Diversified exposure to emerging markets, capturing value and growth
The Fund normally invests at least 80% of its total assets in equity securities of companies located in emerging markets and investments that are tied economically to emerging markets, such as common stock, preferred and preference stock, depositary receipts, including American Depositary Receipts, Global Depositary Receipts, European Depositary Receipts, Swedish Depositary Receipts and other types of depositary receipts, real estate investment trusts (“REITs”) and exchange-traded funds (“ETFs”) that invest in emerging markets securities. The Investment Manager primarily invests in common stock, but will use those other security types referred to above if, for example, they provide greater liquidity, the Fund cannot access common stock through a local market, or the yield rate of preferred or preference stock is deemed favourable. Typically, less than 10% of the Fund’s Net Asset Value will be invested in ETFs, and investment in ETFs will be limited to 15% of the Fund’s Net Asset Value.
The Fund generally invests in companies with market capitalisations of US$500 million or greater at the time of investment. However, the Fund may invest in smaller market capitalisation companies if, based on the quantitative investment approach described below, it finds an attractive investment with a lower market capitalisation and sufficient liquidity. The Fund may invest in any industry or sector, but generally will not invest more than 25% of its total assets in the equity securities of companies in a single industry. Typically, the Fund will hold a diversified portfolio of over 80 equity securities.
The Investment Manager uses a quantitative investment approach to purchase and sell equity securities and those other investments as detailed above for the Fund. The Investment Manager’s quantitative investment approach uses a proprietary computer model that analyses historical financial data, or “factors,” to assist in selecting investments as detailed above. The model currently analyses “stock specific” factors relating to valuation, growth, technical indicators (such as stock price momentum), competitive strength, and “top-down” factors relating to macroeconomics, currency, country and economic sector. Currently, the valuation factor category receives the highest overall weight in the model and stock-specific factors comprise approximately 75% of the score for a company. For each stock, the relative weight assigned to each stock-specific factor differs depending on its classification (for example, value, growth, momentum, capitalisation or other classifications). The relative weights of these stock-specific factors are sometimes referred to as “contextual weights.”. As the Investment Manager is continually seeking to improve model performance, the factors and their weightings in the model may change over time, or if the classification of a stock changes. By ranking companies based on a combination of these factors, the Investment Manager seeks to identify a portfolio of investments that will outperform the MSCI EM Index. In addition to its quantitative research, the Investment Manager’s fundamental research analysts review the quantitative outputs to attempt to identify and address special issues, such as significant corporate actions or management changes, which are difficult to detect quantitatively.
Please see the Prospectus and Supplement for more information. Please contact [email protected] for a Fund Application.
- Nav*
- €15.81
- Inception
- February 10, 2016
- ISIN
- IE00BWT3P209
- Benchmark
- MSCIEmergingMarketsinUSD
- Minimum investment
- €1,000,000
- Total expense ratio
- 1.24%
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
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth less than their original cost and current performance may be lower than the performance quoted. Returns greater than one year are average annual total returns. All information is as of the date shown. Investment performance reflects the Investment Manager’s voluntary undertaking to limit ongoing charges during certain periods. In the absence of such voluntary undertaking, total return would be reduced. MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products.
Portfolio (as of October 31, 2023)
Asset Allocation
| Fund | |
|---|---|
| Stocks | 98.5% |
| Cash | 1.5% |
Fund Characteristics
| Fund | Benchmark | |
|---|---|---|
| Holdings | 195 | 1437 |
| Weighted avg. market cap (US $MM) | $54,762 | $64,681 |
| NTM price/earnings | 6.9 | 10.5 |
| Price/book value | 1.1 | 1.6 |
| NTM EPS revision (wtd. avg.) | 9.97 | -0.03 |
| Net assets | $5,409,093.63 | - |
TOP 10 ACTIVE HOLDINGS
| Security | Country | Active weight* |
|---|---|---|
| Banco do Brasil SA | Brazil | 1.9% |
| China Construction Bank Corp. | China | 1.9% |
| PetroChina Co., Ltd. | China | 1.8% |
| Kia Corp. | South Korea | 1.8% |
| Agricultural Bank Of China | China | 1.2% |
| Oil & Natural Gas Corp. Ltd. | India | 1.2% |
| REC Ltd. | India | 1.2% |
| Vipshop Holdings | China | 1.1% |
| Cosco Shipping Holdings Co | China | 0.9% |
| Bank of Baroda | India | 0.8% |
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. “Earnings-per-share” is the portion of a company’s profit allocated to each outstanding share of common stock. “Earnings-per-share year-over-year estimate growth (next 12 months)” is the average next-12-months earnings-per-share estimate from one year ago for an individual company compared with that estimate today; note that this calculation is done on a company-by-company basis and is aggregated through a weighted average based on the individual company’s weight in the corresponding index. Also note that this characteristic is supplied directly by MSCI.
*Active defined as Fund weight minus MSCI EM Index weight. Holdings are subject to change.
