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International Small Cap Fund

NAV (as of 17 Nov 2017)

$13.49, 0.00

YTD

+28.23%

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 Year3 Year Since Inception
CIISX 0.8%29.9%29.0%11.9%12.7%
MSCI AC World ex USA Small Cap 1.9%26.3%25.2%10.1%10.9%
Fund Quarter to Date Year to Date 1 Year3 Year Since Inception
CIISX 10.3%28.9%27.8%0.0%12.8%
MSCI AC World ex USA Small Cap 7.0%23.9%19.6%0.0%10.5%

Portfolio

Asset Allocation as of 31 Oct 2017

Stocks 99%
Cash 1%

Characteristics as of 31 Oct 2017

Causeway MSCI AC World ex USA Small Cap
No. of Holdings 124 4291
Wtd. Avg. Market Cap (Mn $US)$1,446$1,846
FY2 Price/Earnings9.215.1
Price/Book Value1.31.7

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 Oct 2017

Industrials15.85%
Real Estate14.71%
Financials13.90%
Information Technology13.68%
Consumer Discretionary13.06%
Materials11.97%
Energy7.08%
Equity Funds2.92%
Health Care2.38%
Utilities1.78%
Consumer Staples1.64%
Telecommunication Services0.00%

(VS. Benchmark)

Industrials20.10%
Real Estate9.78%
Financials10.48%
Information Technology12.79%
Consumer Discretionary15.56%
Materials10.96%
Energy3.25%
Equity Funds0.00%
Health Care6.73%
Utilities2.81%
Consumer Staples6.43%
Telecommunication Services1.11%
Industrials
Real Estate
Financials
Information Technology
Consumer Discretionary
Materials
Energy
Equity Funds
Health Care
Utilities
Consumer Staples
Telecommunication Services
Other

TOP 10 COUNTRIES as of 31 Oct 2017

Japan17.86%
United Kingdom7.99%
China7.44%
Canada6.83%
Italy5.57%
Australia5.21%
South Korea4.27%
France3.81%
Taiwan3.47%
Norway3.31%
Germany3.30%
Sweden3.18%
Netherlands2.53%
India2.30%
Israel2.09%
Greece2.00%
Thailand1.99%
Singapore1.83%
Turkey1.77%
Mexico1.72%
Switzerland1.60%
New Zealand1.58%
Spain1.55%
Belgium1.32%
Finland1.28%
Indonesia1.15%
Hong Kong0.48%
Denmark0.38%
Malaysia0.35%
Multi-National All Country0.28%
Egypt0.27%
Austria0.24%
Ireland0.00%
Portugal0.00%
Multi-National Developed0.00%
Pakistan0.00%
Philippines0.00%
Czech Republic0.00%
Hungary0.00%
Poland0.00%
Qatar0.00%
Russia0.00%
South Africa0.00%
Peru0.00%
United Arab Emirates0.00%
Brazil0.00%
Chile0.00%
Colombia0.00%

(VS. Benchmark)

Japan21.56%
United Kingdom12.97%
China4.73%
Canada6.61%
Italy2.91%
Australia4.39%
South Korea3.52%
France3.21%
Taiwan3.98%
Norway1.19%
Germany4.92%
Sweden3.67%
Netherlands1.68%
India3.11%
Israel1.08%
Greece0.16%
Thailand0.85%
Singapore1.10%
Turkey0.24%
Mexico0.57%
Switzerland3.42%
New Zealand0.77%
Spain1.65%
Belgium1.32%
Finland1.06%
Indonesia0.48%
Hong Kong1.57%
Denmark1.24%
Malaysia0.71%
Multi-National All Country0.00%
Egypt0.09%
Austria0.65%
Ireland0.70%
Portugal0.27%
Multi-National Developed0.00%
Pakistan0.17%
Philippines0.19%
Czech Republic0.02%
Hungary0.02%
Poland0.27%
Qatar0.09%
Russia0.14%
South Africa1.03%
Peru0.05%
United Arab Emirates0.13%
Brazil1.16%
Chile0.27%
Colombia0.08%
Japan
United Kingdom
China
Canada
Italy
Australia
South Korea
France
Taiwan
Norway
Germany
Sweden
Netherlands
India
Israel
Greece
Thailand
Singapore
Turkey
Mexico
Switzerland
New Zealand
Spain
Belgium
Finland
Indonesia
Hong Kong
Denmark
Malaysia
Multi-National All Country
Egypt
Austria
Ireland
Portugal
Multi-National Developed
Pakistan
Philippines
Czech Republic
Hungary
Poland
Qatar
Russia
South Africa
Peru
United Arab Emirates
Brazil
Chile
Colombia
Other

TOP 10 ACTIVE HOLDINGS as of 31 Oct 2017

Security Country Industry Active Weight*
Immobiliare Grande Distribuzione SpA Italy Real Estate 2.1
Sojitz Corp. Japan Capital Goods 2.0
Mineral Resources Ltd. Australia Materials 2.0
Wüstenrot & Württembergische AG Germany Insurance 1.9
Transcontinental Canada Commercial & Professional Services 1.9
ASR Nederland NV Netherlands Insurance 1.9
AGF Management Canada Diversified Financials 1.9
Motor Oil (Hellas) Corith Refineries SA Greece Energy 1.8
Paz Oil Co. Ltd. Israel Energy 1.8
Hemfosa Fastigheter AB Sweden Real Estate 1.8

*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 Oct 2017


International smaller capitalization equities continued their climb higher in October, extending the run of consecutive positive absolute performance to ten months. Overall, international smaller capitalization equities performed in line with larger capitalization equities in October. Emerging markets outperformed developed markets in the month, continuing the 2017 year-to-date trend that has seen emerging markets (as measured by the MSCI Emerging Markets Index) outperform developed markets (as measured by the MSCI World ex USA Index) by over 11%. Within emerging markets, larger capitalization equities (as measured by the MSCI Emerging Markets Large Cap Index) slightly outperformed smaller capitalization equities (as measured by the MSCI Emerging Markets Small Cap Index) in a year when emerging market larger capitalization equities outperformed emerging market smaller capitalization equities by over 7%.

Within the MSCI ACWI ex USA Small Cap Index (“Index”), nine out of eleven sectors posted positive returns in October. Among them, the top performing sectors were information technology, health care, and consumer staples. Energy, real estate, and financials were the weakest performers although only two of these three sectors had negative returns for the month.

Causeway International Small Cap Fund (“Fund”) underperformed 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. Despite posting negative returns for October, value factors remain the best-performing factor group over the past 12 months. Earnings growth factors posted the strongest returns in October, and earnings growth factors have outperformed value factors over the 2017 year-to-date period, especially within emerging markets. Technical factors had positive returns in October and remain the strongest factor group over the 2017 year-to-date period. The quality factor group posted negative returns in October, and quality is the weakest factor group performer, though still positive, over the last twelve months. All factor group returns are positive over the 2017 year-to-date period, over the last 12 months, and all remain positive on an inception-to-date basis.

Fund holdings in the materials, real estate, and health care sectors detracted the most from relative performance. However, holdings in the financials and industrials sectors offset a portion of the underperformance. While underperforming for the month, the Fund has continued to outperform the Index over the year-to-date period, primarily due to stock selection. Similarly, October’s underperformance was primarily driven by stock selection. The largest detractor to relative performance was motor car dealership franchise Pendragon Plc (United Kingdom). Additional top detractors included real estate investment trust, Macquarie México Real Estate Management SA de CV (Mexico), residential property developer, Yuzhou Properties Co., Ltd. (China), steel & iron distribution company, EVRAZ Plc (United Kingdom), and airline, Air New Zealand Ltd. (New Zealand). The largest contributor to relative performance was insurer, Società Cattolica di Assicurazioni SC (Italy). Additional contributors included information technology company, Net One Systems Co., Ltd. (Japan), real estate investment company, Immobiliare Grande Distribuzione SpA (Italy), technology hardware producer, Gigabyte Technology Co., Ltd. (Taiwan), and energy & chemical trading company, Sojitz Corp.(Japan).

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

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