. Hartford also managed the Irish Investment Fund, a closed-end country fund quoted on the NYSE. Before entering the investment business, Mr. Hartford lectured in micro and macroeconomics at Oklahoma State University.
Mr. Hartford earned a BA, with honors, in economics from the University of Dublin, Trinity College, an MSc in economics from Oklahoma State University, and is a Phi Kappa Phi member. Mr. Hartford is a member of The Ireland Funds America Board of Directors.
Arjun Jayaraman, PhD, CFA
Quantitative Portfolio Manager
Dr. Jayaraman is a director, quantitative portfolio manager and head of the quantitative research at Causeway and has been with the firm since January 2006. Dr. Jayaraman’s responsibilities and research include stock selection, asset allocation, risk model development, and portfolio construction.
From 2004 to 2005, Dr. Jayaraman was a portfolio manager at PanAgora Asset Management. He was the lead portfolio manager on the non-U.S. large cap core equity portfolios and was the co-portfolio manager on the global large cap core equity portfolios. From 2000 to 2004, Dr. Jayaraman managed the same portfolios at Putnam Investments, in addition to working closely with the teams that managed Putnam's traditional non-U.S. strategies. From 1998 to 2000, Dr. Jayaraman worked as a quantitative analyst at Harborview Trading Associates.
Dr. Jayaraman earned a PhD from New York University at the Stern School of Business and a BA in economics from Columbia University. Dr. Jayaraman is a CFA charterholder.
MacDuff Kuhnert, CFA
Mr. Kuhnert is a director and a quantitative portfolio manager at Causeway and has been with the firm since its inception in June 2001. Mr. Kuhnert’s responsibilities and research include stock selection, asset allocation, risk model development, and portfolio construction.
From 1996 to 2001, Mr. Kuhnert worked for the international team of the Hotchkis & Wiley division of Merrill Lynch Investment Managers (HW-MLIM) as a quantitative research associate. During his tenure at HW-MLIM, Mr. Kuhnert created and developed advanced quantitative models used in the international value investment process. He also helped develop the team’s first equity risk model.
Mr. Kuhnert earned a BA in chemistry from Dartmouth College. He is a CFA charterholder, a member of the CFA Society of Los Angeles, and a member of the Chicago Quantitative Alliance.
Sarah Ketterer
Fundamental Portfolio Manager
Ms. Ketterer is the chief executive officer at Causeway, fundamental portfolio manager, and is responsible for investment research across all sectors. Ms. Ketterer co-founded the firm in June 2001 and is a member of the operating committee.
From 1996 to 2001, Ms. Ketterer worked for the Hotchkis & Wiley division of Merrill Lynch Investment Managers (HW-MLIM). At HW-MLIM, she was a managing director and co-head of the firm's HW-MLIM International and Global Value team. From 1990 to 1996, Ms. Ketterer was a portfolio manager at Hotchkis & Wiley, where she founded the International Equity product.
Ms. Ketterer earned a BA in economics and political science from Stanford University and an MBA from the Tuck School, Dartmouth College. Ms. Ketterer serves on the Stanford University Board of Trustees, is a member of UT Southwestern President’s Advisory Board, is on the advisory board of Portal Schools, and is a supporter of Girls Who Invest. She previously served as a board member and chair of the Los Angeles World Affairs Council and Town Hall and chair of the investment committee of the Music Center Foundation.
Ellen Lee
Ms. Lee is a director and fundamental portfolio manager at Causeway and is responsible for investment research in the global consumer and utilities sectors. Prior to the current role, she also covered transportation and autos. She joined the firm in August 2007 and has been a portfolio manager since January 2015.
During the summer of 2006, Ms. Lee interned at Tiger Asia, a long short equity hedge fund focused on China, Japan, and Korea. From 2001 to 2004, Ms. Lee was an associate in the mergers and acquisitions division of Credit Suisse First Boston in Seoul, where she advised Korean corporates and multinational corporations. From 1999 to 2000, she was an analyst in the mergers and acquisitions division of Credit Suisse First Boston in Hong Kong.
Ms. Lee earned a BA in business administration from Seoul National University and an MBA from the Stanford Graduate School of Business. She currently serves on the audit and investment committee at the Center for Early Education in West Hollywood.
Read our profile of Ellen .
Conor Muldoon, CFA
Mr. Muldoon is a director and fundamental portfolio manager at Causeway and is responsible for investment research in the global financials and materials sectors. He joined the firm in August 2003 and has been a portfolio manager since September 2010. He is also a member of the operating committee.
From 1995 to 2003, Mr. Muldoon was an investment consultant for Fidelity Investments where he served as a liaison between institutional clients and investment managers within Fidelity. He was responsible for communicating current information on the financial markets, the economy and investment performance.
Mr. Muldoon earned a BSc and an MA from the University of Dublin, Trinity College and an MBA, with high honors, from the University of Chicago. Mr. Muldoon was inducted into the Beta Gamma Sigma honors society and is also a CFA charterholder.
Ryan Myers
Mr. Myers is a quantitative portfolio manager at Causeway. He joined the firm in June 2013 and has been a portfolio manager since January 2021. His responsibilities include alpha research, stock selection, and portfolio construction.
From 2010 to 2012, Mr. Myers served as chief investment officer of Iron Castle Asset Management, an investment partnership focused on mid-cap U.S. equities. From 2007 to 2008, Mr. Myers worked as an analyst at Canyon Partners, where he covered the cable, media, telecom and satellite sectors. From 2005 to 2007, Mr. Myers was an associate for Oaktree Capital Management in the distressed opportunities group. Mr. Myers began his professional career in 2003 as an investment banking analyst at Goldman Sachs in the technology, media and telecom group.
Mr. Myers earned a BA, magna cum laude, in economics from Harvard University, where he was elected to Phi Beta Kappa. He earned an MBA from the Stanford Graduate School of Business, where he was an Arjay Miller Scholar. Mr. Myers currently serves on the Board of Trustees of the Yosemite Conservancy, an organization dedicated to supporting projects and programs that preserve Yosemite National Park and enrich the visitor experience.
Steven Nguyen, CFA
Mr. Nguyen is a director and fundamental portfolio manager at Causeway and is responsible for investment research in utilities & renewables, healthcare, and business services. He joined the firm in April 2012 and has been a portfolio manager since January 2019.
From 2006 to 2012, Mr. Nguyen was a senior credit analyst at Bradford & Marzec covering high yield and investment grade companies in the telecommunication services, cable, media, gaming, insurance, and REIT industries. From 2003 to 2006, Mr. Nguyen was a credit analyst/portfolio manager in the corporate bond department of Allegiance Capital.
Mr. Nguyen earned a BA in business economics from Brown University and an MBA, with honors, from the UCLA Anderson School of Management. Mr. Nguyen was the president of the Anderson Student Asset Management association. Mr. Nguyen is a CFA charterholder and has completed the CFA Institute Certificate in ESG Investing program.
Alessandro Valentini, CFA
Mr. Valentini is a director and fundamental portfolio manager at Causeway and is responsible for investment research in the global healthcare, financials, and real estate sectors. He joined the firm in July 2006 and has been a portfolio manager since April 2013.
During the summer of 2005, Mr. Valentini worked as a research analyst at Thornburg Investment Management, where he conducted fundamental research for the International Value Fund and the Value Fund, focusing on the European telecommunication and Canadian oil sectors. From 2000 to 2004, Mr. Valentini worked as a financial analyst at Goldman Sachs in the European equities research-sales division in New York.
Mr. Valentini earned an MBA from Columbia Business School, with honors, an MA in economics from Georgetown University and a BS, magna cum laude, from Georgetown University. Mr. Valentini was inducted into the Beta Gamma Sigma honors society, is a Phi Beta Kappa member, and is a CFA charterholder.
Performance
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth less than their original cost and current performance may be lower than the performance quoted. Returns greater than one year are average annual total returns. Total returns assume reinvestment of dividends and capital gains distributions at net asset value when paid. All information is as of the date shown. Investment performance reflects fee waivers. In the absence of such fee waivers, total return would be reduced. *Gross expenses before investment adviser fee waivers are 0.99% for Institutional Class shares and 1.24% for Investor Class shares. The waivers are contractual and in effect until 1/31/24. Investor Class shares charge up to a 0.25% annual shareholder service fee.
Portfolio (as of August 31, 2023)
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%
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:
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Commentary (As of August 31, 2023)
Highlights
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.