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Emerging Markets Fund

Diversified exposure to emerging markets, capturing value and growth

NAV (as of 21 Mar 2019)

$12.54, +0.01

YTD

+10.00%

INCEPTION

30 Mar 2007

TICKER/CUSIP

CEMIX/149498107

Fact Sheet Prospectus

Fund Profile

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.

The Investment Adviser uses a quantitative investment approach to purchase and sell investments for the Fund. The Investment Adviser’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.

Minimum Investment$1,000,000
Sales ChargeNone
Net Expense Ratio1.15%
Dividend FrequencyAnnual
Capital Gain FrequencyAnnual
Benchmark MSCI Emerging Markets

Performance

Fund Quarter to Date Year to Date 1 Year3 Year5 Year10 Year Since Inception
CEMIX 7.3%7.3%-14.5%13.4%3.4%12.2%3.9%
MSCI Emerging Markets 9.0%9.0%-9.5%15.5%4.5%10.7%3.8%
Fund Quarter to Date Year to Date 1 Year3 Year5 Year10 Year Since Inception
CEMIX -8.9%-17.9%-17.9%7.8%1.4%9.9%3.4%
MSCI Emerging Markets -7.4%-14.2%-14.2%9.7%2.0%8.4%3.1%

Portfolio

Asset Allocation as of 28 Feb 2019

Stocks 97.3%
Cash 2.7%

Characteristics as of 28 Feb 2019

Causeway MSCI Emerging Markets
No. of Holdings 149 1124
Wtd. Avg. Market Cap (Mn $US)$58,569$52,168
NTM Price/Earnings9.011.6
Price/Book Value1.31.6
NTM EPS Revision (Wtd. Avg)-15.2-15.5

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. “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-twelve-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.

SECTOR WEIGHTS as of 28 Feb 2019

Financials25.22%
Information Technology15.61%
Communication Services13.22%
Energy10.49%
Consumer Discretionary7.90%
Materials7.28%
Industrials6.58%
Consumer Staples4.48%
Health Care2.27%
Real Estate1.77%
Utilities1.52%
Equity Funds1.00%

(VS. Benchmark)

Financials24.58%
Information Technology14.59%
Communication Services12.02%
Energy8.07%
Consumer Discretionary13.17%
Materials7.43%
Industrials5.42%
Consumer Staples6.42%
Health Care2.71%
Real Estate2.99%
Utilities2.60%
Equity Funds0.00%
Financials
Information Technology
Communication Services
Energy
Consumer Discretionary
Materials
Industrials
Consumer Staples
Health Care
Real Estate
Utilities
Equity Funds
Other

TOP 10 COUNTRIES as of 28 Feb 2019

China32.40%
South Korea16.42%
India9.95%
Brazil9.63%
Taiwan8.56%
Russia5.34%
Thailand3.18%
Mexico2.73%
South Africa2.20%
Turkey1.51%
Malaysia1.36%
Peru1.07%
Indonesia1.03%
Poland0.96%
Saudi Arabia0.67%
Czech Republic0.29%
Multi-National Emerging (ETF)0.11%
Egypt0.00%
Greece0.00%
Qatar0.00%
Hungary0.00%
Chile0.00%
Colombia0.00%
Pakistan0.00%
Philippines0.00%
Multi-National Emerging (ETF)0.00%
United Arab Emirates0.00%

(VS. Benchmark)

China32.12%
South Korea13.69%
India8.45%
Brazil7.62%
Taiwan11.16%
Russia3.79%
Thailand2.43%
Mexico2.68%
South Africa6.09%
Turkey0.66%
Malaysia2.31%
Peru0.43%
Indonesia2.20%
Poland1.17%
Saudi Arabia0.00%
Czech Republic0.17%
Multi-National Emerging (ETF)0.00%
Egypt0.13%
Greece0.22%
Qatar0.97%
Hungary0.32%
Chile1.09%
Colombia0.45%
Pakistan0.04%
Philippines1.08%
Multi-National Emerging (ETF)0.00%
United Arab Emirates0.74%
China
South Korea
India
Brazil
Taiwan
Russia
Thailand
Mexico
South Africa
Turkey
Malaysia
Peru
Indonesia
Poland
Saudi Arabia
Czech Republic
Multi-National Emerging (ETF)
Egypt
Greece
Qatar
Hungary
Chile
Colombia
Pakistan
Philippines
Multi-National Emerging (ETF)
United Arab Emirates
Other

TOP 10 ACTIVE HOLDINGS as of 28 Feb 2019

Security Country Industry Active Weight*
China Construction Bank Corp. China Banks 1.9
Investimentos Itau Brazil Banks 1.7
Tencent Holdings Ltd. China Media & Entertainment 1.5
Samsung Electronics Co., Ltd. South Korea Technology Hardware & Equipment 1.5
Banco do Brasil SA Brazil Banks 1.3
Lukoil Russia Energy 1.2
China Petroleum & Chemical Corp. China Energy 1.2
Anhui Conch Cement Co., Ltd. China Materials 1.0
Ping An Insurance (Group) Co. of China Ltd. China Insurance 1.0
Gazprom PJSC Russia Energy 1.0

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

Approach

We believe the best way to exploit the investment opportunities in emerging markets equities is through a combination of value and growth, and bottom-up and top-down factors. For Causeway Emerging Markets Fund, our quantitative stock selection process is focused on attractively valued companies with superior earnings prospects and positive market sentiment; these companies should produce consistent returns across investment cycles. We use the same approach to select sectors and countries, comparing valuation against earnings growth and market sentiment. At the country level, we also consider the health of the macro-economy. Our quantitative process seeks to combine these factors while attempting to avoid undue sources of risk, which is defined as tracking error (a measurement of dispersion from a benchmark index).

The investment process begins with a liquidity screen on emerging markets equities. Our model creates a return forecast for every stock in the investable universe. We optimize the portfolio weights to maximize portfolio return potential, targeting a 5% tracking error relative to the benchmark MSCI Emerging Markets Index, and subject to additional relative constraints (sector, country, and stock).

Causeway Emerging Markets Fund is a fully invested portfolio of typically 110-150 stocks, with an average 85% annual turnover. Typically, the Fund is undervalued relative to the benchmark on a number of metrics, with greater earnings growth expectations.

Commentary

PERFORMANCE REVIEW for the month ended 28 Feb 2019


Led by emerging Asian stocks, which generally benefitted from constructive US-China trade negotiations, EM equities posted positive returns in February. The MSCI Emerging Markets Index (“Index”) returned 1.11% in local currency terms during the month. Emerging Latin America was the poorest performing region as the group’s largest constituents, Brazil and Mexico, both underperformed. The emerging Europe, Middle East, and Africa (“EMEA”) region also delivered negative returns during the month. Consumer discretionary, information technology, and materials were the top performing sectors within the Index in local currency terms. Real estate, communication services, and consumer staples were the weakest performers.

Causeway Emerging Markets Fund (“Fund”) underperformed the Index in February 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 three bottom-up factor categories were negative performance indicators during the month while our four top-down factor categories were positive indicators. Of our bottom-up factors, the earnings growth category was the weakest performer during the month. Our macroeconomic factor was the strongest performing top-down category.

Over the month, Fund positioning in the emerging Asia region detracted from performance versus the Index, primarily driven by negative stock selection in China, India, and South Korea. Within the emerging Latin America region, holdings in Brazil and Mexico detracted from relative performance. An underweight position in South Africa contributed to relative performance in the EMEA region. From a sector perspective, the largest detractors from relative performance were financials, information technology, and materials. Positioning in the energy sector contributed to relative performance while holdings in the utilities and health care sectors were neutral. The largest stock-level detractors from relative performance included overweight positions in financial & industrial holdings company, Investimentos Itau (Brazil), multinational food processing company, JBS SA (Brazil), and financial services firm, KB Financial Group, Inc.(South Korea). The greatest stock-level contributors to relative performance included an overweight position in financial services firm, Ping An Insurance (Group) Company of China, Ltd. and underweight positions in bank, Banco Bradesco SA (Brazil), and banking services provider, Itau Unibanco Holding SA (Brazil).

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

2018$0.2296
2017$0.2232
2016$0.1597
2015$0.1620
2014$0.2775
2013$0.0825
2012$0.2526
2011$0.0778
2010$0.2451
2009$0.2830
2008$0.1186
2007$0.2002
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Short-term Capital Gains

2018$0.0000
2017$0.0000
2016$0.0000
2015$0.0000
2014$0.0000
2013$0.0000
2012$0.0000
2011$0.0000
2010$0.0000
2009$0.0000
2008$0.0000
2007$0.4003
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Long-term Capital Gains

2018$0.0000
2017$0.0000
2016$0.0000
2015$0.0000
2014$0.0000
2013$0.0000
2012$0.0000
2011$0.0000
2010$0.0000
2009$0.0000
2008$0.0000
2007$0.0000
Load More

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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