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*
+10.58%
Nav*
$15.05, +0.09
Inception
October 20, 2014
Cusip
14949P802
Benchmark
MSCI ACWI ex USA Small Cap
Minimum Investment
$5,000
Sales Charge
None
Gross Expense Ratio
1.56%
Net Expense Ratio
1.35%
*As of July 22, 2024
**Contractual fee waivers are in effect until 1/31/2025.

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 1.4%8.0%22.5%6.3%10.0%7.8%
MSCI ACWI ex USA Small Cap 0.8%3.1%11.8%-1.0%6.6%6.3%
QTD YTD 1 year3 years5 years Since inception
Fund 1.4%8.0%22.5%6.3%10.0%7.8%
MSCI ACWI ex USA Small Cap 0.8%3.1%11.8%-1.0%6.6%6.3%
QTD YTD 1 year3 years5 years Since inception
Fund 1.4%8.0%22.5%6.3%10.0%7.8%
MSCI ACWI ex USA Small Cap 0.8%3.1%11.8%-1.0%6.6%6.3%
QTD YTD 1 year3 years5 years Since inception
Fund 1.4%8.0%22.5%6.3%10.0%7.8%
MSCI ACWI ex USA Small Cap 0.8%3.1%11.8%-1.0%6.6%6.3%
202320222021202020192018201720162015
Fund 26.8%-11.5%21.2%2.5%18.5%-21.3%34.5%3.1%4.4%
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
26.8%-11.5%21.2%2.5%18.5%-21.3%34.5%3.1%4.4%
16.2%-19.6%13.4%14.7%22.9%-17.9%32.1%4.3%3.0%

Portfolio (as of June 30, 2024)

Benchmark: MSCI ACWI ex USA Small Cap
Asset Allocation
Fund
Stocks 98.5%
Cash 1.5%
Fund Characteristics
Fund Benchmark
No. of holdings 182 4354
Weighted avg. market cap (US $MM) $2,794 $1,961
FY2 price/earnings 7.9 12.0
Price/book value 1.0 1.4
Net assets $72,046,803 -
TOP 10 ACTIVE HOLDINGS
Security Country Active weight*
KPIT Technologies Ltd. India 1.9%
Unipol Gruppo SpA Italy 1.8%
Bper Banca Italy 1.8%
Simplo Technology Co., Ltd. Taiwan 1.8%
Power Finance Corp. Ltd. India 1.8%
Radiant Opto-Electronics Corp. Taiwan 1.7%
Celestica Canada 1.7%
Sojitz Corp. Japan 1.6%
Mitsubishi Motors Corp. Japan 1.4%
Credit Saison Co., Ltd. Japan 1.2%

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.

*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 20.7% 21.4%
Information Technology 15.5% 12.2%
Financials 13.8% 11.5%
Consumer Discretionary 11.1% 11.7%
Materials 6.4% 11.2%
Utilities 5.7% 3.1%
Energy 5.4% 4.0%
Consumer Staples 4.7% 6.1%
Real Estate 4.3% 8.9%
Communication Services 4.2% 3.4%
Equity Funds 3.5% 0.0%
Health Care 3.1% 6.4%
TOP 10 COUNTRIES
Country Fund Benchmark
Japan 24.7% 21.4%
Taiwan 10.2% 7.1%
Australia 6.9% 5.9%
India 6.8% 9.0%
Italy 6.3% 2.1%
United Kingdom 6.2% 9.5%
South Korea 6.0% 3.8%
Canada 5.6% 6.7%
Turkey 4.2% 0.8%
Multi-National All Country 3.5% 0.0%
Regional Allocation
  • Pacific 34.7%
  • Emerging Asia 26.1%
  • Europe – other 22.7%
  • North America 5.6%
  • Emerging Europe, Middle East, Africa 4.8%
  • Multi Region All Country 3.5%
  • Emerging Latin America 1.0%

Commentary (As of June 30, 2024)

Highlights

  • Equity markets in June were driven higher by a relatively narrow set of stocks, predominantly large technology companies based in the United States and Emerging Asia.
  • The strategy outperformed for the period, mostly driven by stock selection.
  • Value stocks continue to trade at a significant discount to comparable growth companies, leaving ample room for continued value outperformance.

Portfolio Attribution

The Causeway International Small Cap Fund (“Fund”), on a net asset value basis, modestly underperformed 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. All of our bottom-up alpha factory categories generated positive returns in June and Q2. Our value factors delivered positive returns for the month and the second quarter amidst the backdrop of a continued higher interest rate environment. They are the best-performing factor group over the last twelve months. The strategy's sentiment factors also posted positive returns for the month and the quarter. Our technical factors were the best-performing alpha factor category in the month and the quarter, and they are the second-best performing factor group over the last twelve months. Our quality factors have also performed very well in the month, quarter, and trailing twelve months. Our macroeconomic and country aggregate factors delivered negative returns in June mostly due to India, which scores poorly on our top-down models, but which had strong returns in the month. All factor groups remain positive on an inception to date basis.

Quarterly Investment Outlook

Though we analyze many different stock selection factors in our alpha model, value factors receive the largest weight on average. As of the end of June, the MSCI ACWI ex USA Small Cap Growth Index traded at a 17.4x forward price-to-earnings (P/E) multiple compared to 10.6x for the MSCI ACWI ex USA Small Cap Value Index, a 65% premium, leaving ample room for potential value outperformance.

We believe another attractive feature of international small caps is that they generally 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 generally 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 $0.8169 $0.0000 $0.0192
2022 $0.3141 $0.0000 $0.0000
2021 $0.4608 $0.0000 $0.0000
2020 $0.3870 $0.0000 $0.0000
2019 $0.4079 $0.0000 $0.0000
2018 $0.2903 $0.0000 $0.0000
2017 $0.3588 $0.2375 $0.4794
2016 $0.2619 $0.0000 $0.0000
2015 $0.2095 $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: