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*
+2.37%
Nav*
$13.84, -0.05
Inception
October 26, 2001
Cusip
14949P109
Benchmark
MSCI EAFE
Minimum Investment
$5,000
Sales Charge
None
Total Expense Ratio
1.13%
*As of August 20, 2019

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
Fundamental Portfolio Manager

Performance

QTDYTD1 year3 years5 years10 yearsSince inception
Fund-2.6%7.3%-9.9%4.4%0.2%5.6%6.4%
MSCI EAFE-1.3%13.1%-2.1%7.4%2.9%6.3%6.2%
QTDYTD1 year3 years5 years10 yearsSince inception
Fund-2.6%7.3%-9.9%4.4%0.2%5.6%6.4%
MSCI EAFE-1.3%13.1%-2.1%7.4%2.9%6.3%6.2%
QTDYTD1 year3 years5 years10 yearsSince inception
Fund0.0%10.2%-5.0%6.6%0.2%7.1%6.6%
MSCI EAFE4.0%14.5%1.6%9.6%2.7%7.4%6.3%
QTDYTD1 year3 years5 years10 yearsSince inception
Fund0.0%10.2%-5.0%6.6%0.2%7.1%6.6%
MSCI EAFE4.0%14.5%1.6%9.6%2.7%7.4%6.3%
20182017201620152014201320122011201020092008200720062005200420032002
Fund-18.8%27.1%0.2%-3.2%-6.5%23.9%24.2%-10.8%12.0%32.0%-42.1%7.6%25.7%7.9%26.3%45.5%-11.2%
MSCI EAFE-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
20182017201620152014201320122011201020092008200720062005200420032002
-18.8%27.1%0.2%-3.2%-6.5%23.9%24.2%-10.8%12.0%32.0%-42.1%7.6%25.7%7.9%26.3%45.5%-11.2%
-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 July 31, 2019)

Benchmark: MSCI EAFE
Asset Allocation
Fund
Stocks97.7%
Cash2.3%
Fund Characteristics
FundBenchmark
No. of holdings 57 923
Weighted avg. market cap (US $MM)$55,678$52,965
FY2 price/earnings10.613.1
Price/book value1.21.6
Net assets$593,889,690-
TOP 10 HOLDINGS
Security Country Percent
Volkswagen AGGermany4.3%
Takeda Pharmaceutical Co., Ltd.Japan3.5%
BASF SEGermany3.4%
UniCredit S.p.A.Italy3.1%
KDDI Corp.Japan3.0%
ABB Ltd.Switzerland3.0%
British American Tobacco plcUnited Kingdom3.0%
Prudential PlcUnited Kingdom3.0%
Linde PlcGermany2.9%
AstraZeneca PlcUnited Kingdom2.9%

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
Financials19.8%18.7%
Industrials17.1%14.7%
Communication Services11.6%5.5%
Health Care10.7%11.3%
Materials9.5%7.2%
Energy9.2%5.4%
Consumer Discretionary6.8%11.2%
Information Technology6.0%6.8%
Consumer Staples5.1%11.9%
Utilities2.0%3.7%
Real Estate0.0%3.6%
TOP 10 COUNTRIES
Country Fund Benchmark
United Kingdom31.0%16.7%
Germany16.0%8.6%
Japan14.1%24.0%
Switzerland6.8%9.3%
France6.2%11.3%
China5.2%0.0%
Canada5.1%0.0%
South Korea4.9%0.0%
Netherlands3.1%3.7%
Italy3.1%2.3%
Regional Allocation
  • Europe – other 68.0%
  • Pacific 14.1%
  • Emerging Asia 10.1%
  • North America 5.1%
  • Emerging Europe, Middle East, Africa 0.3%

Commentary (As of July 31, 2019)

Highlights

  • Following strong performance in the first half of the year, equity markets delivered more muted returns in July. On the back of central banks signaling stimulus, value stock valuation multiples continued to contract while growth stock valuations rose.

Portfolio attribution

Causeway International Value Fund (“Fund”) underperformed the Index during the month, due primarily to stock selection. Fund holdings in the software & services, energy, and materials industry groups, along with an underweight position in the food beverage & tobacco and semiconductors & semi equipment industry groups, detracted from relative performance. Holdings in the capital goods, automobiles & components, and insurance industry groups, as well as an underweight position in the household & personal products and real estate industry groups, contributed to relative performance. The largest detractor was enterprise infrastructure software company, Micro Focus International Plc (United Kingdom). Additional notable detractors included diversified chemicals manufacturer, BASF SE (Germany), Takeda Pharmaceutical Co., Ltd. (Japan), business software & services provider, SAP SE (Germany), and mobile telecommunications operator, China Mobile Ltd. (China). The top contributor to return was aerospace & defense manufacturer, Cobham Plc (United Kingdom). Other notable contributors included telecommunication services provider, Vodafone Group (United Kingdom), pharmaceutical company, AstraZeneca Plc (United Kingdom), property & casualty insurer, Sompo Holdings, Inc. (Japan), and telecommunication services provider, KDDI Corp. (Japan).

Investment outlook

On the back of central banks signaling stimulus, value stock valuation multiples continued to contract in July while growth stock valuations rose. Central bank liquidity and momentum-driven investing trends continue to support long duration equities. We believe that additional accommodative central bank policies may already be priced into growth stocks. The de-rating of value has resulted in current market multiples for MSCI Value indices implying negative perpetuity earnings growth rates across geographies, even as the world economy is forecast to grow. We find such pessimism towards value stocks to be unwarranted, especially considering that the earnings of value stocks have outpaced those of growth stocks since the Global Financial Crisis. We believe that value stocks that have improved their earnings growth should re-rate as investors consider fundamentals rather than trade price momentum. In such a long period of falling interest rates, some companies with longer duration cash flows have become highly levered. If policy action cannot drive a meaningful improvement in economic data and downside risks materialize even marginally, companies exhibiting balance sheet strength should fare better than those with excess debt levels. Rather than trying to time monetary policy, we are remaining disciplined in our bottom-up valuation process. We seek to identify companies committed to improving free cash flow generation and rewarding shareholders via dividends and buybacks.

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

DividendsShort-term capital gainsLong-term capital gains
2018$0.3394$0.0000$0.1083
2017$0.2972$0.0000$0.0000
2016$0.2619$0.0000$0.0000
2015$0.2382$0.0000$0.0000
2014$0.3395$0.0000$0.0000
2013$0.1315$0.0000$0.0000
2012$0.2502$0.0000$0.0000
2011$0.3540$0.0000$0.0000
2010$0.1625$0.0000$0.0000
2009$0.1672$0.0000$0.0000
2008$0.4799$0.0000$0.4558
2007$0.4051$0.6606$3.3443
2006$0.1856$0.0222$0.8650
2005$0.3366$0.1962$0.3833
2004$0.2380$0.1379$0.3093
2003$0.1618$0.0037$0.0550
2002$0.1068$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: