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International Small Cap Fund

NAV (as of 22 Sep 2017)

$13.51, -0.03

YTD

+28.42%

INCEPTION

20 Oct 2014

TICKER/CUSIP

CIISX/14949P703

Fact Sheet Prospectus

Fund Profile

The Fund invests primarily in common stocks of companies with smaller market capitalizations located in developed and emerging markets outside the U.S. The Fund normally invests at least 80% of its total assets in equity securities of companies with smaller market capitalizations. Smaller market capitalization companies are companies with market capitalizations that do not exceed the highest market capitalization of a company within the Fund’s benchmark, the MSCI ACWI ex USA Small Cap Index (Gross), at the time of purchase. Some of these companies, although small by U.S. standards, might be large companies in their local markets. The Fund may continue to hold securities of a portfolio company that appreciate above the smaller market capitalization threshold and thus may from time to time hold less than 80% of its total assets in equity securities of companies with smaller market capitalizations. The Fund may invest in a wide range of industries.

Minimum Investment$1,000,000
Sales ChargeNone
Net Expense Ratio1.33%
Gross Expense Ratio3.45%
Dividend FrequencyAnnual
Capital Gain FrequencyAnnual
BenchmarkMSCI AC World ex USA Small Cap

Performance

Fund Quarter to Date Year to Date 1 Year Since Inception
CIISX 8.7%27.0%27.5%12.6%
MSCI AC World ex USA Small Cap 4.7%21.3%20.0%10.0%
Fund Quarter to Date Year to Date 1 Year Since Inception
CIISX 7.8%16.8%22.5%10.0%
MSCI AC World ex USA Small Cap 6.4%15.8%20.8%8.8%

Portfolio

Asset Allocation as of 31 Aug 2017

Stocks 99.1%
Cash 0.9%

Characteristics as of 31 Aug 2017

Causeway MSCI AC World ex USA Small Cap
No. of Holdings 116 4314
Wtd. Avg. Market Cap (Mn $US)$1,339$1,746
FY2 Price/Earnings9.014.5
Price/Book Value1.31.6

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.

SECTOR WEIGHTS as of 31 Aug 2017

Industrials15.11%
Information Technology14.97%
Real Estate14.92%
Financials14.35%
Materials12.33%
Consumer Discretionary12.01%
Energy5.93%
Health Care4.06%
Utilities2.21%
Consumer Staples2.03%
Equity Funds1.22%
Telecommunication Services0.00%

(VS. Benchmark)

Industrials19.98%
Information Technology12.30%
Real Estate10.10%
Financials10.41%
Materials11.09%
Consumer Discretionary15.47%
Energy3.28%
Health Care6.83%
Utilities2.89%
Consumer Staples6.52%
Equity Funds0.00%
Telecommunication Services1.13%
Industrials
Information Technology
Real Estate
Financials
Materials
Consumer Discretionary
Energy
Health Care
Utilities
Consumer Staples
Equity Funds
Telecommunication Services
Other

TOP 10 COUNTRIES as of 31 Aug 2017

Japan16.53%
China8.61%
United Kingdom8.36%
Canada7.95%
France5.71%
Australia5.45%
Italy5.43%
South Korea4.19%
Norway3.55%
Taiwan3.41%
Germany2.94%
Sweden2.58%
Netherlands2.51%
Mexico1.97%
Greece1.93%
Indonesia1.87%
New Zealand1.86%
Singapore1.85%
Belgium1.72%
Turkey1.66%
Spain1.63%
Switzerland1.62%
Thailand1.33%
India1.22%
Finland1.16%
Israel0.61%
Hong Kong0.51%
Malaysia0.51%
Austria0.25%
Egypt0.22%
Peru0.00%
United Arab Emirates0.00%
Brazil0.00%
Chile0.00%
Colombia0.00%
Denmark0.00%
Ireland0.00%
Portugal0.00%
Pakistan0.00%
Philippines0.00%
Czech Republic0.00%
Hungary0.00%
Poland0.00%
Qatar0.00%
Russia0.00%
South Africa0.00%

(VS. Benchmark)

Japan21.34%
China4.57%
United Kingdom12.91%
Canada6.77%
France3.12%
Australia4.45%
Italy2.91%
South Korea3.43%
Norway1.21%
Taiwan4.00%
Germany5.01%
Sweden3.77%
Netherlands1.54%
Mexico0.67%
Greece0.17%
Indonesia0.50%
New Zealand0.77%
Singapore1.10%
Belgium1.32%
Turkey0.28%
Spain1.71%
Switzerland3.39%
Thailand0.78%
India3.02%
Finland1.11%
Israel1.04%
Hong Kong1.58%
Malaysia0.69%
Austria0.69%
Egypt0.08%
Peru0.03%
United Arab Emirates0.13%
Brazil1.18%
Chile0.27%
Colombia0.08%
Denmark1.29%
Ireland0.71%
Portugal0.26%
Pakistan0.19%
Philippines0.22%
Czech Republic0.03%
Hungary0.03%
Poland0.28%
Qatar0.11%
Russia0.15%
South Africa1.14%
Japan
China
United Kingdom
Canada
France
Australia
Italy
South Korea
Norway
Taiwan
Germany
Sweden
Netherlands
Mexico
Greece
Indonesia
New Zealand
Singapore
Belgium
Turkey
Spain
Switzerland
Thailand
India
Finland
Israel
Hong Kong
Malaysia
Austria
Egypt
Peru
United Arab Emirates
Brazil
Chile
Colombia
Denmark
Ireland
Portugal
Pakistan
Philippines
Czech Republic
Hungary
Poland
Qatar
Russia
South Africa
Other

TOP 10 ACTIVE HOLDINGS as of 31 Aug 2017

Security Country Industry Active Weight*
Yuzhou Properties Co., Ltd. China Real Estate 2.0
Macquarie México Real Estate Management SA de CV Mexico Real Estate 1.9
Air France-KLM SA France Transportation 1.9
ASR Nederland NV Netherlands Insurance 1.9
Hemfosa Fastigheter AB Sweden Real Estate 1.9
AGF Management Canada Diversified Financials 1.9
Motor Oil (Hellas) Corith Refineries SA Greece Energy 1.9
Just Energy Group Canada Utilities 1.9
Tosoh Corp. Japan Materials 1.9
Wüstenrot & Württembergische AG Germany Insurance 1.9

*Active defined as Fund weight minus MSCI ACWI ex USA Small Cap Index weight. Holdings are subject to change.

Approach

For Causeway International Small Cap Fund, our quantitative process examines a multitude of factors within four main categories to gauge the return potential of a stock. First, we seek relatively inexpensive valuations. Second, we want to see accelerating earnings growth prospects and upward earnings estimate revisions from the sell-side analysts who cover the stock. Third, we look for positive recent momentum, since recent trends tend to persist. And fourth, we want to find quality by seeking stocks with a focus on strong free cash flow generation rather than simply sales growth. We then rank the stocks on these factors to identify candidates that we believe should produce the most attractive risk-adjusted returns. Before we establish new positions, our fundamental portfolio managers and analysts have the opportunity to review stocks in their sector of coverage and report any “red flags” that may be outside the scope of quantitative analysis.

We take many steps to monitor and manage risk within the portfolio. We start by including in our tradable universe only the roughly 2,800 stocks that trade at least $1 million per day on average, to seek sufficient liquidity and to minimize market impact when we enter and exit positions. We intend for the portfolio to also typically contain between 120 and 200 stocks at any one time, and this breadth is intended to limit idiosyncratic risk.

Commentary

PERFORMANCE REVIEW for the month ended 31 Aug 2017


International smaller capitalization equities extended their run with August marking the eighth consecutive month of positive absolute performance. For the month, international smaller capitalization equities slightly outperformed larger capitalization equities. Developed markets underperformed emerging markets in the month of August and they lag emerging market returns in 2017 by a large margin. However, within emerging markets, small capitalization stocks slightly underperformed large capitalization stocks, continuing a trend over the last 12 months.

Within the MSCI ACWI ex USA Small Cap Index (“Index”), eight out of eleven sectors posted positive returns in August. Among them, the top performing sectors were materials, consumer staples, and health care. Energy, financials, and telecommunication services were the weakest performers and the three sectors with negative returns for the month.

Causeway International Small Cap Fund (“Fund”) outperformed the Index during the month. To evaluate stocks in our investable universe, our multi-factor quantitative model employs four broad bottom-up factor categories: valuation, earnings growth, technical indicators, and quality. Although value factors posted slightly negative returns for August, value remains the best-performing factor group over the past 12 months. Earnings growth factors posted positive returns for August, however earnings growth is the worst performing factor group in 2017 (though the factor group still maintains slightly positive returns for the year). Technical factors were the strongest performing factor group in the month of August and are now the strongest factor group in 2017. The quality factor group posted flat returns in August, although it has been the most consistent factor group performer over the last twelve months. All factor group returns are positive over the 2017 year-to-date period, and all remain positive on an inception-to-date basis.

Fund holdings in materials, industrials, and real estate contributed the most to relative performance. However, holdings in the health care, energy, and financials sectors offset a portion of the outperformance. August’s outperformance was primarily driven by stock selection. The largest contributor to relative performance was materials producer, EVRAZ Plc (United Kingdom). Additional top contributors included diversified mining company, Mineral Resources Ltd. (Australia), motorway & infrastructure construction company, ASTM SpA (Italy), passenger & cargo airline company, Air France-KLM SA (France), and commercial and industrial real estate investment trust, Macquarie Mexico Real Estate (Mexico). The largest detractor to relative performance was chemicals producer, Soda Sanayii A.S. (Turkey). Additional detractors included energy services company, Modec, Inc. (Japan), print and digital media provider, Transcontinental Inc. (Canada), newspaper and magazine publisher, Trinity Mirror Plc (United Kingdom), and real estate developer, Yanlord Land Group Ltd. (Singapore).

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$0.2901
2015$0.2407
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Short-term Capital Gains

2016$0.0000
2015$0.0000
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Long-term Capital Gains

2016$0.0000
2015$0.0000
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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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