Seeking value primarily in the non-US developed markets

The International Value Select portfolio is constructed from an equity universe composed of companies with market capitalizations typically greater than $5 billion located in non-US developed and emerging market countries. The strategy uses our international value equity strategy with two distinctions: the select portfolio has greater liquidity (by way of investing in larger capitalization companies) and fewer holdings. We believe that concentrating the holdings can compensate for the loss of small/mid cap exposure. The investment process comprises three stages: quantitative screening and initial analysis, fundamental research, and portfolio construction.

Benchmark
MSCI EAFE
Inception
March 31, 2005
Download Profile Sheet Download Flash Report Download Quarterly Review Risk Disclosures
Contact Us

Strategy overview

The portfolio managers discuss our International Value Select 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

QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) -0.6%2.6%10.6%8.0%9.4%6.0%7.0%
Strategy (net) -0.7%2.4%10.2%7.6%9.0%5.6%6.6%
MSCI EAFE -2.5%3.3%9.8%3.4%6.7%4.9%5.5%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) -0.6%2.6%10.6%8.0%9.4%6.0%7.0%
Strategy (net) -0.7%2.4%10.2%7.6%9.0%5.6%6.6%
MSCI EAFE -2.5%3.3%9.8%3.4%6.7%4.9%5.5%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 3.2%3.2%16.2%8.7%10.0%6.2%7.1%
Strategy (net) 3.1%3.1%15.8%8.3%9.6%5.8%6.7%
MSCI EAFE 5.9%5.9%15.9%5.3%7.9%5.3%5.7%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 3.2%3.2%16.2%8.7%10.0%6.2%7.1%
Strategy (net) 3.1%3.1%15.8%8.3%9.6%5.8%6.7%
MSCI EAFE 5.9%5.9%15.9%5.3%7.9%5.3%5.7%
Fund 202320222021202020192018201720162015201420132012201120102009
Strategy (gross) 29.5%-6.7%10.4%6.9%21.2%-17.2%29.5%1.5%-1.3%-4.3%27.2%24.7%-9.6%13.2%35.4%
Strategy (net) 29.1%-7.1%10.0%6.5%20.8%-17.5%29.1%1.1%-1.7%-4.7%26.8%24.3%-9.9%12.7%34.8%
MSCI EAFE 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%
Strategy (gross)
Strategy (net)
MSCI EAFE
202320222021202020192018201720162015201420132012201120102009
29.5%-6.7%10.4%6.9%21.2%-17.2%29.5%1.5%-1.3%-4.3%27.2%24.7%-9.6%13.2%35.4%
29.1%-7.1%10.0%6.5%20.8%-17.5%29.1%1.1%-1.7%-4.7%26.8%24.3%-9.9%12.7%34.8%
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%

Portfolio (as of April 30, 2024)

Benchmark: MSCI EAFE
Asset Allocation
Strategy
Stocks 97.6%
Cash 2.4%
Strategy Characteristics
Strategy Benchmark
No. of holdings 61 766
Weighted avg. market cap (US $MM) $78,732 $83,074
FY2 price/earnings 11.2 13.3
Price/book value 1.7 1.9
Dividend yield (%) 3.2 3.0
TOP 10 HOLDINGS
Security Country Percent
Rolls-Royce Holdings Plc United Kingdom 4.9%
Samsung Electronics Co., Ltd. South Korea 4.0%
Barclays PLC United Kingdom 3.4%
Shell United Kingdom 3.3%
BP Plc United Kingdom 3.2%
Koninklijke Philips NV Netherlands 2.8%
AstraZeneca PLC United Kingdom 2.8%
Reckitt Benckiser Group United Kingdom 2.7%
Roche Holding AG Switzerland 2.7%
Alstom SA France 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 Strategy Benchmark
Industrials 17.5% 17.0%
Financials 16.6% 19.4%
Health Care 14.2% 13.0%
Information Technology 13.5% 8.9%
Consumer Staples 12.7% 8.6%
Energy 6.5% 4.4%
Utilities 4.5% 3.2%
Consumer Discretionary 3.8% 12.1%
Materials 3.6% 7.3%
Communication Services 3.4% 3.9%
Real Estate 1.2% 2.3%
TOP 10 COUNTRIES
Country Strategy Benchmark
United Kingdom 34.1% 15.2%
France 14.3% 12.1%
Japan 9.5% 23.1%
Germany 7.7% 8.6%
Netherlands 6.9% 5.0%
Italy 4.8% 2.8%
South Korea 4.5% 0.0%
Switzerland 4.4% 9.1%
Spain 3.3% 2.7%
Belgium 1.8% 0.9%
Regional Allocation
  • Europe – other 78.7%
  • Pacific 15.6%
  • North America 1.6%
  • Emerging Asia 1.2%
  • Emerging Latin America 0.5%

Commentary (As of April 30, 2024)

Highlights

  • After posting strong gains in the first quarter of 2024, developed equity markets pulled back in April. Emerging markets outperformed developed, appreciating over the month.
  • European equities, on a sector-neutral basis, are trading at valuation discounts to the US not seen since sovereign debt concerns roiled the region in 2011. We are increasing exposure to well-vetted European-listed stocks across various sectors, including information technology, materials, industrials, and consumer discretionary.
  • We continue to identify companies we believe are creating value in their businesses through operational restructuring. Conservative assumptions and our interactions with company managements build our conviction in the share price upside from strengthening underearning businesses, generating more cash flow, and increasing profitability.

Portfolio Attribution

The Portfolio outperformed the Index during the month, due primarily to stock selection. Portfolio holdings in the health care equipment & services, banks, and semiconductors & semi equipment industry groups contributed to relative performance. Holdings in the transportation, technology hardware & equipment, and materials industry groups offset some of the outperformance compared to the Index. The top contributor to return was healthcare equipment & services provider, Koninklijke Philips NV (Netherlands). Other notable contributors included banking & financial services company, Barclays PLC (United Kingdom), and pharmaceutical company, AstraZeneca PLC (United Kingdom). The largest detractor was electronic equipment manufacturer, Samsung Electronics Co., Ltd. (South Korea). Additional notable detractors included multinational luxury conglomerate, Kering SA (France), and jet engine manufacturer, Rolls-Royce Holdings Plc (United Kingdom).

Quarterly Investment Outlook

European equities, on a sector-neutral basis, are trading at valuation discounts to the US not seen since sovereign debt concerns roiled the region in 2011. We are increasing exposure to well-vetted European-listed stocks across various sectors, including information technology, materials, industrials, and consumer discretionary. Valuations in Japan have risen, catalyzed by earnings upgrades in certain export-related industries, capital inflows redirected away from Chinese markets, and optimism for improving corporate governance. Causeway’s investment team remains focused on identifying long-term winners in Japan’s efforts to improve shareholder returns, conducting more than ten research trips there over the past three quarters. However, the long-term challenges persist, namely, delivering consistently improving returns on capital.

We continue to identify companies we believe are creating value in their businesses through operational restructuring. Conservative assumptions and our interactions with company managements build our conviction in the share price upside from strengthening underearning businesses, generating more cash flow, and increasing profitability. In our clients' fundamental portfolios, we aim to balance these restructuring holdings with competitively positioned companies, such as those operating in oligopolistic markets with sustained pricing power, trading at reasonable valuations. Given positive real interest rates in most regions, dividends and buybacks currently are an especially meaningful component of total return. Though we reduced client exposure to banks during the quarter, we hold those with the highest risk-adjusted returns and anticipate portfolios should continue to benefit from their capital return programs. Positive real interest rates should continue to support our value investment style underpinned by our rigorous fundamental research.

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].