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*
-0.78%
Nav*
$11.43, -0.18
Inception
March 30, 2007
Cusip
149498206
Benchmark
MSCI Emerging Markets
Minimum Investment
$5,000
Sales Charge
None
Total Expense Ratio
1.40%
*As of August 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

QTDYTD1 year3 years5 years10 yearsSince inception
Fund-2.3%6.4%-6.6%6.3%0.7%5.5%3.6%
MSCI Emerging Markets-1.1%9.5%-1.8%8.8%2.2%4.9%3.7%
QTDYTD1 year3 years5 years10 yearsSince inception
Fund-2.3%6.4%-6.6%6.3%0.7%5.5%3.6%
MSCI Emerging Markets-1.1%9.5%-1.8%8.8%2.2%4.9%3.7%
QTDYTD1 year3 years5 years10 yearsSince inception
Fund0.4%8.9%-2.0%8.9%1.3%7.0%3.8%
MSCI Emerging Markets0.7%10.8%1.6%11.1%2.9%6.2%3.9%
QTDYTD1 year3 years5 years10 yearsSince inception
Fund0.4%8.9%-2.0%8.9%1.3%7.0%3.8%
MSCI Emerging Markets0.7%10.8%1.6%11.1%2.9%6.2%3.9%
20182017201620152014201320122011201020092008
Fund-18.1%39.5%8.9%-16.2%1.8%-2.8%25.6%-18.2%26.1%87.9%-58.5%
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
-18.1%39.5%8.9%-16.2%1.8%-2.8%25.6%-18.2%26.1%87.9%-58.5%
-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 July 31, 2019)

Benchmark: MSCI Emerging Markets
Asset Allocation
Fund
Stocks97.1%
Cash2.9%
Fund Characteristics
FundBenchmark
No. of holdings 139 1192
Weighted avg. market cap (US $MM)$62,120$53,928
NTM price/earnings9.311.9
Price/book value1.31.6
NTM EPS revision (wtd. avg)-0.9-8.1
Net assets$393,200,161-
TOP 10 ACTIVE HOLDINGS
Security Country Active weight*
Tencent Holdings Ltd.China1.9%
China Construction Bank Corp.China1.8%
Investimentos ItauBrazil1.6%
Samsung Electronics Co., Ltd.South Korea1.2%
Gazprom PJSCRussia1.2%
JBS SABrazil1.1%
LukoilRussia1.1%
Ping An Insurance (Group) Co. of China Ltd.China1.0%
Banco do Brasil SABrazil1.0%
SberbankRussia1.0%

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
Financials24.3%24.8%
Information Technology15.8%14.3%
Communication Services12.8%11.9%
Consumer Discretionary9.9%13.6%
Energy9.8%7.8%
Industrials5.6%5.3%
Materials5.5%7.2%
Consumer Staples5.4%6.7%
Real Estate2.5%3.0%
Equity Funds2.4%0.0%
Health Care2.0%2.6%
Utilities1.2%2.8%
TOP 10 COUNTRIES
Country Fund Benchmark
China34.2%31.8%
South Korea13.6%11.8%
Taiwan10.1%11.2%
India9.8%8.6%
Brazil8.9%8.0%
Russia6.9%4.0%
Thailand3.3%3.0%
Mexico1.9%2.5%
South Africa1.6%5.8%
Indonesia1.2%2.2%
Regional Allocation
  • Emerging Asia 73.0%
  • Emerging Europe, Middle East, Africa 12.2%
  • Emerging Latin America 11.6%
  • Multi Region Emerging (ETF) 0.2%

Commentary (As of July 31, 2019)

Highlights

  • While the US Federal Reserve’s July interest rate cut supported emerging market (“EM”) equities, slowing growth in select countries weighed on the asset class during the month.

Portfolio attribution

Causeway Emerging Markets Fund (“Fund”) underperformed the Index in July 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 value factor was a negative indicator during the month and has been the weakest of our three bottom-up factor categories year-to-date (“YTD”). Our earnings growth factor was neutral during the month. Our price momentum factor continued its resurgence in July and is our top performing bottom-up factor indicator YTD. Of our top-down factors, sector and currency were negative indicators during the month. The macroeconomic and country factors were positive in July.

Investment outlook

Our price momentum factor continued its resurgence in July and it is our strongest performing factor YTD. Uncertainty in markets generally presents a challenging environment for a momentum approach. While we would be hard pressed to assert that global uncertainty has diminished, momentum appears to be rebounding after being oversold in late 2018 and early 2019. In contrast to momentum’s improved performance, our contextual weighting scheme continued to detract from performance in July. 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 July and has also detracted over the YTD period. We are closely monitoring the performance of our contextual weighting scheme but we remain confident in this methodology, which we believe 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. International and emerging markets investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from social, economic or political instability in other nations. Emerging markets and smaller companies involve additional risks and higher volatility.

Distributions

DividendsShort-term capital gainsLong-term capital gains
2018$0.1777$0.0000$0.0000
2017$0.1937$0.0000$0.0000
2016$0.1353$0.0000$0.0000
2015$0.1434$0.0000$0.0000
2014$0.2425$0.0000$0.0000
2013$0.1100$0.0000$0.0000
2012$0.2768$0.0000$0.0000
2011$0.0972$0.0000$0.0000
2010$0.2560$0.0000$0.0000
2009$0.2866$0.0000$0.0000
2008$0.1506$0.0000$0.0000
2007$0.2097$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: