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*
+3.01%
Nav*
$16.09, +0.18
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 December 02, 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 20.4%-0.3%3.8%-0.2%4.1%5.5%6.8%
MSCI EAFE 10.9%3.5%6.8%3.8%6.7%6.3%6.4%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 20.4%-0.3%3.8%-0.2%4.1%5.5%6.8%
MSCI EAFE 10.9%3.5%6.8%3.8%6.7%6.3%6.4%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 1.0%-17.2%-7.8%-5.2%1.2%3.4%5.8%
MSCI EAFE 4.9%-6.7%0.9%1.1%5.8%5.1%5.8%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 1.0%-17.2%-7.8%-5.2%1.2%3.4%5.8%
MSCI EAFE 4.9%-6.7%0.9%1.1%5.8%5.1%5.8%
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 October 31, 2020)

Benchmark: MSCI EAFE
Asset Allocation
Fund
Stocks 99.6%
Cash 0.4%
Fund Characteristics
Fund Benchmark
No. of holdings 62 899
Weighted avg. market cap (US $MM) $50,009 $51,015
FY2 price/earnings 10.7 14.8
Price/book value 1.0 1.5
Net assets $5,332,267,913 -
TOP 10 HOLDINGS
Security Country Percent
Volkswagen AG Germany 4.1%
UniCredit S.p.A. Italy 3.6%
BASF SE Germany 3.5%
ING Groep NV Netherlands 3.2%
Samsung Electronics Co., Ltd. South Korea 3.1%
Takeda Pharmaceutical Co., Ltd. Japan 2.8%
Novartis AG Switzerland 2.8%
FANUC Corp. Japan 2.7%
ABB Ltd. Switzerland 2.6%
Barclays 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
Financials 24.6% 15.4%
Industrials 22.7% 15.3%
Information Technology 12.3% 8.4%
Health Care 10.3% 13.8%
Consumer Discretionary 10.1% 12.2%
Materials 7.1% 7.6%
Consumer Staples 5.9% 11.8%
Energy 2.9% 2.7%
Utilities 2.3% 4.0%
Communication Services 1.6% 5.7%
Real Estate 0.0% 3.1%
TOP 10 COUNTRIES
Country Fund Benchmark
Germany 17.1% 9.0%
France 15.7% 10.6%
United Kingdom 14.8% 13.2%
Switzerland 11.1% 10.2%
Japan 10.3% 26.5%
Spain 6.4% 2.2%
Netherlands 6.0% 4.4%
Italy 5.2% 2.2%
South Korea 4.8% 0.0%
China 2.1% 0.0%
Regional Allocation
  • Europe – other 79.5%
  • Pacific 11.2%
  • Emerging Asia 6.9%
  • North America 1.2%
  • Emerging Latin America 0.8%

Commentary (As of October 31, 2020)

Highlights

  • Optimism surrounding additional fiscal stimulus packages in the US and Europe bolstered equity markets in the first half of October; however, renewed coronavirus lockdowns in several European countries and a surge in cases in the US weakened investor sentiment and developed markets finished the month in negative territory.
  • In the UK, the deadline to negotiate a Brexit deal marches closer without a resolution. Ultimately, we believe that a deal will be reached to prevent a further dampening of the UK economy in the face of the pandemic-induced recession.
  • We believe that undervaluation alone is never enough, so we seek businesses that have used this crisis to reduce their cost bases by unprecedented levels, which should reinvigorate earnings as demand improves.

Portfolio attribution

Causeway International Value Fund (“Fund”) underperformed the Index during the month, due primarily to stock selection. Fund holdings in the insurance, pharmaceuticals & biotechnology, software & services, food beverage & tobacco, and consumer durables & apparel industry groups detracted from performance relative to the Index. Holdings in the capital goods, technology hardware & equipment, transportation, and media & entertainment industry groups, as well as an underweight position in the commercial & professional services industry group, offset some of the underperformance versus the Index. The largest detractor from performance was business software & services provider, SAP SE (Germany). Additional notable detractors included Takeda Pharmaceutical Co., Ltd. (Japan), diversified chemicals manufacturer, BASF SE (Germany), banking & financial services company, UniCredit S.p.A. (Italy), and insurer, AXA SA (France). The top contributor to return was jet engine manufacturer, Rolls-Royce Holdings Plc (United Kingdom). Other notable contributors included robotics manufacturer, FANUC Corp. (Japan), banking & financial services company, Barclays Plc (United Kingdom), banking & financial services company, Grupo Financiero Banorte SAB de CV (Mexico), and electronic components manufacturer, Murata Manufacturing Co., Ltd. (Japan).

Investment outlook

We currently expect an end to the extremely negative economic effects wrought on the global economy by the pandemic in 2021, facilitated by widely available and efficacious testing, therapies, and potential vaccines. We used October’s weakness in COVID-sensitive stocks to add to positions that we believe have some of the highest expected returns in the portfolio. With no relief from the pandemic thus far in early November, market participants have sold several stocks that we consider having significant potential upside from current prices. Some of our favorites include well-managed travel and aerospace equipment-related businesses, as well as those in travel software & services. In financials, our investment theses do not depend on rising nominal interest rates for our portfolio companies to perform well. For example, European and Japanese banks and insurance companies have contended with low-to-negative interest rates for the past several years, yet valuations are currently trading at three standard deviations below the post-2008 Global Financial Crisis mean. Several of these banks boast capital positions well in excess of regulatory requirements. As we ultimately exit the COVID-19 crisis, we expect these financials to rebound in profitability. That recovery, combined with financial strength, provides the potential for these stocks to re-rate upward. Our analysis indicates that these companies are well-positioned to return excess capital to shareholders. We believe that undervaluation alone is never enough, so we seek businesses that have used this crisis to reduce their cost bases by unprecedented levels, which should reinvigorate earnings as demand improves. Well-managed cyclical stocks trade at prices that imply permanent demand destruction, and the COVID-19 pandemic presents, in our view, a once-in-a-generation opportunity for disciplined value investors.

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: