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Emerging Markets Fund

Diversified exposure to emerging markets, capturing value and growth

NAV (as of 29 Apr 2017)

$, 0.00

YTD

0.00%

INCEPTION

30 Mar 2007

TICKER/CUSIP

CEMIX/149498107

Fact Sheet Prospectus

Fund Profile

The Fund normally invests at least 80% of its total assets in equity securities of companies located in emerging (less developed) markets and other investments that are tied economically to emerging markets. Generally these investments include common stock, preferred and preference stock, American Depositary Receipts, European Depositary Receipts, Global Depositary Receipts, and exchange-traded funds (“ETFs”) that invest in emerging markets securities.

The Investment Adviser uses a quantitative investment approach to purchase and sell investments for the Fund. The Investment Adviser’s proprietary computer model analyzes a variety of factors to assist in selecting securities. The model currently analyzes factors relating to valuation, earnings growth, technical indicators, macroeconomics, currency, countries and sectors.

Minimum Investment$1,000,000
Sales ChargeNone
Net Expense Ratio1.18%
Dividend FrequencyAnnual
Capital Gain FrequencyAnnual
BenchmarkMSCI Emerging Markets

Performance

Fund Quarter to Date Year to Date 1 Year3 Year5 Year Since Inception
CEMIX 14.3%14.3%19.9%2.1%2.5%3.9%
MSCI Emerging Markets 11.5%11.5%17.7%1.5%1.2%3.1%
Fund Quarter to Date Year to Date 1 Year3 Year5 Year Since Inception
CEMIX 14.3%14.3%19.9%2.1%2.5%3.9%
MSCI Emerging Markets 11.5%11.5%17.7%1.5%1.2%3.1%

Portfolio

Asset Allocation as of 31 Mar 2017

Stocks 97.2%
Cash 2.8%

Characteristics as of 31 Mar 2017

Causeway MSCI Emerging Markets
No. of Holdings 144 830
Wtd. Avg. Market Cap (Mn $US)$37,162$36,148
NTM Price/Earnings9.212.0
Price/Book Value1.21.6
NTM EPS Revision (Wtd. Avg)12.74.0

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-twelve-month 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.

SECTOR WEIGHTS as of 31 Mar 2017

Information Technology27.64%
Financials23.75%
Energy11.10%
Industrials8.59%
Materials5.31%
Consumer Discretionary5.12%
Utilities3.80%
Consumer Staples3.79%
Telecommunication Services3.12%
Health Care2.55%
Real Estate2.29%
Equity Funds0.09%

(VS. Benchmark)

Information Technology24.48%
Financials24.05%
Energy7.31%
Industrials5.92%
Materials7.47%
Consumer Discretionary10.39%
Utilities2.84%
Consumer Staples6.94%
Telecommunication Services5.64%
Health Care2.40%
Real Estate2.56%
Equity Funds0.00%
Information Technology
Financials
Energy
Industrials
Materials
Consumer Discretionary
Utilities
Consumer Staples
Telecommunication Services
Health Care
Real Estate
Equity Funds
Other

TOP 10 COUNTRIES as of 31 Mar 2017

China26.42%
South Korea17.71%
Taiwan12.34%
India9.64%
Brazil7.18%
Russia5.41%
Thailand4.64%
South Africa3.64%
Malaysia1.89%
Indonesia1.72%
Turkey1.50%
Poland1.37%
Mexico1.25%
United Arab Emirates1.16%
Qatar0.45%
Hungary0.40%
Czech Republic0.35%
Multi-National Emerging (ETF)0.10%
Multi-National Emerging (ETF)0.09%
Peru0.00%
Egypt0.00%
Greece0.00%
Philippines0.00%
Chile0.00%
Colombia0.00%

(VS. Benchmark)

China26.90%
South Korea15.07%
Taiwan12.27%
India8.86%
Brazil7.62%
Russia3.81%
Thailand2.26%
South Africa6.64%
Malaysia2.44%
Indonesia2.51%
Turkey1.04%
Poland1.21%
Mexico3.69%
United Arab Emirates0.75%
Qatar0.80%
Hungary0.28%
Czech Republic0.18%
Multi-National Emerging (ETF)0.00%
Multi-National Emerging (ETF)0.00%
Peru0.37%
Egypt0.13%
Greece0.32%
Philippines1.16%
Chile1.25%
Colombia0.43%
China
South Korea
Taiwan
India
Brazil
Russia
Thailand
South Africa
Malaysia
Indonesia
Turkey
Poland
Mexico
United Arab Emirates
Qatar
Hungary
Czech Republic
Multi-National Emerging (ETF)
Multi-National Emerging (ETF)
Peru
Egypt
Greece
Philippines
Chile
Colombia
Other

TOP 10 ACTIVE HOLDINGS as of 31 Mar 2017

Security Country Industry Active Weight*
China Petroleum & Chemical Corp. China Energy 1.8
PTT Public Co., Ltd. Thailand Energy 1.8
Bank of China Ltd. China Banks 1.7
Investimentos Itau Brazil Banks 1.6
Lukoil Russia Energy 1.4
Hon Hai Precision Industry Co., Ltd. Taiwan Technology Hardware & Equipment 1.2
Sberbank Russia OJSC Russia Banks 1.1
Samsung Electronics Co., Ltd. South Korea Technology Hardware & Equipment 1.1
Korea Electric Power Corp. South Korea Utilities 1.1
China Communications Construction Co. Ltd. China Capital Goods 1.0

*Active defined as Fund weight minus MSCI EM Index weight. Holdings are subject to change.

Approach

We believe the best way to exploit the investment opportunities in emerging markets equities is through a combination of value and growth, and bottom-up and top-down factors. For Causeway Emerging Markets Fund, our quantitative stock selection process is focused on attractively valued companies with superior earnings prospects and positive market sentiment; these companies should produce consistent returns across investment cycles. We use the same approach to select sectors and countries, comparing valuation against earnings growth and market sentiment. At the country level, we also consider the health of the macro-economy. Our quantitative process seeks to combine these factors while attempting to avoid undue sources of risk, which is defined as tracking error (a measurement of dispersion from a benchmark index).

The investment process begins with a liquidity screen on emerging markets equities. Our model creates a return forecast for every stock in the investable universe. We optimize the portfolio weights to maximize portfolio return potential, targeting a 5% tracking error relative to the benchmark MSCI Emerging Markets Index, and subject to additional relative constraints (sector, country, and stock).

Causeway Emerging Markets Fund is a fully invested portfolio of typically 110-150 stocks, with an average 85% annual turnover. Typically, the Fund is undervalued relative to the benchmark on a number of metrics, with greater earnings growth expectations.

Commentary

PERFORMANCE REVIEW for the month ended 31 Mar 2017


Emerging markets equities increased their gains in March 2017. The MSCI Emerging Markets Index (“Index”) returned 2.55% in USD terms, more than double the return of the MSCI World Index. Economic growth within the asset class is improving, and valuations lured investors, particularly given the brightening earnings outlooks for many emerging markets companies. In the Index, nearly every sector appreciated over the period. The top performers were the information technology, industrials, and telecommunication services sectors. The health care, materials, and financials sectors lagged the Index. From a country perspective, Mexico, Chile, and India appreciated the most over the month. Egypt, Brazil, and Hungary were the weakest performers.

Causeway Emerging Markets Fund (“Fund”) outperformed the Index for the month of March. We use both bottom-up and top-down factors to forecast alpha (return in excess of the Index) for the stocks in the Fund’s investable universe. Of our bottom-up factors, value and earnings growth continued to post positive returns. Our bottom-up technical factors, which measure share price momentum, have been weak for the past twelve months, indicating rotation within the asset class. Of our top-down factors, our currency and macroeconomic factors were effective for the period. Our country and sector factors posted negative returns.

The Fund’s positioning in emerging Asia provided the greatest regional contributions to outperformance versus the Index, most notably from stock selection in China and South Korea. Fund exposure to Latin America also contributed to relative return, while exposure to the emerging Europe, Middle East, and Africa (EMEA) region detracted. Industrials and real estate were the largest sector-level contributors to outperformance versus the Index, partially offset by the Fund’s positioning in the consumer staples and consumer discretionary sectors. The top individual contributors to relative performance were overweight positions in for-profit educator, New Oriental Education & Technology Group, Inc. (China) and crude oil refiner, Polski Koncern Naftowy ORLEN S.A. (Poland), and a zero-weight position in banking services provider, Itau Unibanco Holding SA (Brazil). The top relative detractors were overweight positions in three Brazilian securities: financial & industrial holdings company, Itausa - Investimentos Itau SA, diversified metals & mining operator, Vale S.A., and multinational food processing company, JBS S.A.

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.

Dividends

2016$0.1597
2015$0.1620
2014$0.2775
2013$0.0825
2012$0.2526
2011$0.0778
2010$0.2451
2009$0.2830
2008$0.1186
2007$0.2002
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Short-term Capital Gains

2016$0.0000
2015$0.0000
2014$0.0000
2013$0.0000
2012$0.0000
2011$0.0000
2010$0.0000
2009$0.0000
2008$0.0000
2007$0.4003
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Long-term Capital Gains

2016$0.0000
2015$0.0000
2014$0.0000
2013$0.0000
2012$0.0000
2011$0.0000
2010$0.0000
2009$0.0000
2008$0.0000
2007$0.0000
Load More

Distributions are per share. Distribution amounts are based on gains and losses realized and income earned by the Fund through October 31 (or earlier under certain circumstances).

Documents

Consent to Electronic Delivery

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