Seeking value primarily in the non-US developed markets

The international value portfolio is constructed from an equity universe composed of companies with market capitalizations typically greater than $1 billion located throughout the non-US developed and emerging market countries. Through rigorous, bottom-up company analysis, we seek to identify undervalued stocks with upside potential. The investment process comprises three stages: quantitative screening and initial analysis, fundamental research and portfolio construction.

Benchmark
MSCI EAFE
Inception
June 11, 2001
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Strategy overview

The portfolio managers discuss our International Value strategy.

Portfolio managers

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

Performance

Table Header QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 1.1%22.8%19.3%20.9%17.2%8.1%8.5%
Strategy (net) 1.0%22.6%18.9%20.5%16.7%7.7%8.1%
MSCI EAFE -1.4%18.3%13.3%14.2%10.9%6.7%6.1%
Table Header QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 1.1%22.8%19.3%20.9%17.2%8.1%8.5%
Strategy (net) 1.0%22.6%18.9%20.5%16.7%7.7%8.1%
MSCI EAFE -1.4%18.3%13.3%14.2%10.9%6.7%6.1%
Table Header QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 11.0%21.5%23.1%21.7%17.1%8.2%8.5%
Strategy (net) 10.9%21.3%22.7%21.3%16.6%7.8%8.1%
MSCI EAFE 12.1%19.9%18.3%16.6%11.7%7.0%6.2%
Table Header QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 11.0%21.5%23.1%21.7%17.1%8.2%8.5%
Strategy (net) 10.9%21.3%22.7%21.3%16.6%7.8%8.1%
MSCI EAFE 12.1%19.9%18.3%16.6%11.7%7.0%6.2%
Fund 20242023202220212020201920182017201620152014201320122011201020092008200720062005200420032002
Strategy (gross) 5.9%29.0%-7.2%10.5%6.1%22.5%-18.0%28.6%1.1%-1.9%-4.6%27.6%24.6%-10.2%13.9%37.7%-43.0%9.8%27.5%9.0%29.5%48.4%-8.9%
Strategy (net) 5.5%28.5%-7.6%10.1%5.6%22.0%-18.4%28.0%0.7%-2.3%-5.0%27.1%24.1%-10.5%13.4%37.1%-43.2%9.4%27.0%8.5%29.0%47.8%-9.2%
MSCI EAFE 4.3%18.9%-14.0%11.8%8.3%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%
Table Header
Strategy (gross)
Strategy (net)
MSCI EAFE
20242023202220212020201920182017201620152014201320122011201020092008200720062005200420032002
5.9%29.0%-7.2%10.5%6.1%22.5%-18.0%28.6%1.1%-1.9%-4.6%27.6%24.6%-10.2%13.9%37.7%-43.0%9.8%27.5%9.0%29.5%48.4%-8.9%
5.5%28.5%-7.6%10.1%5.6%22.0%-18.4%28.0%0.7%-2.3%-5.0%27.1%24.1%-10.5%13.4%37.1%-43.2%9.4%27.0%8.5%29.0%47.8%-9.2%
4.3%18.9%-14.0%11.8%8.3%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, 2025)

Benchmark: MSCI EAFE
Asset Allocation
Table Header Strategy
Stocks 98.8%
Cash 1.2%
Strategy Characteristics
Table Header Strategy Benchmark
No. of holdings 70 695
Weighted avg. market cap (US $MM) $71,386 $82,946
FY2 price/earnings 11.5 14.0
Price/book value 1.5 2.0
Dividend yield (%) 2.7 3.0
TOP 10 HOLDINGS
Security Country Percent
Rolls-Royce Holdings Plc United Kingdom 4.0%
Kering SA France 3.9%
Alstom SA France 3.8%
Samsung Electronics Co., Ltd. South Korea 3.5%
Barclays PLC United Kingdom 3.3%
Reckitt Benckiser Group Plc United Kingdom 3.3%
Renesas Electronics Corp. Japan 3.1%
AstraZeneca PLC United Kingdom 2.7%
Akzo Nobel Netherlands 2.5%
Canadian Pacific Kansas City Ltd. Canada 2.4%

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 18.6% 23.8%
Industrials 17.8% 19.0%
Information Technology 14.3% 8.5%
Health Care 12.3% 11.2%
Consumer Staples 9.4% 8.0%
Consumer Discretionary 8.8% 9.8%
Materials 7.7% 5.6%
Utilities 3.7% 3.5%
Communication Services 3.3% 5.4%
Energy 1.9% 3.2%
Real Estate 0.9% 1.9%
TOP 10 COUNTRIES
Country Strategy Benchmark
United Kingdom 29.4% 14.6%
France 18.5% 11.1%
Japan 11.2% 21.8%
Germany 8.7% 10.4%
Netherlands 7.0% 4.7%
South Korea 5.2% 0.0%
Italy 3.4% 3.1%
Canada 3.2% 0.0%
United States 2.7% 0.0%
Belgium 2.5% 1.0%
Regional Allocation
  • Euro 40.2%
  • Europe - Other 34.1%
  • Pacific 12.2%
  • Emerging Asia 6.4%
  • North America 5.9%
  • Emerging Latin America 0.0%

Commentary (As of June 30, 2025)

Highlights

  • International equity markets continued their upward trajectory in June.
  • Causeway’s global and international value portfolios focus on identifying undervalued stocks rather than positioning around macroeconomic trends. Despite the narrowing valuation gap between U.S. and non-U.S. markets, we continue to see compelling investment opportunities across international markets.
  • Our focus remains on identifying companies that offer durable value, characterized by pricing power, iconic brands, or robust product pipelines.

Portfolio Attribution

The Portfolio outperformed the Index during the month, due primarily to stock selection. Portfolio holdings in the consumer durables & apparel, consumer services, and technology hardware & equipment industry groups contributed to relative performance. Holdings in the pharmaceuticals & biotechnology, semiconductors & semi equipment, and transportation industry groups offset some of the outperformance compared to the Index. The top contributor to return was jet engine manufacturer, Rolls-Royce Holdings Plc (United Kingdom). Other notable contributors included multinational luxury conglomerate, Kering SA (France), and cruise ship operator, Carnival Corp. (United States). The largest detractor was alcoholic beverage distributor, Diageo Plc (United Kingdom). Additional notable detractors included payment service provider, Worldline SA (France), and pharmaceutical company, AstraZeneca PLC (United Kingdom).

Investment Outlook

The de-escalation of tariff threats has been instrumental in alleviating global trade tensions. Additionally, the removal of Section 899 from the U.S. federal budget, along with other nations’ decision to refrain from imposing extraterritorial taxes on U.S. firms, has further eased tensions. Combined with stable crude oil prices and the absence of significant domestic labor shortages, U.S. inflationary pressures have remained stable.

In Europe, we anticipate substantial economic benefits to begin materializing in 2026, as both the public and private sectors intensify investments in defense, security, energy, and infrastructure. The region’s initiatives to harmonize regulations and establish a unified, liquid capital market have the potential to significantly accelerate innovation and drive sustained economic growth. Moreover, the trade-weighted U.S. dollar has declined to early 2022 levels, erasing its late 2024 gains. Continued depreciation could provide even more currency boost to dollar-based investors’ foreign holdings.

Causeway’s global and international value portfolios focus on identifying undervalued stocks rather than positioning around macroeconomic trends. Despite the narrowing valuation gap between U.S. and non-U.S. markets, we continue to see compelling investment opportunities across international markets. Our focus remains on identifying companies that offer durable value, characterized by pricing power, iconic brands, or robust product pipelines. Even the highest quality businesses can encounter temporary dislocations, which we view as opportunities to increase positions at attractive valuations. Recent external shocks have created such opportunities among select-high quality companies. The pharmaceutical industry faces a considerable list of challenges including US pricing, global trade restrictions, China’s economic slowdown, and uncertainties in drug pipelines. These challenges have created, in our view, value opportunities in some of the world’s top pharmaceutical firms where we remain confident in their ability to sustain cash flow, profit margins, and innovation over time. If European leaders implement the competitiveness reforms proposed by Mario Draghi last year, our existing two-year price targets could prove conservative, particularly for portfolio holdings most sensitive to European economic growth. We continue to take a disciplined approach, favoring investments at current valuations rather than paying a premium for potential future positive developments. Across sectors, Causeway targets companies we believe are improving efficiency, driving earnings, and boosting cash flows.

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].