Seeking diversified exposure to international small cap companies

The Fund invests primarily in common stocks of companies with smaller market capitalizations located in developed and emerging markets outside the US. The Fund normally invests at least 80% of its total assets in equity securities of companies with smaller market capitalizations. Smaller market capitalization companies are companies with market capitalizations that do not exceed the highest market capitalization of a company within the Fund’s benchmark, the MSCI ACWI ex USA Small Cap Index (Gross), at the time of purchase. Some of these companies, although small by US standards, might be large companies in their local markets. The Fund may continue to hold securities of a portfolio company that appreciate above the smaller market capitalization threshold and thus may from time to time hold less than 80% of its total assets in equity securities of companies with smaller market capitalizations. The Fund may invest in a wide range of industries. The Fund’s investment objective is to seek long-term growth of capital.

YTD Return*
$13.60, -0.14
October 20, 2014
MSCI ACWI ex USA Small Cap
Minimum Investment
Sales Charge
Net Expense Ratio
Gross Expense Ratio
*As of September 17, 2021
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Strategy overview

The portfolio managers discuss our International Small Cap strategy.

Portfolio managers

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


QTD YTD 1 year3 years5 years Since inception
Fund -1.5%20.6%35.1%6.5%9.4%8.3%
MSCI ACWI ex USA Small Cap 3.2%16.1%36.0%11.4%11.9%10.0%
QTD YTD 1 year3 years5 years Since inception
Fund -1.5%20.6%35.1%6.5%9.4%8.3%
MSCI ACWI ex USA Small Cap 3.2%16.1%36.0%11.4%11.9%10.0%
QTD YTD 1 year3 years5 years Since inception
Fund 9.1%22.5%53.6%7.6%8.8%
MSCI ACWI ex USA Small Cap 6.5%12.5%47.6%10.2%9.7%
QTD YTD 1 year3 years5 years Since inception
Fund 9.1%22.5%53.6%7.6%8.8%
MSCI ACWI ex USA Small Cap 6.5%12.5%47.6%10.2%9.7%
Fund 2.7%18.8%-21.1%34.7%3.3%4.7%
MSCI ACWI ex USA Small Cap 14.7%22.9%-17.9%32.1%4.3%3.0%
MSCI ACWI ex USA Small Cap

Portfolio (as of August 31, 2021)

Benchmark: MSCI ACWI ex USA Small Cap
Asset Allocation
Stocks 98.0%
Cash 2.0%
Fund Characteristics
Fund Benchmark
No. of holdings 130 4398
Weighted avg. market cap (US $MM) $2,487 $2,333
FY2 price/earnings 7.4 14.5
Price/book value 1.1 1.6
Net assets $63,716,979 -
Security Country Active weight*
SITC International Holdings Co., Ltd. Hong Kong 2.1%
Kindred Group Plc Sweden 2.0%
Royal Mail Plc United Kingdom 1.9%
Mineral Resources Ltd. Australia 1.8%
Canfor Canada 1.8%
EVRAZ Plc United Kingdom 1.7%
Gigabyte Technology Co., Ltd. Taiwan 1.7%
BE Semiconductor Industries NV Netherlands 1.7%
ASR Nederland NV Netherlands 1.6%
Hyosung TNC Corp. South Korea 1.6%

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.

*Active defined as Fund weight minus MSCI ACWI ex USA Small Cap Index weight. Holdings are subject to change.

Sector Fund Benchmark
Industrials 19.4% 21.3%
Consumer Discretionary 15.7% 12.1%
Financials 14.5% 10.4%
Information Technology 13.7% 12.1%
Materials 12.1% 10.8%
Real Estate 6.1% 10.5%
Equity Funds 4.1% 0.0%
Health Care 3.6% 7.6%
Communication Services 3.0% 4.1%
Consumer Staples 2.8% 5.6%
Energy 1.5% 2.3%
Utilities 1.4% 3.2%
Country Fund Benchmark
Japan 14.1% 19.1%
Taiwan 8.7% 5.1%
South Korea 8.1% 4.3%
United Kingdom 7.7% 12.3%
Canada 7.1% 6.3%
Netherlands 5.9% 1.7%
Australia 5.3% 6.1%
Sweden 5.2% 5.5%
India 4.6% 4.6%
Multi-National All Country 4.1% 0.0%
Regional Allocation
  • Emerging Asia 29.2%
  • Europe – other 29.8%
  • Pacific 24.9%
  • North America 7.1%
  • Multi Region All Country 4.1%
  • Emerging Latin America 2.1%
  • Emerging Europe, Middle East, Africa 0.7%

Commentary (As of August 31, 2021)

Portfolio attribution

The Causeway International Small Cap Fund (“Fund”) underperformed the Index during the month. To evaluate stocks in our investable universe, our multi-factor quantitative model employs four bottom-up factor categories – valuation, earnings growth, technical indicators, and competitive strength – and two top-down factor categories assessing macroeconomic and country aggregate characteristics.

From a sector perspective, Fund holdings in information technology, consumer discretionary, and materials detracted the most from performance relative to the Index. Fund holdings in real estate, health care, and communication services offset a portion of the underperformance. Relative underperformance for the month can be mostly attributed to stock selection. The top detractor was semiconductor manufacturer, Sitronix Technology Corp. (Taiwan). Additional top detractors included fiber products manufacturer, Hyosung TNC Corp. (South Korea), computer hardware manufacturer, Gigabyte Technology Co., Ltd. (Taiwan), mining industry crushing service provider, Mineral Resources Ltd. (Australia), and mining company, Labrador Iron Ore Royalty (Canada). The largest contributor to performance was marine shipping company, Kawasaki Kisen Kaisha, Ltd.
(Japan). Additional top contributors included online gaming company, Kindred Group Plc (Sweden), insurance group, ASR Nederland NV (Netherlands), marine shipping company, Yang Ming Marine Transport Corp. (Taiwan), and semiconductor company, ChipMOS Technologies, Inc. (Taiwan).

Investment outlook

The shadow of Chinese regulatory action dominated headlines; however, it is important to note that China’s weight in the ACWI ex USA Small Cap Index is only 2.3%. Though we are modestly overweight China, our exposure is mostly focused on industries that we believe are outside the crosshairs of potential regulatory action.

Though we analyze many different stock selection factors in our alpha model, value factors receive the largest weight on average. As of August 31, the Small Cap Growth Index traded at a 22.7x forward price-to-earnings multiple compared to 12.6x for the Small Cap Value Index, an 80% premium. Even though the MSCI ACWI ex US Small Cap Value Index has outperformed the growth index by 2.5% in 2021 year-to-date, we believe there is far more “catching up” to come. And as we move beyond the worst of the latest Covid wave, we believe that value will resume its outperformance.

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 will be subject to 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.


Dividends Short-term capital gains Long-term capital gains
2020 $0.4107 $0.0000 $0.0000
2019 $0.4390 $0.0000 $0.0000
2018 $0.3165 $0.0000 $0.0000
2017 $0.3792 $0.2375 $0.4794
2016 $0.2901 $0.0000 $0.0000
2015 $0.2407 $0.0000 $0.0000

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).


Fund information: