Seeking diversified exposure to international small cap companies
The international small cap strategy invests primarily in common stocks of companies with smaller market capitalizations located in developed and emerging markets outside the US. The portfolio normally invests at least 80% of its total assets in equity securities of companies with smaller market capitalizations. Smaller market capitalization companies are companies with market capitalizations that do not exceed the highest market capitalization of a company within the portfolio’s benchmark, the MSCI ACWI ex USA Small Cap Index (Gross), at the time of purchase. Some of these companies, although small by US standards, might be large companies in their local markets. The portfolio may continue to hold securities of a company that appreciate above the smaller market capitalization threshold and thus may from time to time hold less than 80% of its total assets in equity securities of companies with smaller market capitalizations. The portfolio may invest in a wide range of industries.
- Benchmark
- MSCI AC World ex USA Small Cap
- Inception
- November 30, 2014
Portfolio managers
Joe Gubler, CFA
Mr. Gubler is a quantitative portfolio manager at Causeway. He joined the firm in 2005 and has been a portfolio manager since January 2014. In addition to managing quantitative portfolios and conducting alpha research, Mr. Gubler also leads the efforts to maintain and enhance Causeway’s proprietary risk models. He is also a member of the operating committee.
From 1999 to 2005, Mr. Gubler worked as a software engineer, with employers ranging from startups to established businesses such as Monster.com. From 1998 to 1999, Mr. Gubler worked as a staff scientist for News Corporation, conducting studies on the RF propagation of broadcast signals. While studying astrophysics at UC San Diego, Mr. Gubler worked as a graduate research assistant in the Jet Propulsion Laboratory's stellar interferometry group.
Mr. Gubler earned a BS, cum laude, in physics from UC Irvine, an MS in physics from UC San Diego, and an MBA from the UCLA Anderson Graduate School of Management. Mr. Gubler is a CFA charterholder.
Arjun Jayaraman, PhD, CFA
Quantitative Portfolio Manager
Dr. Jayaraman is a director, quantitative portfolio manager and head of the quantitative research at Causeway and has been with the firm since January 2006. Dr. Jayaraman’s responsibilities and research include stock selection, asset allocation, risk model development, and portfolio construction.
From 2004 to 2005, Dr. Jayaraman was a portfolio manager at PanAgora Asset Management. He was the lead portfolio manager on the non-U.S. large cap core equity portfolios and was the co-portfolio manager on the global large cap core equity portfolios. From 2000 to 2004, Dr. Jayaraman managed the same portfolios at Putnam Investments, in addition to working closely with the teams that managed Putnam's traditional non-U.S. strategies. From 1998 to 2000, Dr. Jayaraman worked as a quantitative analyst at Harborview Trading Associates.
Dr. Jayaraman earned a PhD from New York University at the Stern School of Business and a BA in economics from Columbia University. Dr. Jayaraman is a CFA charterholder.
MacDuff Kuhnert, CFA
Mr. Kuhnert is a director and a quantitative portfolio manager at Causeway and has been with the firm since its inception in June 2001. Mr. Kuhnert’s responsibilities and research include stock selection, asset allocation, risk model development, and portfolio construction.
From 1996 to 2001, Mr. Kuhnert worked for the international team of the Hotchkis & Wiley division of Merrill Lynch Investment Managers (HW-MLIM) as a quantitative research associate. During his tenure at HW-MLIM, Mr. Kuhnert created and developed advanced quantitative models used in the international value investment process. He also helped develop the team’s first equity risk model.
Mr. Kuhnert earned a BA in chemistry from Dartmouth College. He is a CFA charterholder, a member of the CFA Society of Los Angeles, and a member of the Chicago Quantitative Alliance.
Ryan Myers
Mr. Myers is a quantitative portfolio manager at Causeway. He joined the firm in June 2013 and has been a portfolio manager since January 2021. His responsibilities include alpha research, stock selection, and portfolio construction.
From 2010 to 2012, Mr. Myers served as chief investment officer of Iron Castle Asset Management, an investment partnership focused on mid-cap U.S. equities. From 2007 to 2008, Mr. Myers worked as an analyst at Canyon Partners, where he covered the cable, media, telecom and satellite sectors. From 2005 to 2007, Mr. Myers was an associate for Oaktree Capital Management in the distressed opportunities group. Mr. Myers began his professional career in 2003 as an investment banking analyst at Goldman Sachs in the technology, media and telecom group.
Mr. Myers earned a BA, magna cum laude, in economics from Harvard University, where he was elected to Phi Beta Kappa. He earned an MBA from the Stanford Graduate School of Business, where he was an Arjay Miller Scholar. Mr. Myers currently serves on the Board of Trustees of the Yosemite Conservancy, an organization dedicated to supporting projects and programs that preserve Yosemite National Park and enrich the visitor experience.
Performance
Account returns for the Causeway International Small Cap Composite (“International Small Cap Composite”) are calculated daily. Monthly account returns are calculated by geometrically linking the daily returns. The return of the International Small Composite is calculated monthly by weighting monthly account returns by the beginning market values. Valuations and returns are computed and stated in US dollars. Returns include the reinvestment of interest, dividends and any capital gains. Returns are calculated gross of withholding taxes on dividends, interest income, and capital gains. Past performance is no guarantee of future performance. Gross-of-fees returns are presented before management, performance and custody fees but after trading expenses. Net-of-fees returns are presented after the deduction of actual management fees, performance-based fees, and all trading expenses, but before custody fees. Causeway’s basic management fee schedules are described in its firm brochure pursuant to Part 2 of Form ADV. A complete list and description of firm composites is available upon request. This information supplements the composite presentation at Composite Performance. Investing involves risk including loss of principal. In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Diversification does not prevent all investment losses.
Portfolio (as of November 30, 2025)
Asset Allocation
| Table Header | Strategy |
|---|---|
| Stocks | 98.4% |
| Cash | 1.6% |
Strategy Characteristics
| Table Header | Strategy | Benchmark |
|---|---|---|
| No. of holdings | 137 | 4074 |
| Weighted avg. market cap (US $MM) | $3,367 | $2,628 |
| FY2 price/earnings | 8.9 | 13.5 |
| Price/book value | 1.1 | 1.5 |
| Dividend yield (%) | 3.7 | 2.6 |
TOP 10 HOLDINGS
| Security | Country | Active weight* |
|---|---|---|
| ZIM Integrated Shipping Services Ltd. | Israel | 2.3% |
| Celestica | Canada | 2.1% |
| Unipol Gruppo SpA | Italy | 2.0% |
| National Aluminium Co. Ltd. | India | 2.0% |
| Finning International | Canada | 1.9% |
| JOYY, Inc. | China | 1.9% |
| PT Aneka Tambang Tbk | Indonesia | 1.8% |
| Regis Resources Ltd. | Australia | 1.8% |
| Oceanagold | Canada | 1.8% |
| easyJet Plc | United Kingdom | 1.8% |
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.
*Active defined as Portfolio weight minus MSCI ACWI ex USA Small Cap Index weight. Holdings are subject to change.
SECTOR WEIGHTS
| Sector | Strategy | Benchmark |
|---|---|---|
| Industrials | 25.2% | 20.1% |
| Information Technology | 15.5% | 11.3% |
| Materials | 12.8% | 12.9% |
| Financials | 9.3% | 11.9% |
| Consumer Discretionary | 8.5% | 11.4% |
| Communication Services | 8.1% | 3.8% |
| Utilities | 5.6% | 3.2% |
| Real Estate | 5.0% | 9.6% |
| Health Care | 4.3% | 6.8% |
| Consumer Staples | 1.9% | 5.4% |
| Equity Funds | 1.3% | 0.0% |
| Energy | 0.9% | 3.6% |
TOP 10 COUNTRIES
| Country | Strategy | Benchmark |
|---|---|---|
| Japan | 20.6% | 22.8% |
| Canada | 11.9% | 7.5% |
| United Kingdom | 8.3% | 8.1% |
| South Korea | 8.1% | 3.9% |
| China | 7.8% | 3.3% |
| Taiwan | 6.9% | 5.6% |
| India | 5.4% | 7.2% |
| Australia | 4.0% | 7.0% |
| Indonesia | 2.7% | 0.7% |
| Israel | 2.7% | 2.8% |
Regional Allocation
- Emerging Asia 33.1%
- Pacific 28.1%
- North America 11.9%
- Europe - Other 11.9%
- Euro 6.7%
- Developed Middle East 2.7%
- Emerging Europe, Middle East, Africa 1.8%
- Multi Region 1.3%
- Emerging Latin America 1.0%
Commentary (As of November 30, 2025)
Highlights
Portfolio Attribution
The Portfolio outperformed the Index during the month. To evaluate stocks in our investible universe, our multi-factor quantitative model employs five bottom-up factor categories – valuation, sentiment, technical indicators, quality, and corporate events – and two top-down factor categories assessing macroeconomic and country aggregate characteristics. All alpha factor categories delivered positive returns in November. Among our bottom-up factor groups, our technical, corporate events, valuation, and sentiment factors posted the most positive monthly returns, and technical is the best-performing bottom-up factor group year-to-date and over the last twelve months. Quality, which is the only factor group that has negative returns year-to-date, also posted positive returns in November. Returns to our macroeconomic and country aggregate factors were positive in November as countries exhibiting more attractive characteristics (such as Japan and Canada) outperformed those with relatively weaker characteristics (such as India and Saudi Arabia). All factor groups remain positive on an inception-to-date basis.
Investment Outlook
On balance, we continue to see positive developments on the corporate governance front in Korea, which is our largest overweight. In early July, the Korean parliament passed an amendment to the Korea Commercial Act, which included important changes including requiring company boards to now consider the interests of minority shareholders and mandating access to remote participation/electronic voting at shareholder meetings. Moreover, multiple bills are now under consideration to encourage companies to cancel treasury shares. Typically, share buybacks by a company are positive for all shareholders. However, Korean companies have historically exploited share buybacks by making them a tool to increase controlling shareholder control by reducing the number of shares owned by minority shareholders. Meanwhile, minority shareholders do not enjoy the earnings accretion benefit of a buyback since the purchased shares still exist in the company’s treasury. The proposed amendment would, once again, make share buybacks positive for minority shareholders.
International small caps (ACWI ex USA Small Cap Index) continue to trade at a rare discount to their larger-cap (ACWI ex USA Index) peers on a forward P/E basis. In addition to the attractive relative valuation of the asset class overall, Causeway’s International Small Cap portfolio also trades at a substantial discount to the Index while simultaneously exhibiting more favorable growth, quality, momentum, and positive estimate revisions than the Index. We believe that this highly attractive combination of characteristics better insulates our portfolio from future volatility.
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].