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*
+7.20%
Nav*
$14.60, -0.03
Inception
October 20, 2014
Cusip
14949P703
Benchmark
MSCI ACWI ex USA Small Cap
Minimum Investment
$1,000,000
Sales Charge
None
Net Expense Ratio
1.10%
Gross Expense Ratio
1.31%
*As of June 14, 2024
Download Profile Sheet Download Prospectus
Contact Us

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

QTD YTD 1 year3 years5 years Since inception
Fund 2.7%9.4%33.6%7.5%11.5%8.3%
MSCI ACWI ex USA Small Cap 1.9%4.1%16.9%-0.8%7.7%6.5%
QTD YTD 1 year3 years5 years Since inception
Fund 2.7%9.4%33.6%7.5%11.5%8.3%
MSCI ACWI ex USA Small Cap 1.9%4.1%16.9%-0.8%7.7%6.5%
QTD YTD 1 year3 years5 years Since inception
Fund 6.5%6.5%30.6%9.2%9.8%8.1%
MSCI ACWI ex USA Small Cap 2.2%2.2%13.4%0.8%6.7%6.4%
QTD YTD 1 year3 years5 years Since inception
Fund 6.5%6.5%30.6%9.2%9.8%8.1%
MSCI ACWI ex USA Small Cap 2.2%2.2%13.4%0.8%6.7%6.4%
202320222021202020192018201720162015
Fund 27.2%-11.3%21.6%2.7%18.8%-21.1%34.7%3.3%4.7%
MSCI ACWI ex USA Small Cap 16.2%-19.6%13.4%14.7%22.9%-17.9%32.1%4.3%3.0%
Fund
MSCI ACWI ex USA Small Cap
202320222021202020192018201720162015
27.2%-11.3%21.6%2.7%18.8%-21.1%34.7%3.3%4.7%
16.2%-19.6%13.4%14.7%22.9%-17.9%32.1%4.3%3.0%

Portfolio (as of May 31, 2024)

Benchmark: MSCI ACWI ex USA Small Cap
Asset Allocation
Fund
Stocks 98.7%
Cash 1.3%
Fund Characteristics
Fund Benchmark
No. of holdings 187 4410
Weighted avg. market cap (US $MM) $2,632 $2,062
FY2 price/earnings 7.9 12.0
Price/book value 1.0 1.4
Net assets $131,622,275 -
TOP 10 ACTIVE HOLDINGS
Security Country Active weight*
Bper Banca Italy 2.0%
Radiant Opto-Electronics Corp. Taiwan 1.9%
Unipol Gruppo SpA Italy 1.9%
Power Finance Corp. Ltd. India 1.9%
Sojitz Corp. Japan 1.8%
Simplo Technology Co., Ltd. Taiwan 1.7%
KPIT Technologies Ltd. India 1.7%
Celestica Canada 1.7%
Electric Power Development Co., Ltd. Japan 1.6%
Mitsubishi Motors Corp. Japan 1.5%

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 22.7% 21.4%
Information Technology 15.6% 11.8%
Financials 14.6% 11.6%
Consumer Discretionary 10.9% 11.6%
Materials 7.0% 11.5%
Utilities 5.8% 3.1%
Energy 5.0% 4.2%
Consumer Staples 4.9% 6.0%
Real Estate 4.2% 8.5%
Communication Services 4.0% 3.6%
Health Care 3.0% 6.5%
Equity Funds 0.9% 0.0%
TOP 10 COUNTRIES
Country Fund Benchmark
Japan 25.6% 20.9%
Taiwan 10.2% 6.7%
Australia 7.2% 6.0%
India 6.7% 7.9%
Italy 6.6% 2.2%
United Kingdom 6.5% 9.7%
South Korea 6.3% 3.9%
Canada 5.7% 6.8%
Turkey 3.8% 0.7%
China 2.2% 2.5%
Regional Allocation
  • Pacific 35.4%
  • Emerging Asia 26.8%
  • Europe – other 24.5%
  • North America 5.7%
  • Emerging Europe, Middle East, Africa 4.1%
  • Emerging Latin America 1.4%
  • Multi Region All Country 0.9%

Commentary (As of May 31, 2024)

Highlights

  • May was a good month for equities, as investors remain optimistic about the economic outlook.
  • The strategy modestly underperformed for the period, mostly driven by stock selection.
  • We made several enhancements to our alpha model in the first quarter, reflecting the efforts to continue the productivity of our research agenda.

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 (formerly labelled competitive strength), and corporate events – and two top-down factor categories assessing macroeconomic and country aggregate characteristics. The strategy’s value factors delivered flat returns in May, though value remains the best-performing factor group over the last twelve months. Our sentiment and technical factors posted positive returns in the month, and the technical factor category has produced the highest returns year to date. Although our quality factors produced negative returns over the last month, returns over the last twelve months and YTD are positive. Our Corporate Events factor, added at the end of February, delivered positive returns in May. Our macroeconomic factors also delivered positive monthly returns as countries exhibiting more attractive characteristics (such as Sweden) outperformed those with relatively weaker characteristics (such as India). However, our country aggregate factors generated flat returns. All factor groups remain positive on an inception to date basis.

Quarterly Investment Outlook

We made several enhancements to our alpha model in the first quarter, reflecting the efforts to continue the productivity of our research agenda. Within our newly labeled quality factor category, we added a variety of financial strength factors, including several bank-specific metrics, to complement our existing competitive strength factors. We also introduced a new factor category, corporate events, in late February. This new set of factors is intended to capture the typical market reaction to a wide range of corporate events including management changes, financing events, buyback/dividend changes, and delayed earnings/filings, among other events.

Though we analyze many different stock selection factors in our alpha model, value factors receive the largest weight on average. Even if the U.S. Federal Reserve begins cutting policy rates soon, interest rates should remain elevated for some time, and a higher cost of capital should translate into a continued preference for value stocks. As of the end of May, the MSCI ACWI ex USA Small Cap Growth Index traded at a 17.8x forward price-to-earnings (P/E) multiple compared to 10.8x for the MSCI ACWI ex USA Small Cap Value Index, a 64% premium.

We believe another attractive feature of international small caps is that they exhibit greater valuation dispersion than large caps on both a forward earnings yield and B/P basis. This indicates more information content in the valuation ratios of small caps. In addition to exhibiting greater valuation dispersion, small caps exhibit a higher long-term earnings per share growth trend.

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

Dividends Short-term capital gains Long-term capital gains
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: