PERFORMANCE REVIEW for the month ended 31 Aug 2017

International smaller capitalization equities extended their run with August marking the eighth consecutive month of positive absolute performance. For the month, international smaller capitalization equities slightly outperformed larger capitalization equities. Developed markets underperformed emerging markets in the month of August and they lag emerging market returns in 2017 by a large margin. However, within emerging markets, small capitalization stocks slightly underperformed large capitalization stocks, continuing a trend over the last 12 months.

Within the MSCI ACWI ex USA Small Cap Index (“Index”), eight out of eleven sectors posted positive returns in August. Among them, the top performing sectors were materials, consumer staples, and health care. Energy, financials, and telecommunication services were the weakest performers and the three sectors with negative returns for the month.

Causeway International Small Cap Fund (“Fund”) outperformed the Index during the month. To evaluate stocks in our investable universe, our multi-factor quantitative model employs four broad bottom-up factor categories: valuation, earnings growth, technical indicators, and quality. Although value factors posted slightly negative returns for August, value remains the best-performing factor group over the past 12 months. Earnings growth factors posted positive returns for August, however earnings growth is the worst performing factor group in 2017 (though the factor group still maintains slightly positive returns for the year). Technical factors were the strongest performing factor group in the month of August and are now the strongest factor group in 2017. The quality factor group posted flat returns in August, although it has been the most consistent factor group performer over the last twelve months. All factor group returns are positive over the 2017 year-to-date period, and all remain positive on an inception-to-date basis.

Fund holdings in materials, industrials, and real estate contributed the most to relative performance. However, holdings in the health care, energy, and financials sectors offset a portion of the outperformance. August’s outperformance was primarily driven by stock selection. The largest contributor to relative performance was materials producer, EVRAZ Plc (United Kingdom). Additional top contributors included diversified mining company, Mineral Resources Ltd. (Australia), motorway & infrastructure construction company, ASTM SpA (Italy), passenger & cargo airline company, Air France-KLM SA (France), and commercial and industrial real estate investment trust, Macquarie Mexico Real Estate (Mexico). The largest detractor to relative performance was chemicals producer, Soda Sanayii A.S. (Turkey). Additional detractors included energy services company, Modec, Inc. (Japan), print and digital media provider, Transcontinental Inc. (Canada), newspaper and magazine publisher, Trinity Mirror Plc (United Kingdom), and real estate developer, Yanlord Land Group Ltd. (Singapore).

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.