Combining our time-tested abilities in developed and emerging international markets

The Causeway International Opportunities strategy is a blend of Causeway’s best skills, combining our international value (bottom-up, fundamental, developed international markets, excluding the US) and emerging markets (quantitatively managed with a targeted tracking error of 5%) equity strategies. Tracking error is a measurement of dispersion from a benchmark index. Our quantitative research team developed a proprietary multi-factor model that measures the relative attractiveness of emerging markets, and guides the portfolio managers in tactically allocating between the developed and emerging portfolio segments.

Benchmark
MSCI ACWI ex US
Inception
June 30, 2007
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Strategy overview

The portfolio managers discuss our International Opportunities strategy.

Portfolio managers

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

Performance

Table Header QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 7.1%7.1%13.0%11.5%16.6%6.6%5.2%
Strategy (net) 7.0%7.0%12.5%11.0%16.1%6.2%4.8%
MSCI ACWI ex US 5.4%5.4%6.6%5.0%11.5%5.5%3.4%
Table Header QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 7.1%7.1%13.0%11.5%16.6%6.6%5.2%
Strategy (net) 7.0%7.0%12.5%11.0%16.1%6.2%4.8%
MSCI ACWI ex US 5.4%5.4%6.6%5.0%11.5%5.5%3.4%
Table Header QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 7.1%7.1%13.0%11.5%16.6%6.6%5.2%
Strategy (net) 7.0%7.0%12.5%11.0%16.1%6.2%4.8%
MSCI ACWI ex US 5.4%5.4%6.6%5.0%11.5%5.5%3.4%
Table Header QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 7.1%7.1%13.0%11.5%16.6%6.6%5.2%
Strategy (net) 7.0%7.0%12.5%11.0%16.1%6.2%4.8%
MSCI ACWI ex US 5.4%5.4%6.6%5.0%11.5%5.5%3.4%
Fund 20242023202220212020201920182017201620152014201320122011
Strategy (gross) 10.0%24.8%-11.1%8.0%6.5%23.4%-17.9%31.8%1.9%-4.0%-3.9%22.2%26.0%-11.7%
Strategy (net) 9.5%24.3%-11.4%7.6%6.1%22.9%-18.2%31.3%1.5%-4.4%-4.2%21.7%25.5%-12.0%
MSCI ACWI ex US 6.1%16.2%-15.6%8.3%11.1%22.1%-13.8%27.8%5.0%-5.3%-3.4%15.8%17.4%-13.3%
Table Header
Strategy (gross)
Strategy (net)
MSCI ACWI ex US
20242023202220212020201920182017201620152014201320122011
10.0%24.8%-11.1%8.0%6.5%23.4%-17.9%31.8%1.9%-4.0%-3.9%22.2%26.0%-11.7%
9.5%24.3%-11.4%7.6%6.1%22.9%-18.2%31.3%1.5%-4.4%-4.2%21.7%25.5%-12.0%
6.1%16.2%-15.6%8.3%11.1%22.1%-13.8%27.8%5.0%-5.3%-3.4%15.8%17.4%-13.3%

Portfolio (as of March 31, 2025)

Benchmark: MSCI ACWI ex US
Asset Allocation
Table Header Strategy
Stocks 98.2%
Cash 1.8%
Strategy Characteristics
Table Header Strategy Benchmark
No. of holdings 245 1982
Weighted avg. market cap (US $MM) $77,774 $87,278
FY2 price/earnings 10.2 12.5
Price/book value 1.5 1.9
Dividend yield (%) 2.9 2.9
TOP 10 HOLDINGS
Security Country Percent
Alstom SA France 3.0%
Kering SA France 3.0%
Rolls-Royce Holdings Plc United Kingdom 2.9%
Reckitt Benckiser Group Plc United Kingdom 2.7%
Barclays PLC United Kingdom 2.6%
AstraZeneca PLC United Kingdom 2.4%
Renesas Electronics Corp. Japan 2.2%
Roche Holding AG Switzerland 2.1%
Canadian Pacific Kansas City Ltd. Canada 2.1%
Prudential Plc United Kingdom 1.9%

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 Strategy Benchmark
Financials 20.5% 24.8%
Industrials 16.0% 14.0%
Information Technology 13.3% 12.3%
Consumer Discretionary 11.7% 10.6%
Health Care 10.9% 8.7%
Consumer Staples 8.2% 6.9%
Communication Services 6.0% 6.6%
Materials 5.2% 6.3%
Utilities 2.6% 3.1%
Real Estate 1.4% 1.7%
Equity Funds 1.0% 0.0%
Energy 0.9% 5.0%
TOP 10 COUNTRIES
Country Strategy Benchmark
United Kingdom 24.3% 9.6%
France 13.9% 7.3%
China 9.8% 9.2%
Japan 8.2% 13.7%
Germany 6.7% 6.3%
Netherlands 5.3% 2.8%
Taiwan 5.0% 4.9%
India 4.2% 5.4%
South Korea 3.7% 2.6%
Italy 3.1% 1.9%
Regional Allocation
  • EURO 31.0%
  • EUROPE – OTHER 27.6%
  • EMERGING ASIA 23.4%
  • PACIFIC 9.4%
  • NORTH AMERICA 2.6%
  • EMERGING EUROPE, MIDDLE EAST, AFRICA 2.4%
  • EMERGING LATIN AMERICA 1.3%
  • MULTI REGION EMERGING 0.0%

Commentary (As of March 31, 2025)

Highlights

  • Global equity markets began the year on an optimistic note, but US stocks faltered amid tax policy uncertainty and shifting tariff pronouncements. Non-US equities outperformed for the month, led by gains in European financials and industrials.
  • De-globalization and tariffs appear likely to dampen real growth, increase inflationary pressures, and create sector-level dislocations. However, these disruptions can generate mispricing and opportunities for active investors. Despite the likelihood of a more difficult economic environment ahead, we remain optimistic that we can exploit share price weakness in desirable stocks to upgrade portfolios.
  • This period of market dislocation provides an opportunity to add to positions in companies we believe will overcome tariffs and produce attractive multi-year returns. Companies with few competitors and strong pricing power have become especially valuable in this environment.

Portfolio Attribution

The Portfolio underperformed the Index during the month, due primarily to stock selection. Portfolio holdings in the consumer durables & apparel and consumer services industry groups, along with an overweight position in the semiconductors & semi equipment industry group, detracted from relative performance. Holdings in the pharmaceuticals & biotechnology, financial services, and insurance industry groups offset some of the underperformance compared to the Index. The largest detractor was multinational luxury conglomerate, Kering SA (France). Additional notable detractors included semiconductor company, Renesas Electronics Corp. (Japan), and integrated circuit manufacturer, Taiwan Semiconductor Manufacturing Co., Ltd.(Taiwan). The top contributor to return was Asian life insurer, Prudential Plc (United Kingdom). Other notable contributors included banking & financial services company, BNP Paribas SA (France), and electric, gas & renewables power generation & distribution company, Enel SpA (Italy).

Quarterly Investment Outlook

Global trade tensions are escalating, with the trade war introducing significant economic and geopolitical uncertainty. During the quarter, the US placed the most punitive tariffs on China. Meanwhile China is prioritizing economic stability, technological advancement, and domestic consumption to meet its ambitious growth targets. The Portfolio was overweight Chinese stocks as of quarter-end, with the majority of Chinese exposure in communication services and consumption-oriented businesses, which tend to be more domestically-focused and continue to look attractive on both self-relative valuation and growth characteristics. Recognizing the need for greater self-reliance, European leaders have committed to military and economic revitalization. Additionally, Chinese investment in Europe is likely to continue climbing as China diversifies its trade relationships. In contrast, the UK faces stagflation, with the Bank of England cautiously navigating persistent inflation and gilt market volatility amid slowing growth. In EM, Taiwan and South Korea are two of the most externally-exposed economies. In contrast, India may be less exposed as the country has one of the largest tariff differentials between exports to and imports from the United States. As of quarter-end, we were overweight South Korean stocks in the Portfolio due in part to bottom-up valuation and top-down considerations.

De-globalization and tariffs appear likely to dampen real growth, increase inflationary pressures, and create sector-level dislocations. However, these disruptions can generate mispricing and opportunities for active investors. Despite the likelihood of a more difficult economic environment ahead, we remain optimistic that we can exploit share price weakness in desirable stocks to upgrade portfolios. This period of market dislocation provides an opportunity to add to positions in companies we believe will overcome tariffs and produce attractive multi-year returns. Companies with few competitors and strong pricing power have become especially valuable in this environment. Within the developed markets portion of the Portfolio, we focus on identifying undervalued stocks rather than positioning around macroeconomic trends. Despite recent gains, non-US developed markets continue to trade at a significant discount to the US, where indices remain driven by a handful of AI-focused companies. The era of ultra-low interest rates is over, making near-term cash flows more attractive than speculative growth. Certain cyclical stocks now offer some of the lowest valuations since 2020 and are rising in our risk-adjusted return rankings. We are also focusing on companies providing mission-critical services to enterprises, which should see robust order growth regardless of tariff changes. As companies invest in digitalization and cloud transitions, IT Services firms are poised for renewed interest. Across sectors, Causeway targets companies improving efficiency, driving earnings, and boosting cash flow growth.

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 portfolio holdings and characteristics are subject to change. There is no guarantee that any forecasts made will come to pass. The securities identified and described above 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. Past performance does not guarantee future results. For a description of our performance attribution methodology, or to obtain a list showing every holding's contribution to the overall account's performance during the quarter, please contact our product manager, Kevin Moutes, at 310-231-6116 or [email protected].