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*
-14.40%
Nav*
$13.37, +0.17
Inception
October 26, 2001
Cusip
14949P208
Benchmark
MSCI EAFE
Minimum Investment
$1,000,000
Sales Charge
None
Net Expense Ratio
0.85%
Gross Expense Ratio
0.90%
*As of August 05, 2020
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Strategy overview

The portfolio managers discuss our International Value strategy.

Portfolio managers

Chief Executive Officer
Fundamental Portfolio Manager
President
Head of Fundamental Research
Fundamental Portfolio Manager
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 0.0%-18.1%-8.4%-4.4%-1.4%3.8%5.8%
MSCI EAFE 2.4%-9.0%-1.2%1.1%2.6%5.5%5.8%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 0.0%-18.1%-8.4%-4.4%-1.4%3.8%5.8%
MSCI EAFE 2.4%-9.0%-1.2%1.1%2.6%5.5%5.8%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 20.5%-18.1%-10.8%-3.5%-1.1%4.9%5.8%
MSCI EAFE 15.1%-11.1%-4.7%1.3%2.5%6.2%5.7%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 20.5%-18.1%-10.8%-3.5%-1.1%4.9%5.8%
MSCI EAFE 15.1%-11.1%-4.7%1.3%2.5%6.2%5.7%
201920182017201620152014201320122011201020092008200720062005200420032002
Fund 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 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
201920182017201620152014201320122011201020092008200720062005200420032002
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%
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 June 30, 2020)

Benchmark: MSCI EAFE
Asset Allocation
Fund
Stocks 97.6%
Cash 2.4%
Fund Characteristics
Fund Benchmark
No. of holdings 66 902
Weighted avg. market cap (US $MM) $55,123 $52,799
FY2 price/earnings 11.9 15.1
Price/book value 1.0 1.5
Net assets $4,674,001,892 -
TOP 10 HOLDINGS
Security Country Percent
Volkswagen AG Germany 4.5%
UniCredit S.p.A. Italy 3.8%
BASF SE Germany 3.7%
ABB Ltd. Switzerland 3.3%
Siemens AG Germany 3.1%
Samsung Electronics Co., Ltd. South Korea 2.9%
Novartis AG Switzerland 2.9%
FANUC Corp. Japan 2.8%
Takeda Pharmaceutical Co., Ltd. Japan 2.7%
British American Tobacco plc United Kingdom 2.6%

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
Industrials 23.3% 14.5%
Financials 20.4% 16.1%
Health Care 11.2% 14.5%
Information Technology 10.7% 8.3%
Materials 8.6% 7.3%
Consumer Discretionary 8.3% 11.3%
Consumer Staples 5.6% 12.0%
Communication Services 5.4% 5.4%
Energy 2.8% 3.4%
Utilities 1.4% 4.0%
Real Estate 0.0% 3.2%
TOP 10 COUNTRIES
Country Fund Benchmark
Germany 23.8% 9.3%
United Kingdom 20.4% 14.1%
Switzerland 9.7% 10.3%
France 9.6% 10.9%
Japan 9.4% 25.4%
Netherlands 5.0% 4.3%
Italy 4.5% 2.3%
Spain 4.2% 2.4%
South Korea 4.0% 0.0%
China 2.9% 0.0%
Regional Allocation
  • Europe – other 80.5%
  • Pacific 9.4%
  • Emerging Asia 7.1%
  • Emerging Latin America 0.6%

Commentary (As of June 30, 2020)

Highlights

  • Bolstered by enormous monetary and fiscal stimulus policies globally, equity markets continued to ascend from their late-March lows. Although the valuation gap between growth stocks and value stocks grew even wider, global central bank liquidity injection fueled a resurgence of cyclical stocks over defensive stocks during the second quarter.
  • Worldwide, central banks indicated they are prepared to continue supportive policies to maintain abundant monetary liquidity and keep their respective government and corporate borrowing costs low. We anticipate that monetary and fiscal policy responses from major economies will continue until economic data indicate a sustainable recovery has taken hold.
  • Cyclical stocks have traditionally performed best as markets begin to discount a recovery from the lows of recession. We are taking advantage of investor pessimism (and investors’ possible short time horizons) by adding to positions in several competitively, and potentially well-positioned companies, at valuations we believe imply permanent demand destruction.

Portfolio attribution

Causeway International Value Fund (“Fund”) outperformed the Index during the month, due primarily to stock selection. Fund holdings in the capital goods, materials, technology hardware & equipment, and media & entertainment industry groups, as well as an overweight position in the banks industry group, contributed to relative performance. Holdings in the telecommunication services, pharmaceuticals & biotechnology, consumer services, and food beverage & tobacco industry groups, along with an underweight position in the diversified financials industry group, offset some of the outperformance versus the Index. The top contributor to return was diversified chemicals manufacturer, BASF SE (Germany). Other notable contributors included power & automation technology company, ABB Ltd. (Switzerland), mail, express & logistics services provider, Deutsche Post AG (Germany), banking & financial services company, UniCredit S.p.A. (Italy), and internet services provider, Baidu (China). The largest detractor was Takeda Pharmaceutical Co., Ltd. (Japan). Additional notable detractors included low-budget airline, Ryanair Holdings (Ireland), contract food service company, Compass Group Plc (United Kingdom), British American Tobacco Plc (United Kingdom), and bank, Sumitomo Mitsui Financial Group, Inc. (Japan).

Investment outlook

With vaccines potentially available by year-end 2020 or early 2021, we believe equity markets have more upside potential. In the latter half of 2020, we believe markets should benefit further from a recovery in both consumption and investment spending. The second quarter of 2020 was the strongest quarter for global equities since 2009, in part thanks to the unprecedented levels of central bank purchases of financial securities and record setting low bond yields. The persistent decline in long term bond yields partly explains the widening gap in performance between growth and value investment styles. However, we believe this valuation disparity will reverse as economies potentially move through the worst of their lockdown-induced recessions. Although the rally in equity markets from late-March lows was primarily driven by liquidity, a nascent economic recovery helped economically sensitive stocks outperform traditionally defensive stocks during the quarter. This suggests, in our view, that cyclical stocks, hardest hit in the first quarter selloff, have further recovery potential. We believe operating leverage should propel earnings growth for cyclical companies should revenues continue to recover towards pre-pandemic levels and slimmer cost bases boost profit margins. Cyclical stocks have traditionally performed best as markets begin to discount a recovery from the lows of recession. This may be especially true of the recession caused by the coronavirus, given extraordinary fiscal spending and efforts to stimulate the economic recovery. We are taking advantage of investor pessimism (and investors’ possible short time horizons) by adding to positions in what we believe are several competitively well-positioned companies, at valuations we further believe imply permanent demand destruction. We currently expect temporary, not structural, changes to aerospace, aviation, travel & leisure, and a host of cyclical industries such as banking, insurance, and industrials.

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
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: