Diversified exposure to emerging markets, seeking to capture value and growth

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.

Causeway uses a quantitative investment approach to purchase and sell investments for the Fund. Causeway’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.

YTD Return*
+9.04%
Nav*
$12.43, +0.01
Inception
March 30, 2007
Cusip
149498107
Benchmark
MSCI Emerging Markets
Minimum Investment
$1,000,000
Sales Charge
None
Net Expense Ratio
1.15%
*As of July 23, 2019

Strategy overview

The portfolio managers discuss our Emerging Markets strategy.

Portfolio managers

Head of Quantitative Research
Quantitative Portfolio Manager
Quantitative Portfolio Manager
Quantitative Portfolio Manager

Performance

QTD YTD 1 year3 years5 years10 years Since inception
Fund 0.4%9.0%-1.9%9.1%1.5%7.2%4.0%
MSCI Emerging Markets 0.7%10.8%1.6%11.1%2.9%6.2%3.9%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 0.4%9.0%-1.9%9.1%1.5%7.2%4.0%
MSCI Emerging Markets 0.7%10.8%1.6%11.1%2.9%6.2%3.9%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 0.4%9.0%-1.9%9.1%1.5%7.2%4.0%
MSCI Emerging Markets 0.7%10.8%1.6%11.1%2.9%6.2%3.9%
QTD YTD 1 year3 years5 years10 years Since inception
Fund 0.4%9.0%-1.9%9.1%1.5%7.2%4.0%
MSCI Emerging Markets 0.7%10.8%1.6%11.1%2.9%6.2%3.9%
20182017201620152014201320122011201020092008
Fund -17.9%39.8%9.2%-16.0%2.1%-2.6%25.8%-18.1%26.3%88.1%-58.4%
MSCI Emerging Markets -14.2%37.8%11.6%-14.6%-1.8%-2.3%18.6%-18.2%19.2%79.0%-53.2%
Fund
MSCI Emerging Markets
20182017201620152014201320122011201020092008
-17.9%39.8%9.2%-16.0%2.1%-2.6%25.8%-18.1%26.3%88.1%-58.4%
-14.2%37.8%11.6%-14.6%-1.8%-2.3%18.6%-18.2%19.2%79.0%-53.2%

Portfolio (as of June 30, 2019)

Benchmark: MSCI Emerging Markets
Asset Allocation
Fund
Stocks 98.9%
Cash 1.1%
Fund Characteristics
Fund Benchmark
No. of holdings 142 1193
Weighted avg. market cap (US $MM) $59,198 $52,111
NTM price/earnings 9.5 12.0
Price/book value 1.3 1.6
NTM EPS revision (wtd. avg) -3.7 -8.6
Net assets $3,710,034,143 -
TOP 10 ACTIVE HOLDINGS
Security Country Active weight*
China Construction Bank Corp. China 3.5%
Tencent Holdings Ltd. China 6.5%
Investimentos Itau Brazil 2.0%
Samsung Electronics Co., Ltd. South Korea 5.0%
Lukoil Russia 1.9%
Gazprom PJSC Russia 1.9%
Ping An Insurance (Group) Co. of China Ltd. China 2.4%
Banco do Brasil SA Brazil 1.4%
Anhui Conch Cement Co., Ltd. China 1.2%
Sberbank Russia 1.7%

A "weighted average” measures a characteristic by the market capitalization of each stock. Price/book value is the weighted average of the price/book values of all the stocks in a portfolio. The P/B value 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-12-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.

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

SECTOR WEIGHTS
Sector Fund Benchmark
Financials 25.8% 25.2%
Information Technology 15.7% 13.9%
Communication Services 12.7% 11.7%
Energy 10.2% 7.9%
Consumer Discretionary 9.5% 13.4%
Materials 6.4% 7.6%
Industrials 6.2% 5.3%
Consumer Staples 5.4% 6.6%
Real Estate 2.7% 3.0%
Health Care 2.0% 2.6%
Utilities 1.2% 2.7%
Equity Funds 1.1% 0.0%
TOP 10 COUNTRIES
testing
Country Fund Benchmark
China 34.3% 31.6%
South Korea 14.6% 12.4%
India 10.9% 9.0%
Taiwan 9.9% 10.8%
Brazil 8.8% 7.6%
Russia 7.2% 4.0%
Thailand 3.4% 3.0%
Mexico 1.9% 2.5%
South Africa 1.7% 5.9%
Turkey 1.3% 0.5%
Regional Allocation
  • Emerging Asia 74.9%
  • Emerging Europe, Middle East, Africa 12.3%
  • Emerging Latin America 11.7%
  • Multi Region Emerging (ETF) 0.0%

Commentary (As of June 30, 2019)

Highlights

  • Buoyed by optimism surrounding US-China trade relations and a dovish US Federal Reserve, emerging market (“EM”) equities rebounded in June.

Portfolio attribution

Causeway Emerging Markets Fund (“Fund”) performed in-line with the Index in June 2019. We use both bottom-up and top-down factor categories to seek to forecast alpha for the stocks in the Fund’s investable universe. Our price momentum factor performed well in June, continuing its resurgence. Our earnings growth factor, which is correlated with momentum, was also a positive indicator during the month. Our value factor category rebounded in June, posting a modestly positive return. Led by our country factor, our four top-down factor categories were all positive indicators in June.

Investment outlook

Our price momentum factor continued its resurgence in June and was our strongest performing factor in the second quarter. Heightened uncertainty in financial markets contributed to momentum’s underperformance in prior quarters. While uncertainty remains elevated, we believe that momentum’s recent strong performance is primarily attributable to compelling valuations as the momentum factor had, in our view, become oversold. In addition to momentum, all of our bottom-up and top-down factors added value in June. However, our contextual weighting scheme detracted from performance during the month. When calculating a stock’s expected alpha, we first classify it as value, growth, or momentum and then assign weights that we believe are appropriate for that classification. This contextual approach underperformed a uniform approach in June and has also detracted over the year-to-date period. However, we remain confident in our contextual approach, which has benefitted the strategy compared to an equal-weighted approach, since the Fund’s inception in 2007.

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. Current and future holdings are subject to risk. The Fund may invest in derivatives, which are often more volatile than other investments and may magnify the Fund's gains or losses. Investing in ETFs is subject to the risks of the underlying funds.

Distributions

Dividends Short-term capital gains Long-term capital gains
2018 $0.2296 $0.0000 $0.0000
2017 $0.2232 $0.0000 $0.0000
2016 $0.1597 $0.0000 $0.0000
2015 $0.1620 $0.0000 $0.0000
2014 $0.2775 $0.0000 $0.0000
2013 $0.0825 $0.0000 $0.0000
2012 $0.2526 $0.0000 $0.0000
2011 $0.0778 $0.0000 $0.0000
2010 $0.2451 $0.0000 $0.0000
2009 $0.2830 $0.0000 $0.0000
2008 $0.1186 $0.0000 $0.0000
2007 $0.2002 $0.4003 $0.0000

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

Fund information:

Forms: