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*
- +10.09%
- Nav*
- $12.66, +0.08
- Inception
- December 31, 2009
- Cusip
- 14949Q206
- Benchmark
- MSCI ACWI ex US
- Minimum Investment
- $5,000
- Sales Charge
- None
- Net Expense Ratio
- 1.30%
Portfolio managers
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. She is currently the chair of the Los Angeles World Affairs Council, a director of the Los Angeles Philharmonic, the Music Center Foundation (as chair of the investment committee), and serves on the Advisory Board of Girls Who Invest.
Harry Hartford
Head of Fundamental Research
Fundamental Portfolio Manager
Mr. Hartford is the president at Causeway, fundamental portfolio manager, and director of 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 & 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 and serves as chair of the Los Angeles Regional Board.
James Doyle
Mr. Doyle is a director and a fundamental portfolio manager at Causeway and has been with the firm since its inception in June 2001. Mr. Doyle has covered a variety of industries, including financials, industrials and consumer. His current responsibilities include technology, telecommunications and healthcare. He is also a member of the operating committee.
Previously, Mr. Doyle was an equity analyst and portfolio manager with the international team of the Hotchkis & Wiley division of Merrill Lynch Investment Managers. He also was an equity research consultant for Morgan Stanley Asset Management, and a financial analyst for LaSalle Partners.
Mr. Doyle earned a BA in economics from Northwestern University and an MBA in finance from the Wharton School, University of Pennsylvania. He is the co-chair of the Northwestern University Leadership Circle of Los Angeles.
Jonathan Eng
Mr. Eng is a director and fundamental portfolio manager at Causeway and is responsible for investment research in the global consumer discretionary and industrials 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 & Wiley division of Merrill Lynch Investment Managers (HW-MLIM). In 1996, Mr. Eng worked as a summer research associate for Hotchkis & 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.
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.
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.
Alessandro Valentini, CFA
Mr. Valentini is a director and fundamental portfolio manager at Causeway and is responsible for investment research in the global healthcare and financials 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.
Ellen Lee
Ms. Lee is a director and fundamental portfolio manager at Causeway and is responsible for investment research in the global consumer, utilities, and energy 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.
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. Mr. Kuhnert co-authored “To Hedge or Not to Hedge: Factor Dependence and Skill among Hedge Funds” published in The Journal of Alternative Investments.
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.
Steven Nguyen, CFA
Mr. Nguyen is a director and fundamental portfolio manager at Causeway and is responsible for investment research in the energy, utilities, and healthcare sectors. He joined the firm in April 2012.
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.
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 effect. In the absence of such fee waivers, total return would be reduced. The expense ratio for Investor Class shares is 1.30% and for Institutional Class shares is 1.05%. There is a 2% redemption fee on shares held less than 60 days to protect shareholders from short-term investors. If your account incurred a redemption fee, your performance will be lower than the performance quoted. If you invest through a financial intermediary, it may apply the Fund’s redemption fee or other frequent trading restrictions.
Portfolio (as of May 31, 2019)
Asset Allocation
| Fund | |
|---|---|
| Stocks | 97.2% |
| Cash | 2.8% |
Fund Characteristics
| Fund | Benchmark | |
|---|---|---|
| No. of holdings | 204 | 2210 |
| Weighted avg. market cap (US $MM) | $50,239 | $48,514 |
| FY2 price/earnings | 9.3 | 11.9 |
| Price/book value | 1.2 | 1.6 |
| Net assets | $10,151,886 | - |
TOP 10 HOLDINGS
| Security | Country | Percent |
|---|---|---|
| Volkswagen AG | Germany | 3.9 |
| Takeda Pharmaceutical Co., Ltd. | Japan | 3.1 |
| Linde Plc | Germany | 3.1 |
| KDDI Corp. | Japan | 2.7 |
| Prudential Plc | United Kingdom | 2.6 |
| ABB Ltd. | Switzerland | 2.4 |
| UniCredit S.p.A. | Italy | 2.4 |
| British American Tobacco plc | United Kingdom | 2.4 |
| AstraZeneca Plc | United Kingdom | 2.2 |
| BASF SE | Germany | 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 | 21.7% | 22.0% |
| Industrials | 15.0% | 11.8% |
| Materials | 10.3% | 7.5% |
| Energy | 9.7% | 7.3% |
| Health Care | 9.5% | 8.2% |
| Consumer Discretionary | 8.7% | 11.0% |
| Information Technology | 7.6% | 8.4% |
| Communication Services | 6.4% | 7.0% |
| Consumer Staples | 5.3% | 10.1% |
| Utilities | 2.2% | 3.3% |
| Real Estate | 0.8% | 3.3% |
TOP 10 COUNTRIES
| Country | Fund | Benchmark |
|---|---|---|
| United Kingdom | 26.8% | 11.5% |
| Japan | 11.6% | 16.1% |
| Germany | 11.4% | 5.8% |
| China | 8.0% | 8.6% |
| Switzerland | 7.2% | 6.0% |
| Canada | 5.5% | 6.8% |
| South Korea | 3.7% | 3.4% |
| France | 3.7% | 7.6% |
| India | 3.0% | 2.4% |
| Taiwan | 2.9% | 3.0% |
Regional Allocation
- Europe – other 54.2%
- Emerging Asia 18.2%
- Pacific 12.1%
- North America 7.8%
- Emerging Latin America 2.8%
- Emerging Europe, Middle East, Africa 2.5%
Distributions
| Dividends | Short-term capital gains | Long-term capital gains | |
|---|---|---|---|
| 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:
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Commentary (As of May 31, 2019)
Highlights
Portfolio attribution
Causeway International Opportunities Fund ("Fund") underperformed the Index during the month, due primarily to stock selection. Fund holdings in the banks, food beverage & tobacco, insurance, utilities, and energy industry groups detracted from relative performance. Holdings in the telecommunication services industry group, as well as an overweight position in the pharmaceuticals & biotechnology industry group and an underweight position in the retailing, semiconductors & semi equipment, and media & entertainment industry groups, offset some of the underperformance. The largest detractor was banking & financial services company, UniCredit S.p.A. (Italy). Additional notable detractors included oil & natural gas producer, Encana (Canada), diversified chemicals manufacturer, BASF SE (Germany), life insurer, Prudential Plc (United Kingdom), and automobile manufacturer, Volkswagen AG (Germany). The top contributor to return was telecommunication services provider, KDDI Corp. (Japan). Other notable contributors included energy company, Gazprom PJSC - ADR (Russia), pharmaceutical & consumer healthcare products producer, Novartis AG (Switzerland), multinational food processing company, JBS SA (Brazil), and industrial gas company, Linde Plc (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 neutral 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 and macroeconomic factors are negative for emerging markets. Lastly, our risk aversion factor is negative in our model.
Investment outlook
The anticipated “quality and safety” associated with economically defensive stocks attracted even more buying in May, stretching the valuation premium of defensive stocks compared to cyclical stocks to near historic highs. We believe the undervaluation in many of these cyclical industries such as US and European banks, global oil and gas, global industrials, consumer discretionary, and materials seems extreme, as our analysis indicates the valuations already discount recessionary economic conditions. In May, in particular, trade tensions have amplified risk aversion. And trade relief should do just the opposite, which would likely drive up bond yields and attract investors back to undervalued stocks. However, our price targets do not depend on economic recovery. To the degree managements of our developed market portfolio companies succeed in making significant operational improvements, their equity valuations should benefit and become less macroeconomic dependent. The value style does not rely on an economic environment; it tends to outperform growth when interest rates rise. Although we would welcome a value tailwind, we aim to build a portfolio that seeks to outperform even if investors crowd into long duration, growth equities. We have a preference for companies able to reward shareholder patience with dividends and share buybacks.
In the emerging markets portion of the Fund, our price momentum factor has rebounded in April and May after underperforming in recent quarters. Momentum’s strong performance in May was primarily attributable to defensive positioning as lower volatility stocks outperformed amid global equity market turbulence. Our momentum factor has tended to underperform during periods of heightened uncertainty in financial markets. A lack of clarity surrounding trade tensions, Fed policy, and global growth have contributed to momentum’s underperformance over the past 12 months. While we are researching the factor’s efficacy, we are encouraged that momentum continued to provide a hedge against value, our largest factor exposure.
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.