Emerging Markets UCITS Fund – EUR

Portfolio Attribution

Causeway Emerging Markets UCITS Fund – EUR share class (“Fund”) underperformed the Index in September 2020. We use both bottom-up “stock-specific” and top-down factor categories to seek to forecast alpha for the stocks in the Fund’s investable universe. Our bottom-upearnings growth and price momentum factors were positive indicators during the month. Our bottom-up value factor was a negative indicator in September and it has lagged over most recent periods. Of our top-down factors, our currency and country factors were positive indicators during the month. Our macroeconomic and sector factors were negative indicators.

Investment Outlook

Earnings growth prospects have been improving for many EM companies. Earnings growth upgrades exceed downgrades in more than half of the EM sectors according to analyst forecasts. The sectors experiencing net upgrades include consumer discretionary, communication services, information technology, and materials. Information technology companies have experienced the strongest net upgrades as increased reliance on technology during the pandemic and strong 5G demand have buoyed earnings. Information technology is the Fund’s largest sector overweight due to favorable earnings growth and price momentum characteristics. From a country perspective, companies in the technology-oriented economies of South Korea and Taiwan experienced the strongest net upgrades. Russian companies also experienced strong net upgrades despite declining oil prices. This was primarily attributable to improvement relative to a low baseline as downgrades for many Russian companies were quite pronouncedearlier this year. On the negative side, companies in Thailand experienced substantial net downgrades as tourism has been halted.

Uncertainty surrounding the COVID-19 pandemic has continued to weigh on EM value stocks. Following a poor 2019, the MSCI Emerging Markets Value Index trails the MSCI Emerging Markets Growth Index by 28 percentage points on a local currency basis over the year-to-date period. The MSCI Emerging Markets Value Index is trading near record low valuations based on both price-to-earnings and price-to-book value ratios. We continue to emphasize value factors in our multi-factor investment process and we believe that EM value stocks are poised to rebound once there is a reduction in COVID-19 uncertainty given the discount relative to EM growth stocks. A catalyst for value’s resurgence could be the dissemination of one or more COVID-19 vaccines, many of which are in Phase III trials. We believe that a reduction in other sources of uncertainty, including the US election, should also support value stocks.

Emerging Markets UCITS Fund

Portfolio Attribution

Causeway Emerging Markets UCITS Fund – USD share class (“Fund”) underperformed the Index in September 2020. We use both bottom-up “stock-specific” and top-down factor categories to seek to forecast alpha for the stocks in the Fund’s investable universe. Our bottom-upearnings growth and price momentum factors were positive indicators during the month. Our bottom-up value factor was a negative indicator in September and it has lagged over most recent periods. Of our top-down factors, our currency and country factors were positive indicators during the month. Our macroeconomic and sector factors were negative indicators.

Investment Outlook

Earnings growth prospects have been improving for many EM companies. Earnings growth upgrades exceed downgrades in more than half of the EM sectors according to analyst forecasts. The sectors experiencing net upgrades include consumer discretionary, communication services, information technology, and materials. Information technology companies have experienced the strongest net upgrades as increased reliance on technology during the pandemic and strong 5G demand have buoyed earnings. Information technology is the Fund’s largest sector overweight due to favorable earnings growth and price momentum characteristics. From a country perspective, companies in the technology-oriented economies of South Korea and Taiwan experienced the strongest net upgrades. Russian companies also experienced strong net upgrades despite declining oil prices. This was primarily attributable to improvement relative to a low baseline as downgrades for many Russian companies were quite pronouncedearlier this year. On the negative side, companies in Thailand experienced substantial net downgrades as tourism has been halted.

Uncertainty surrounding the COVID-19 pandemic has continued to weigh on EM value stocks. Following a poor 2019, the MSCI Emerging Markets Value Index trails the MSCI Emerging Markets Growth Index by 28 percentage points on a local currency basis over the year-to-date period. The MSCI Emerging Markets Value Index is trading near record low valuations based on both price-to-earnings and price-to-book value ratios. We continue to emphasize value factors in our multi-factor investment process and we believe that EM value stocks are poised to rebound once there is a reduction in COVID-19 uncertainty given the discount relative to EM growth stocks. A catalyst for value’s resurgence could be the dissemination of one or more COVID-19 vaccines, many of which are in Phase III trials. We believe that a reduction in other sources of uncertainty, including the US election, should also support value stocks.

Global Value UCITS Fund

Portfolio Attribution

Causeway Global Value UCITS Fund – USD share class (“Fund”) underperformed the Index during the month, due primarily to stock selection. Holdings in the energy, media & entertainment, software & services, materials, and automobiles & components industry groups detracted from performance compared to the Index. Fund holdings in the retailing, capital goods, technology hardware & equipment, and food beverage & tobacco industry groups, as well as an underweight position in the consumer durables & apparel industry group, contributed to relative performance. The largest detractor was oil exploration & production company, Ovintiv (Canada). Additional notable detractors included automobile manufacturer, Volkswagen AG (Germany), ViacomCBS, Inc. (United States), diversified chemicals manufacturer, BASF SE (Germany), and banking & financial services company, UniCredit S.p.A. (Italy). The top contributor to return was specialty retail jeweler, Signet Group (United States). Other notable contributors included power & healthcare conglomerate, General Electric Co. (United States), design-to-distribution business process services technology company, SYNNEX Corp. (United States), software giant, Microsoft Corp. (United States), and British American Tobacco plc (United Kingdom).

Investment Outlook

In the prevailing global interest rate environment with the opportunity cost of owning long duration growth stocks low to negative, investors have continued to bid up expensive stocks to even higher valuations. Should these seemingly speculative, currently high valuation stocks fail to live up to their elevated expectations, we anticipate that the stable cash flows of economically sensitive, yet financially robust, companies would attract investor attention. Our fundamental research seeks to identify well-managed companies with strong balance sheets, with company leaders committed to improving earnings. As we wait for these companies to emerge from operational setbacks and reignite growth, they typically generate sufficient cash flow to reward shareholders via dividends and share buybacks. In the current low interest rate environment, we find the income from these undervalued stocks especially compelling as a major component of total return.