SECTOR WEIGHTS
| Sector | Fund | Benchmark |
|---|---|---|
| Information Technology | 20.9% | 20.6% |
| Financials | 18.2% | 22.4% |
| Consumer Discretionary | 16.6% | 13.6% |
| Industrials | 12.1% | 6.4% |
| Energy | 8.2% | 5.3% |
| Communication Services | 8.0% | 9.4% |
| Consumer Staples | 4.3% | 6.2% |
| Health Care | 3.6% | 4.0% |
| Utilities | 2.8% | 2.6% |
| Materials | 2.6% | 7.8% |
| Real Estate | 1.0% | 1.7% |
TOP 10 COUNTRIES
| Country | Strategy | Benchmark |
|---|---|---|
| China | 31.8% | 29.9% |
| India | 18.3% | 15.9% |
| South Korea | 15.9% | 11.8% |
| Taiwan | 15.8% | 15.1% |
| Brazil | 5.5% | 5.4% |
| Turkey | 2.3% | 0.7% |
| Saudi Arabia | 1.9% | 4.2% |
| Indonesia | 1.7% | 1.9% |
| Mexico | 1.4% | 2.4% |
| Thailand | 1.3% | 1.9% |
Regional Allocation
- Emerging Asia 84.8%
- Emerging Latin America 6.9%
- Emerging Europe, Middle East, Africa 6.7%
Documents
Fund information:
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Consent to electronic delivery
By clicking Submit, you consent to the electronic delivery, via download from this website, of the Causeway Fund's prospectuses, privacy policies, account applications, IRA Disclosure Statement(s), IRA Custodial Agreement(s) and any other materials that may be required in connection with the information you requested, on the terms set forth below. You also agree to read these documents before investing, and agree to the terms contained in these documents, particularly the prospectus.
ACCESS TO ONLINE DOCUMENTS
To view and print the documents, you will need Adobe Acrobat Reader. If you do not have Acrobat Reader, you can download it for free at www.adobe.com. If you are unable to download, view, or print the documents, contact Causeway Funds at 866-947-7000 for assistance or to request a free paper copy of any of these documents.
Commentary (As of October 31, 2023)
Highlights
Portfolio Attribution
On a gross return basis, Fund holdings in the emerging Asia region detracted from relative performance, primarily attributable to negative stock selection in Taiwan and China. In emerging Europe, Middle East, and Africa (“EMEA”), underweight positions in Turkey and Poland detracted from relative performance. Stock selection in Brazil contributed to relative performance in emerging Latin America. From a sector perspective, information technology, industrials, and health care were the largest detractors from relative performance. Consumer discretionary and materials were the top contributors to relative performance in October. The largest stock-level detractors from relative performance included overweight positions in oil & gas producer, PetroChina Co., Ltd. (China), construction equipment manufacturer, Hyundai Doosan Infracore Co., Ltd. (South Korea), and electrical equipment and machinery component manufacturer, LS Corp. (South Korea). The top stock-level contributors to relative performance included overweight positions in bank, Banco do Brasil SA (Brazil), and bank, China Construction Bank Corp. (China), as well as an underweight position in steelmaker, POSCO Holdings Inc. (South Korea).
Economic Outlook
In its September meeting, the US Federal Reserve (“Fed”) left its target interest rate unchanged. However, the yield on the 10-Year US Treasury Note continued to march higher in October, which is helping the Fed achieve its objective of slowing the economy. US inflation appears to be moderating and, while the non-farm payroll report exceeded expectations, it appears that most of the gains came from either government or part-time jobs. We believe the backdrop of slowing inflation, a modestly cooling US job markets, and a flattening US yield curve will provide a tailwind for EM stocks. Most EM currencies rebounded in October. While depreciating EM currencies generally improve export competitiveness for EM countries, the capital flight out of depreciating currencies has historically been a larger driver of EM stock returns in US dollars. Therefore, a rebound of most EM currencies relative to the US dollar should be a positive for many EM stocks.
In China, the largest country within the EM index, authorities announced the approval of 1 trillion yuan in additional Treasury bonds in 2023. The issuance equals approximately 0.8% of China’s gross domestic product and the funds will be used to rebuild areas impacted by recent floods and to improve urban infrastructure. In addition to accommodative monetary policy and measures aimed at supporting the ailing property market, this is the latest action designed to stimulate the economy. We are overweight Chinese stocks in the portfolio due in part to attractive valuations, particularly in the interactive media and consumer discretionary industries.
Investment Outlook
After appearing less attractive for much of the year, earnings growth upgrades for EM equities are becoming more attractive relative to those in ex-US developed markets. Within EM, the energy sector is experiencing the most net upgrades, buoyed by rising oil prices. Asian information technology stocks also have strong net upgrades, due primarily to an improving outlook for large semiconductor stocks. On the negative side, materials stocks are experiencing the most net downgrades due to lackluster demand for most commodities. In the Fund, we are underweight materials stocks due primarily to unattractive growth characteristics. Industrials stocks also have net downgrades, primarily in China and South Korea. In export-oriented South Korea, the downgrades reflect the slowing global economy. In China, the net downgrades are due to both internal and external factors. Within EM, we continue to identify, in our view, attractive investment opportunities in small cap companies. Historically, our investment process has uncovered EM small cap stocks with alpha potential. The Fund’s allocation to small cap stocks was near the high end of the historical range at month-end.
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 Fund holdings and characteristics are subject to change. There is no guarantee that any forecasts made will come to pass. Any securities identified and described in this report 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. Diversification does not protect against market loss. Current and future holdings are subject to risk.