Seeking diversified exposure to global small cap companies
The global small cap strategy invests primarily in common stocks of companies with smaller market capitalizations located in the global developed and emerging markets. The portfolio 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 portfolio’s benchmark, the MSCI ACWI Small Cap Index (Gross), at the time of purchase. Some of these companies, although small by US standards, might be large companies in their local markets. The portfolio may continue to hold securities of a 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 portfolio may invest in a wide range of industries.
- Benchmark
- MSCI ACWI Small Cap
- Inception
- November 30, 2023
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
Account returns for the Causeway Global Small Cap Composite (“GSC Composite”) are calculated daily. Monthly account returns are calculated by geometrically linking the daily returns. The return of the GSC Composite is calculated monthly by weighting monthly account returns by the beginning market values. Valuations and returns are computed and stated in US dollars. Returns include the reinvestment of interest, dividends and any capital gains. Returns are calculated gross of withholding taxes on dividends, interest income, and capital gains. Past performance is no guarantee of future performance. Gross-of-fees returns are presented before management, performance and custody fees but after trading expenses. Net-of-fees returns are presented after the deduction of actual management fees, performance-based fees, and all trading expenses, but before custody fees. Causeway’s basic management fee schedules are described in its firm brochure pursuant to Part 2 of Form ADV. A complete list and description of firm composites is available upon request. Investing involves risk including loss of principal. In addition to the normal risks associated with investing, global investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Diversification does not prevent all investment losses. Causeway claims compliance with the Global Investment Performance Standards (GIPS®), but does not claim compliance with the GIPS Standards for the presented performance information. Causeway has been independently verified for the periods June 11, 2001 through December 31, 2022. The GSC Composite not had a performance examination since inception of the composite. GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein. The GSC Composite includes all U.S. dollar denominated, discretionary accounts in the global small cap strategy which generally invest in companies with smaller market capitalizations located in developed and emerging markets outside the U.S and in the U.S. The composite benchmark is the MSCI ACWI Index. The MSCI ACWI Index benchmark is a free float-adjusted market capitalization weighted index, designed to measure developed market equity performance excluding the U.S. and Canada, consisting of 21 stock markets in Europe, Australasia, and the Far East. The Index is gross of withholding taxes, assumes reinvestment of dividends and capital gains, and assumes no management, custody, transaction or other expenses. Accounts in the composite may use different benchmarks. New accounts are included in the GSC Composite during the first full month under management. Terminated accounts are included in the GSC Composite through the last full month under management. A complete list and description of Firm composites is available upon request.
Portfolio (as of March 31, 2024)
Asset Allocation
| Strategy | |
|---|---|
| Stocks | 98.6% |
| Cash | 1.4% |
Strategy Characteristics
| Strategy | Benchmark | |
|---|---|---|
| No. of holdings | 130 | 6192 |
| Weighted avg. market cap (US $MM) | $3,151 | $3,767 |
| FY2 price/earnings | 9.6 | 13.3 |
| Price/book value | 1.4 | 1.8 |
| Dividend yield (%) | 3.0 | 2.0 |
TOP 10 HOLDINGS
| Security | Country | Percent |
|---|---|---|
| Core & Main | United States | 2.4 |
| Boise Cascade Co. | United States | 2.2 |
| Owens & Minor | United States | 2.2 |
| Advanced Drainage Systems | United States | 2.2 |
| KB Home | United States | 2.1 |
| Arcadyan Technology Corp. | Taiwan | 2.0 |
| Suzuken Co., Ltd. | Japan | 2.0 |
| Corcept Therapeutics | United States | 2.0 |
| Sonos | United States | 2.0 |
| Commvault Systems | United States | 2.0 |
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. The FY2 P/E ratio is a forward P/E ratio using a next-twenty-four months EPS estimate in the denominator.
*Active defined as Portfolio weight minus MSCI ACWI Small Cap Index weight. Holdings are subject to change.
SECTOR WEIGHTS
| Sector | Strategy | Benchmark |
|---|---|---|
| Industrials | 24.5% | 20.2% |
| Consumer Discretionary | 17.1% | 13.2% |
| Information Technology | 14.6% | 12.1% |
| Health Care | 12.8% | 9.6% |
| Financials | 9.9% | 14.3% |
| Materials | 4.8% | 8.1% |
| Communication Services | 3.6% | 2.9% |
| Energy | 3.5% | 4.7% |
| Real Estate | 3.2% | 7.5% |
| Equity Funds | 1.9% | 0.0% |
| Consumer Staples | 1.5% | 4.9% |
| Utilities | 1.1% | 2.5% |
TOP 10 COUNTRIES
| Country | Strategy | Benchmark |
|---|---|---|
| United States | 48.9% | 0.0% |
| Japan | 9.1% | 0.0% |
| United Kingdom | 8.4% | 0.0% |
| Taiwan | 6.4% | 0.0% |
| Australia | 4.4% | 0.0% |
| Italy | 4.1% | 0.0% |
| Canada | 3.8% | 0.0% |
| Norway | 3.8% | 0.0% |
| China | 2.3% | 0.0% |
| Netherlands | 1.9% | 0.0% |
Regional Allocation
- North America 52.8%
- Europe – other 19.1%
- Pacific 14.0%
- Emerging Asia 11.5%
- Emerging Europe, Middle East, Africa 0.6%
- Emerging Latin America 0.4%
- Developed Middle East 0.2%