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*
+6.42%
Nav*
$15.09, +0.03
Inception
December 31, 2009
Cusip
14949Q206
Benchmark
MSCI ACWI ex US
Minimum Investment
$5,000
Sales Charge
None
Net Expense Ratio
1.20%
Gross Expense Ratio
1.27%
*As of February 23, 2021
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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 -1.1%-1.1%10.2%-0.6%7.6%4.1%5.4%
MSCI ACWI ex US 0.2%0.2%14.4%3.6%11.0%5.3%5.9%
QTD YTD 1 year3 years5 years10 years Since inception
Fund -1.1%-1.1%10.2%-0.6%7.6%4.1%5.4%
MSCI ACWI ex US 0.2%0.2%14.4%3.6%11.0%5.3%5.9%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 23.3%5.2%5.2%1.3%6.5%4.6%5.5%
MSCI ACWI ex US 17.1%11.1%11.1%5.4%9.4%5.4%5.9%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 23.3%5.2%5.2%1.3%6.5%4.6%5.5%
MSCI ACWI ex US 17.1%11.1%11.1%5.4%9.4%5.4%5.9%
20202019201820172016201520142013201220112010
Fund 5.2%21.4%-18.6%29.4%1.7%-6.3%-4.0%17.5%24.4%-12.8%15.1%
MSCI ACWI ex US 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
20202019201820172016201520142013201220112010
5.2%21.4%-18.6%29.4%1.7%-6.3%-4.0%17.5%24.4%-12.8%15.1%
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 January 31, 2021)

Benchmark: MSCI ACWI ex US
Asset Allocation
Fund
Stocks 98.3%
Cash 1.7%
Fund Characteristics
Fund Benchmark
No. of holdings 164 2341
Weighted avg. market cap (US $MM) $96,295 $85,410
FY2 price/earnings 12.1 15.7
Price/book value 1.4 1.9
Net assets $15,607,217 -
TOP 10 HOLDINGS
Security Country Percent
Volkswagen AG Germany 3.3
Tencent Holdings Ltd. China 2.8
Taiwan Semiconductor Manufacturing Co., Ltd. - ADR Taiwan 2.6
BASF SE Germany 2.4
Rolls-Royce Holdings Plc United Kingdom 2.3
Samsung Electronics Co., Ltd. South Korea 2.2
UniCredit S.p.A. Italy 2.2
Takeda Pharmaceutical Co., Ltd. Japan 2.2
Novartis AG Switzerland 2.1
Siemens AG Germany 2.1

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 20.1% 17.8%
Industrials 16.1% 11.5%
Information Technology 14.9% 13.1%
Consumer Discretionary 12.3% 14.0%
Health Care 9.9% 9.5%
Materials 7.1% 8.1%
Consumer Staples 6.7% 8.7%
Communication Services 4.4% 7.3%
Energy 3.9% 4.3%
Utilities 2.4% 3.3%
Real Estate 0.5% 2.6%
TOP 10 COUNTRIES
Country Fund Benchmark
China 12.5% 12.8%
Germany 12.4% 5.8%
France 12.1% 6.7%
United Kingdom 9.9% 8.8%
Switzerland 9.1% 5.9%
Japan 7.1% 15.7%
South Korea 5.8% 4.2%
Taiwan 5.7% 4.2%
Spain 5.3% 1.5%
Italy 3.4% 1.5%
Regional Allocation
  • Europe – other 57.4%
  • Emerging Asia 28.0%
  • Pacific 7.1%
  • Emerging Europe, Middle East, Africa 2.3%
  • Emerging Latin America 2.3%
  • North America 1.1%

Commentary (As of January 31, 2021)

Highlights

  • After a strong start, developed equity markets gave up gains in the latter half of January as investor sentiment was dampened by a slower-than-expected global rollout of vaccines, concerns over new variants of the virus, and renewed lockdowns. Propelled by Chinese stocks, emerging market (“EM”) equities delivered positive returns in January.
  • We currently expect additional vaccines to receive broad-based emergency use authorization in the first quarter of 2021, such as those from AstraZeneca/Oxford, Novavax and Johnson & Johnson—all of which reported high levels of efficacy. A rebound in global gross domestic product (“GDP”) growth should accelerate as the pace of vaccinations ramp up.
  • The recovery from the global healthcare crisis has proceeded with fits and starts, with short-term news flow drowning out other investment considerations such as talented managements, favorable competitive positioning, strong balance sheets, and prospects for a sharp upturn in profitability. While we believe vaccine campaigns should succeed in allowing a full reopening of global economies, we have taken advantage of investor pessimism for economically sensitive stocks.

Portfolio attribution

The Causeway International Opportunities Fund (“Fund”) underperformed the Index during the month, due primarily to stock selection. Fund holdings in the banks, transportation, capital goods, pharmaceuticals & biotechnology, and insurance industry groups detracted most from performance relative to the Index. Holdings in the media & entertainment, consumer durables & apparel, food beverage & tobacco, and automobiles & components industry groups, as well as an underweight position in the household & personal products industry group, offset a portion of the underperformance. The largest detractor from absolute performance was jet engine manufacturer, Rolls-Royce Holdings Plc (United Kingdom). Additional detractors included travel & tourism information technology provider, Amadeus IT Group SA (Spain), low-budget airline, Ryanair Holdings Plc (Ireland), airline, Air Canada (Canada), and life insurer, Prudential Plc (United Kingdom). The top contributor to return was online services company, Tencent Holdings Ltd. (China). Other notable contributors included integrated circuit manufacturer, Taiwan Semiconductor Manufacturing Co., Ltd. (Taiwan), internet commerce company, Alibaba Group Holding (China), industrial conglomerate, Siemens AG (Germany), and electric components manufacturer, Murata Manufacturing Co., Ltd. (Japan).

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

January’s slump in share prices for some of the developed market stocks hardest hit by the pandemic does not dent our conviction. We believe some of the largest future returns should come from stocks most affected by coronavirus lockdowns like travel, travel software, leisure, and aerospace. The recovery from the global healthcare crisis has proceeded with fits and starts, with short-term news flow drowning out other investment considerations such as talented managements, favorable competitive positioning, strong balance sheets, and prospects for a sharp upturn in profitability. We believe vaccine campaigns should succeed in allowing a full reopening of global economies and have taken advantage of investor pessimism for economically sensitive stocks. Some of these developed market company management teams have engaged in meaningful cost-cutting and efficiency improvements over the last year, positioning their firms to generate higher cash flows and earnings as revenues recover. We also focus our fundamental research efforts on areas of the market that were largely left out of the late-2020 rally boasting attractive defensive characteristics and growth. These potential risk reducers include high-quality pharmaceutical and consumer companies. We remain confident that many of our portfolio companies should return capital to shareholders in the form of dividends and share buybacks as vaccination efforts speed up and economies return to normality.

Within the EM portion of the Fund, we recently added a bottom-up competitive strength factor to our model. The new alpha factor examines current levels and longer-term trends in a broad range of metrics relevant to competitive strength: margins, returns, competition, industry structure, market share, and balance sheet strength. The factor has quality aspects as it highlights companies with increasing profit margins and returns on equity. This indicator also seeks to identify companies that operate in environments with few competitors and enjoy significant market share. Given these favorable competitive dynamics, these companies should be better positioned to sustain their strong performance. The factor also includes a balance sheet strength component that considers financial leverage and default risk. Based on our research, the competitive strength factor is a good complement to our value factor, which continues to be the dominant indicator in our 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
2020 $0.1696 $0.0000 $0.0000
2019 $0.3193 $0.0000 $0.0327
2018 $0.2580 $0.0000 $0.0327
2017 $0.1923 $0.0000 $0.0000
2016 $0.4245 $0.0000 $0.0000
2015 $0.1357 $0.0107 $0.0199
2014 $0.0000 $0.0000 $0.4943
2013 $0.0958 $0.0001 $0.0739
2012 $0.2215 $0.0000 $0.0190
2011 $0.2487 $0.0000 $0.0303
2010 $0.1712 $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: