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*
+2.67%
Nav*
$13.86, +0.05
Inception
October 20, 2014
Cusip
14949P703
Benchmark
MSCI ACWI ex USA Small Cap
Minimum Investment
$1,000,000
Sales Charge
None
Gross Expense Ratio
1.21%
Net Expense Ratio
1.10%
*As of April 01, 2025
**Contractual fee waivers are in effect until 1/31/2026.

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

Performance

Table Header QTD YTD 1 year3 years5 years10 years Since inception
Fund 1.6%1.6%8.5%8.8%12.4%7.4%7.9%
MSCI ACWI ex USA Small Cap 0.3%0.3%4.9%1.7%7.5%5.6%6.0%
Table Header QTD YTD 1 year3 years5 years10 years Since inception
Fund 1.6%1.6%8.5%8.8%12.4%7.4%7.9%
MSCI ACWI ex USA Small Cap 0.3%0.3%4.9%1.7%7.5%5.6%6.0%
Table Header QTD YTD 1 year3 years5 years10 years Since inception
Fund -4.6%10.0%10.0%7.5%9.1%7.8%7.9%
MSCI ACWI ex USA Small Cap -7.6%3.9%3.9%-1.0%4.8%6.1%6.1%
Table Header QTD YTD 1 year3 years5 years10 years Since inception
Fund -4.6%10.0%10.0%7.5%9.1%7.8%7.9%
MSCI ACWI ex USA Small Cap -7.6%3.9%3.9%-1.0%4.8%6.1%6.1%
Table Header 2024202320222021202020192018201720162015
Fund 10.0%27.2%-11.3%21.6%2.7%18.8%-21.1%34.7%3.3%4.7%
MSCI ACWI ex USA Small Cap 3.9%16.2%-19.6%13.4%14.7%22.9%-17.9%32.1%4.3%3.0%
Table Header
Fund
MSCI ACWI ex USA Small Cap
2024202320222021202020192018201720162015
10.0%27.2%-11.3%21.6%2.7%18.8%-21.1%34.7%3.3%4.7%
3.9%16.2%-19.6%13.4%14.7%22.9%-17.9%32.1%4.3%3.0%

Portfolio (as of February 28, 2025)

Benchmark: MSCI ACWI ex USA Small Cap
Asset Allocation
Table Header Fund
Stocks 98.6%
Cash 1.4%
Fund Characteristics
Table Header Fund Benchmark
No. of holdings 177 4255
Weighted avg. market cap (US $MM) $3,013 $2,094
FY2 price/earnings 8.7 12.1
Price/book value 1.1 1.4
Net assets $182,116,584 -
TOP 10 ACTIVE HOLDINGS
Security Country Active weight*
Unipol Gruppo SpA Italy 2.1%
FinVolution Group China 2.0%
Hanwha Industrial Solutions Co., Ltd. South Korea 1.9%
JB Hi-Fi Ltd. Australia 1.9%
Celestica Canada 1.8%
Simplo Technology Co., Ltd. Taiwan 1.7%
Iveco Group NV Italy 1.6%
Credit Saison Co., Ltd. Japan 1.6%
AGF Management Canada 1.6%
Power Finance Corp. Ltd. India 1.4%

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 WEIGHTS
Sector Fund Benchmark
Industrials 23.6% 21.0%
Financials 16.2% 12.1%
Information Technology 15.8% 11.7%
Consumer Discretionary 10.3% 11.9%
Materials 6.6% 11.2%
Utilities 5.6% 3.0%
Health Care 5.5% 6.5%
Communication Services 5.2% 3.7%
Real Estate 5.0% 9.6%
Energy 2.4% 3.6%
Consumer Staples 1.5% 5.7%
Equity Funds 1.0% 0.0%
TOP 10 COUNTRIES
Country Fund Benchmark
Japan 26.2% 23.2%
Taiwan 11.1% 6.7%
Australia 7.5% 6.2%
Canada 6.8% 6.8%
Italy 6.7% 2.1%
United Kingdom 6.4% 8.7%
South Korea 5.3% 3.4%
India 5.2% 7.2%
China 3.5% 3.3%
Singapore 2.5% 1.4%
Regional Allocation
  • Pacific 36.8%
  • Emerging Asia 27.1%
  • Europe – other 21.0%
  • North America 6.8%
  • Emerging Europe, Middle East, Africa 2.8%
  • Developed Middle East 2.2%
  • Emerging Latin America 1.0%
  • Multi Region All Country 1.0%

Commentary (As of February 28, 2025)

Highlights

  • Global markets softened on the “US exceptionalism” trade in February with non-US equities and currencies demonstrating relative strength in the month.
  • The strategy outperformed for the period.
  • International small caps derive, on average, the majority of their revenue from their domestic/home market compared to larger peers, which helps provide better insulation to rising tariffs and barriers to trade.

Portfolio Attribution

The Causeway International Small Cap Fund (“Fund”), on a net asset value basis, outperformed the Index during the month. To evaluate stocks in our investable universe, our multi-factor quantitative model employs five bottom-up factor categories –valuation, sentiment, technical indicators, quality, and corporate events – and two top-down factor categories assessing macroeconomic and country aggregate characteristics. All alpha factor categories delivered positive returns in February. Our technical factors were the best-performing bottom-up factor group last month, while the strategy’s value factors have posted the highest factor returns over the last twelve months. Returns to our macroeconomic and country aggregate factors were also positive in February as countries exhibiting more attractive characteristics (such as Taiwan) outperformed those with relatively weaker characteristics (such as India). All factor groups remain positive on an inception to date basis.

Quarterly Investment Outlook

The US Federal Reserve reduced its benchmark interest rate by another 0.25% in December, but its forward guidance was interpreted as more hawkish than expected. Nevertheless, inflation in the US is still trending down, with November PCE inflation at just +0.1% month-over-month. This trajectory could change depending on the policies of the incoming Trump administration; however more accommodative central bank policy in the US, and the potential for a weaker US dollar, should be tailwinds for international small caps.

Chinese authorities have continued to talk up supporting their economy and markets in recent months; however specific fiscal stimulus efforts remain unclear. We expect plans will become more crystallized as the Trump tariff negotiations proceed. Although China is approximately 3% of the ACWI ex USA Small Cap Index, additional monetary and fiscal stimulus should be supportive of global economic growth.

International small caps (ACWI ex USA Small Cap Index) derive, on average, 66% of their revenue from their domestic/home market compared to larger peers (MSCI ACWI ex USA Index) at 48%, which helps provide better insulation to rising tariffs and barriers to trade.

International small caps (ACWI ex USA Small Cap Index) continue to trade at a rare discount to their larger-cap (ACWI ex USA Index) peers on a forward P/E basis. In addition to the attractive relative valuation of the asset class overall, Causeway’s International Small Cap portfolio continues to trade at a substantial discount to the Index while simultaneously exhibiting more favorable growth, quality, momentum, and positive estimate revisions than the Index. We believe that this highly attractive combination of characteristics better insulates our portfolio from future volatility.

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.

Distributions

Table Header Dividends Short-term capital gains Long-term capital gains
2024 $0.7366 $0.2918 $0.4332
2023 $0.8478 $0.0000 $0.0192
2022 $0.3363 $0.0000 $0.0000
2021 $0.4823 $0.0000 $0.0000
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).

Documents

Fund information:

Forms: