Seeking value primarily in the non-US developed markets

The Fund invests primarily in common stocks of companies in developed countries outside the US. Normally, the Fund invests at least 80% of its total assets in stocks of companies in a number of foreign countries and invests the majority of its total assets in companies that pay dividends or repurchase their shares. The Fund may invest up to 15% of its total assets in companies in emerging (less developed) markets.

YTD Return*
+21.22%
Nav*
$19.31, -0.04
Inception
October 26, 2001
Cusip
14949P208
Benchmark
MSCI EAFE
Minimum Investment
$1,000,000
Sales Charge
None
Net Expense Ratio
0.88%
Gross Expense Ratio
0.91%
*As of November 30, 2023
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Strategy overview

The portfolio managers discuss our International Value strategy.

Portfolio managers

Fundamental Portfolio Manager
Fundamental Portfolio Manager
President
Head of Fundamental Research
Fundamental Portfolio Manager
Chief Executive Officer
Fundamental Portfolio Manager
Fundamental Portfolio Manager
Fundamental Portfolio Manager
Fundamental Portfolio Manager
Fundamental Portfolio Manager

Performance

QTD YTD 1 year3 years5 years10 years Since inception
Fund -3.5%11.8%27.3%14.9%5.8%3.5%6.7%
MSCI EAFE -4.0%3.2%15.0%6.3%4.6%3.5%5.7%
QTD YTD 1 year3 years5 years10 years Since inception
Fund -3.5%11.8%27.3%14.9%5.8%3.5%6.7%
MSCI EAFE -4.0%3.2%15.0%6.3%4.6%3.5%5.7%
QTD YTD 1 year3 years5 years10 years Since inception
Fund -3.4%15.8%42.3%14.5%4.9%4.1%6.9%
MSCI EAFE -4.0%7.6%26.3%6.3%3.7%4.3%5.9%
QTD YTD 1 year3 years5 years10 years Since inception
Fund -3.4%15.8%42.3%14.5%4.9%4.1%6.9%
MSCI EAFE -4.0%7.6%26.3%6.3%3.7%4.3%5.9%
202220212020201920182017201620152014201320122011201020092008200720062005200420032002
Fund -6.8%9.1%5.4%20.1%-18.6%27.2%0.4%-3.0%-6.2%24.2%24.5%-10.6%12.3%32.3%-41.9%7.9%26.1%8.1%26.6%45.9%-10.9%
MSCI EAFE -14.0%11.8%8.3%22.7%-13.4%25.6%1.5%-0.4%-4.5%23.3%17.9%-11.7%8.2%32.5%-43.1%11.6%26.9%14.0%20.7%39.2%-15.7%
Fund
MSCI EAFE
202220212020201920182017201620152014201320122011201020092008200720062005200420032002
-6.8%9.1%5.4%20.1%-18.6%27.2%0.4%-3.0%-6.2%24.2%24.5%-10.6%12.3%32.3%-41.9%7.9%26.1%8.1%26.6%45.9%-10.9%
-14.0%11.8%8.3%22.7%-13.4%25.6%1.5%-0.4%-4.5%23.3%17.9%-11.7%8.2%32.5%-43.1%11.6%26.9%14.0%20.7%39.2%-15.7%

Portfolio (as of October 31, 2023)

Benchmark: MSCI EAFE
Asset Allocation
Fund
Stocks 97.4%
Cash 2.6%
Fund Characteristics
Fund Benchmark
No. of holdings 69 797
Weighted avg. market cap (US $MM) $71,074 $68,409
FY2 price/earnings 10.6 11.9
Price/book value 1.6 1.7
Net assets $6,631,720,110 -
TOP 10 HOLDINGS
Security Country Percent
Rolls-Royce Holdings Plc United Kingdom 5.1%
Samsung Electronics Co., Ltd. South Korea 4.2%
UniCredit S.p.A. Italy 3.0%
BP Plc United Kingdom 2.8%
Reckitt Benckiser Group United Kingdom 2.7%
Roche Holding AG Switzerland 2.7%
Enel SpA Italy 2.6%
Barclays PLC United Kingdom 2.4%
Shell United Kingdom 2.4%
Prudential Plc United Kingdom 2.4%

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.

Holdings are subject to change.

SECTOR WEIGHTS
Sector Fund Benchmark
Financials 18.3% 19.1%
Industrials 14.4% 15.7%
Health Care 14.1% 13.1%
Consumer Staples 13.9% 9.9%
Information Technology 11.4% 7.9%
Consumer Discretionary 5.8% 11.9%
Energy 5.2% 4.9%
Materials 5.0% 7.5%
Utilities 4.7% 3.5%
Communication Services 3.2% 4.2%
Equity Funds 1.0% 0.0%
Real Estate 0.4% 2.3%
TOP 10 COUNTRIES
Country Fund Benchmark
United Kingdom 33.5% 15.3%
France 12.6% 12.1%
Germany 9.1% 8.3%
Switzerland 6.5% 9.9%
Japan 6.0% 22.9%
South Korea 5.7% 0.0%
Netherlands 5.5% 4.4%
Italy 5.5% 2.7%
Spain 3.5% 2.6%
Canada 2.5% 0.0%
Regional Allocation
  • Europe – other 79.5%
  • Pacific 12.7%
  • North America 2.5%
  • Emerging Asia 1.0%
  • Multi Region Developed 1.0%
  • Emerging Latin America 0.6%

Commentary (As of October 31, 2023)

Highlights

  • Global equities retreated for the 3rd consecutive month in October as investors digested the “higher for longer” interest rate backdrop.
  • Excluding Australia, major Developed Market central banks, including the US Federal Reserve Bank, The Bank of England, The European Central Bank and The Bank of Japan, voted to leave rates unchanged at their most recent meetings.
  • Our investment teams’ demands of company management—holding managements accountable to improve earnings and cash flow—should help drive portfolio ROE higher in the years ahead.OE higher in the years ahead.

Portfolio attribution

The Causeway International Value Equity Fund ("Fund"), on a net asset value basis, modestly outperformed the MSCI EAFE Index during the month. On a gross return basis, Fund holdings in the food beverage & tobacco, consumer staples distribution & retail, and utilities industry groups contributed to relative performance. Holdings in pharmaceuticals & biotechnology, capital goods, and banks industry groups, offset some of the performance compared to the Index. The top contributor to return was health food & beverage producer, Danone (France). Other notable contributors included banking & financial services company, UniCredit S.p.A. (Italy), and convenience store operator, Alimentation Couche-Tard (Canada). The largest detractor was banking & financial services company, Barclays PLC (United Kingdom). Additional notable detractors included rolling stock, signaling, & services provider for the rail industry, Alstom SA (France), and pharmaceutical giant, Sanofi (France).

Economic outlook

Excluding Australia, major Developed Market central banks, including the US Federal Reserve Bank, The Bank of England, The European Central Bank and The Bank of Japan, voted to leave rates unchanged at their most recent meetings. The global manufacturing output PMI slipped 0.9 points to 48.9 last month, a level consistent with a 0.5% annual rate contraction in factory output. The standout positive in the October PMIs was the US, with a rise in both the output (+0.5 points) and new orders (+1.4 points) indexes. However, China stepped down and the Euro area PMI remains stuck at a recessionary level.

According to JP Morgan, mainland China’s global PMI slipped to 48.8 likely reflecting the ongoing drags from the real estate sector and domestic demand weakness and raising questions about the resilience of the end-of-third quarter momentum.

Investment outlook

The era of cheap money is behind us, and at a minimum we are entering uncharted territory of public sector deficits and rising debt to GDP. We are careful to avoid making investment decisions based on the interest rate regime of the past 15-20 years. We expect an era of higher long term interest rates, even if global economic activity falters. Large budget deficits and overall public sector debt levels, the capital demands required to fund the transition to a low carbon global economy, along with the costs of ongoing armed conflict and aging demographics in the developed countries plus China, suggest that structurally higher long term interest rates will be required to attract capital.

The "higher for longer" theme, coupled with uncertainty about the path of economic activity, will likely result in continued volatility in global equity markets. Causeway's commitment to detailed and disciplined fundamental research aims to position the team well to identify mispriced securities in this dynamic environment on behalf of our clients.As central banks continue their efforts to control inflation, this will likely lead to an environment of greater equity volatility than in the past 10-15 years. We believe that active management produces superior performance versus passive management in volatile markets. And a greater focus on valuation now that money is not free should favor managers employing a disciplined, value oriented, long term investment approach. Though US stocks—with their overall higher returns on capital—generally deserve to trade at a premium to their non-US peers, the current valuation gaps far exceed long term averages.

Also, the major US indices have become relatively concentrated in a small number of expensive mega-cap stocks. For a passive investor mimicking a market capitalization weighted US index, this creates a level of concentration risk that should be of concern. Using our measure of predicted volatility, broad-based developed market value indices are currently less volatile than growth indices. At a minimum, investors should demand a higher return for owning riskier growth stocks and this is occurring right at the point when long duration (growth) equities are under strain from higher long term interest rates. Relative to history, the portfolio’s valuation characteristics indicate upside potential that, in our view, more than justifies the risk. We anticipate the portfolio’s below benchmark return on equity (ROE) will continue to improve as the earnings of some of the bigger holdings progress through the end of 2024. Our investment teams’ demands of company management—holding managements accountable to improve earnings and cash flow—should help drive portfolio ROE higher in the years ahead.

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 are subject to risk. A company may reduce or eliminate its dividend, causing losses to a fund. 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
2022 $0.2834 $0.0000 $0.0000
2021 $0.3170 $0.0000 $0.0000
2020 $0.2231 $0.0000 $0.0000
2019 $0.4953 $0.0497 $0.1781
2018 $0.3750 $0.0000 $0.1083
2017 $0.3165 $0.0000 $0.0000
2016 $0.2901 $0.0000 $0.0000
2015 $0.2750 $0.0000 $0.0000
2014 $0.3788 $0.0000 $0.0000
2013 $0.1645 $0.0000 $0.0000
2012 $0.2757 $0.0000 $0.0000
2011 $0.3813 $0.0000 $0.0000
2010 $0.1939 $0.0000 $0.0000
2009 $0.1875 $0.0000 $0.0000
2008 $0.5135 $0.0000 $0.4558
2007 $0.4536 $0.6606 $3.3443
2006 $0.2289 $0.0222 $0.8650
2005 $0.3718 $0.1962 $0.3833
2004 $0.2647 $0.1379 $0.3093
2003 $0.1813 $0.0037 $0.0550
2002 $0.1196 $0.0000 $0.0000
2001 $0.0000 $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: