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International Small Cap Fund

NAV (as of 24 Feb 2017)

$11.12, -0.08

YTD

+5.70%

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 4.1%4.1%17.6%6.4%
MSCI AC World ex USA Small Cap 3.8%3.8%17.3%5.3%
Fund Quarter to Date Year to Date 1 Year Since Inception
CIISX -0.9%3.3%3.3%4.7%
MSCI AC World ex USA Small Cap -3.5%4.3%4.3%3.7%

Portfolio

Asset Allocation as of 31 Jan 2017

Stocks 98.8%
Cash 1.2%

Characteristics as of 31 Jan 2017

Causeway MSCI AC World ex USA Small Cap
No. of Holdings 115 4289
Wtd. Avg. Market Cap (Mn $US)$989$1,451
FY2 Price/Earnings9.114.6
Price/Book Value1.21.5

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 Jan 2017

Consumer Discretionary15.44%
Industrials15.21%
Financials14.70%
Materials12.85%
Real Estate10.15%
Information Technology8.57%
Health Care8.33%
Consumer Staples6.91%
Energy3.52%
Utilities1.97%
Equity Funds1.15%
Telecommunication Services0.00%

(VS. Benchmark)

Consumer Discretionary15.70%
Industrials19.72%
Financials10.43%
Materials11.44%
Real Estate10.28%
Information Technology11.34%
Health Care6.88%
Consumer Staples6.57%
Energy3.96%
Utilities2.64%
Equity Funds0.00%
Telecommunication Services1.03%
Consumer Discretionary
Industrials
Financials
Materials
Real Estate
Information Technology
Health Care
Consumer Staples
Energy
Utilities
Equity Funds
Telecommunication Services
Other

TOP 10 COUNTRIES as of 31 Jan 2017

Japan18.00%
Canada10.29%
United Kingdom9.22%
Australia8.97%
China6.29%
Italy5.97%
South Korea5.57%
Norway3.92%
Sweden3.82%
Thailand3.22%
Germany2.89%
Taiwan2.83%
Austria2.00%
Indonesia1.97%
Belgium1.94%
Mexico1.72%
Turkey1.72%
Singapore1.48%
Spain1.20%
India1.15%
Denmark1.00%
Greece0.96%
Israel0.52%
New Zealand0.51%
Netherlands0.40%
Brazil0.35%
Finland0.34%
Egypt0.30%
Qatar0.24%
Hong Kong0.01%
Switzerland0.00%
Portugal0.00%
France0.00%
Ireland0.00%
Russia0.00%
South Africa0.00%
Hungary0.00%
Poland0.00%
Czech Republic0.00%
Malaysia0.00%
Philippines0.00%
Multi-National All Country0.00%
Chile0.00%
Colombia0.00%
United Arab Emirates0.00%

(VS. Benchmark)

Japan22.32%
Canada7.69%
United Kingdom12.37%
Australia4.68%
China4.94%
Italy2.71%
South Korea3.56%
Norway1.24%
Sweden3.63%
Thailand0.86%
Germany4.37%
Taiwan3.80%
Austria0.58%
Indonesia0.55%
Belgium1.33%
Mexico0.62%
Turkey0.24%
Singapore1.23%
Spain1.77%
India2.59%
Denmark1.07%
Greece0.13%
Israel1.01%
New Zealand0.78%
Netherlands1.46%
Brazil1.01%
Finland1.14%
Egypt0.09%
Qatar0.16%
Hong Kong1.67%
Switzerland3.30%
Portugal0.25%
France2.95%
Ireland0.71%
Russia0.20%
South Africa1.25%
Hungary0.03%
Poland0.25%
Czech Republic0.02%
Malaysia0.70%
Philippines0.25%
Multi-National All Country0.00%
Chile0.24%
Colombia0.07%
United Arab Emirates0.18%
Japan
Canada
United Kingdom
Australia
China
Italy
South Korea
Norway
Sweden
Thailand
Germany
Taiwan
Austria
Indonesia
Belgium
Mexico
Turkey
Singapore
Spain
India
Denmark
Greece
Israel
New Zealand
Netherlands
Brazil
Finland
Egypt
Qatar
Hong Kong
Switzerland
Portugal
France
Ireland
Russia
South Africa
Hungary
Poland
Czech Republic
Malaysia
Philippines
Multi-National All Country
Chile
Colombia
United Arab Emirates
Other

TOP 10 ACTIVE HOLDINGS as of 31 Jan 2017

Security Country Industry Active Weight*
DIC Asset AG Germany Real Estate 2.0
UNIQA Insurance Group AG Austria Insurance 2.0
Energyvingsome Fund Canada Utilities 1.9
AGF Management Canada Diversified Financials 1.9
Transcontinental Canada Commercial & Professional Services 1.9
Mineral Resources Ltd. Australia Materials 1.9
Downer EDI Ltd. Australia Commercial & Professional Services 1.8
KappAhl AB Sweden Retailing 1.8
BlueScope Steel Ltd. Australia Materials 1.8
Thai Vegetable Oil Public Co. Ltd. Thailand Food Beverage & Tobacco 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 Jan 2017


Despite a politically tumultuous start to the year, international smaller capitalization equities appreciated during January and economic data indicate improving global economies. With the exception of the energy sector, every other sector in the MSCI ACWI ex USA Small Cap Index (“Index”) finished the month with positive performance, marked by the strongest returns from the materials, information technology, and telecommunication services sectors. In addition to the energy sector, the health care and real estate sectors posted the weakest results. Lastly, smaller capitalization equities outperformed larger capitalization equities in emerging markets, while underperforming in developed markets.

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 factor categories: valuation, earnings growth, technical indicators, and quality. All four of our factors produced positive predictive power in January, led by the strongest performance from our technical indicators factors. Valuation was the next strongest performing factor group, continuing the positive performance we saw that led to it being the best performing set of factors in the previous calendar year. Our financial strength factors continue to be the most consistent, as they have had only one negative month over the last twelve. Lastly, we are encouraged by the reversal we saw from the previous month in the performance of our earnings growth factors.

Fund holdings in the information technology, industrials, and consumer discretionary sectors contributed the most to Fund returns. Holdings in the consumer staples, financials, and real estate sectors offset some of the outperformance. The largest absolute contributor to performance was flat product steel producer, BlueScope Steel Ltd. (Australia). Additional top contributors included energy services company, Cape Plc (United Kingdom), computer motherboard manufacturer, Elitegroup Computer Systems Co., Ltd. (Taiwan), insurance company, UNIQA Insurance Group AG (Austria), and infrastructure construction company, Astaldi SpA (Italy). The largest absolute detractor from performance was life insurer, TongYang Life Insurance Co., Ltd. (South Korea). Additional top detractors included coal exploration & mining operator, PT Indo Tambangraya Megah Tbk (Indonesia), residential property developer, Yuzhou Properties Co., Ltd. (China), real estate investment trust, Macquarie México Real Estate Management SA de CV (Mexico), and fish & seafood farmer, SalMar ASA (Norway).

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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