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International Small Cap Fund

NAV (as of 17 Dec 2018)

$10.33, -0.13

YTD

-20.96%

INCEPTION

20 Oct 2014

TICKER/CUSIP

CVISX/14949P802

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$5,000
Sales ChargeNone
Net Expense Ratio1.41%
Gross Expense Ratio3.32%
Dividend FrequencyAnnual
Capital Gain FrequencyAnnual
Benchmark MSCI AC World ex USA Small Cap

Performance

Fund Quarter to Date Year to Date 1 Year3 Year Since Inception
CVISX -12.3%-16.9%-14.4%5.1%5.2%
MSCI AC World ex USA Small Cap -9.5%-13.2%-10.5%6.2%5.4%
Fund Quarter to Date Year to Date 1 Year3 Year Since Inception
CVISX 0.2%-5.3%-1.0%11.6%9.0%
MSCI AC World ex USA Small Cap -1.4%-4.1%2.2%11.6%8.4%

Portfolio

Asset Allocation as of 30 Nov 2018

Stocks 98.3%
Cash 1.7%

Characteristics as of 30 Nov 2018

Causeway MSCI AC World ex USA Small Cap
No. of Holdings 132 4272
Wtd. Avg. Market Cap (Mn $US)$1,466$1,595
FY2 Price/Earnings7.812.8
Price/Book Value1.11.4

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 30 Nov 2018

Industrials14.67%
Financials13.51%
Materials13.16%
Consumer Discretionary11.66%
Real Estate11.08%
Information Technology7.97%
Consumer Staples7.67%
Energy6.81%
Health Care5.93%
Equity Funds4.16%
Utilities0.93%
Telecommunication Services0.79%

(VS. Benchmark)

Industrials19.47%
Financials10.99%
Materials10.19%
Consumer Discretionary14.98%
Real Estate10.84%
Information Technology11.54%
Consumer Staples6.87%
Energy3.41%
Health Care7.43%
Equity Funds0.00%
Utilities3.04%
Telecommunication Services1.25%
Industrials
Financials
Materials
Consumer Discretionary
Real Estate
Information Technology
Consumer Staples
Energy
Health Care
Equity Funds
Utilities
Telecommunication Services
Other

TOP 10 COUNTRIES as of 30 Nov 2018

Japan17.76%
United Kingdom10.74%
Australia8.42%
Sweden6.51%
Norway5.92%
Canada5.38%
Taiwan5.37%
China5.08%
Germany4.05%
Netherlands3.01%
India2.57%
Mexico2.54%
South Korea2.53%
Italy2.32%
Denmark2.28%
South Africa1.82%
Singapore1.80%
Switzerland1.54%
Multi-National All Country1.32%
Turkey1.27%
Thailand1.20%
Indonesia0.95%
Greece0.72%
Israel0.60%
Brazil0.48%
France0.39%
Hong Kong0.35%
Belgium0.32%
Chile0.28%
Malaysia0.28%
Portugal0.28%
Spain0.26%
Ireland0.00%
Austria0.00%
Finland0.00%
Pakistan0.00%
Philippines0.00%
New Zealand0.00%
Hungary0.00%
Poland0.00%
Qatar0.00%
Russia0.00%
Czech Republic0.00%
Egypt0.00%
Colombia0.00%
Peru0.00%
United Arab Emirates0.00%

(VS. Benchmark)

Japan23.79%
United Kingdom12.85%
Australia5.24%
Sweden3.87%
Norway1.39%
Canada6.55%
Taiwan3.93%
China2.53%
Germany4.16%
Netherlands1.91%
India3.04%
Mexico0.58%
South Korea3.81%
Italy2.53%
Denmark1.17%
South Africa1.13%
Singapore1.27%
Switzerland3.09%
Multi-National All Country0.00%
Turkey0.22%
Thailand0.82%
Indonesia0.47%
Greece0.13%
Israel1.54%
Brazil1.26%
France2.55%
Hong Kong1.45%
Belgium1.32%
Chile0.32%
Malaysia0.67%
Portugal0.29%
Spain1.83%
Ireland0.61%
Austria0.65%
Finland1.05%
Pakistan0.15%
Philippines0.19%
New Zealand0.75%
Hungary0.03%
Poland0.20%
Qatar0.19%
Russia0.19%
Czech Republic0.01%
Egypt0.12%
Colombia0.06%
Peru0.02%
United Arab Emirates0.09%
Japan
United Kingdom
Australia
Sweden
Norway
Canada
Taiwan
China
Germany
Netherlands
India
Mexico
South Korea
Italy
Denmark
South Africa
Singapore
Switzerland
Multi-National All Country
Turkey
Thailand
Indonesia
Greece
Israel
Brazil
France
Hong Kong
Belgium
Chile
Malaysia
Portugal
Spain
Ireland
Austria
Finland
Pakistan
Philippines
New Zealand
Hungary
Poland
Qatar
Russia
Czech Republic
Egypt
Colombia
Peru
United Arab Emirates
Other

TOP 10 ACTIVE HOLDINGS as of 30 Nov 2018

Security Country Industry Active Weight*
ASR Nederland NV Netherlands Insurance 1.9
HASEKO Corp. Japan Consumer Durables & Apparel 1.9
Royal Unibrew A/S Denmark Food Beverage & Tobacco 1.8
C&C Group Plc United Kingdom Food Beverage & Tobacco 1.8
Yanlord Land Group Ltd. Singapore Real Estate 1.8
Australian Pharmaceutical Industries Ltd. Australia Health Care Equipment & Services 1.8
Radiant Opto-Electronics Corp. Taiwan Semiconductors & Semi Equipment 1.7
Huaxin Cement Co., Ltd. China Materials 1.7
Northgate Plc United Kingdom Transportation 1.7
Coretronic Corp. Taiwan Technology Hardware & Equipment 1.5

*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 30 Nov 2018


Equity markets fluctuated in November as geopolitical events influenced market movements. International smaller capitalization (“cap”) equities, as measured by the MSCI ACWI ex USA Small Cap Index (“Index”), slightly underperformed international large caps in November. Within international smaller cap equities, emerging markets stocks significantly outperformed developed markets stocks, meaningfully reducing their year-to-date underperformance. Emerging markets have thus far proven relatively resilient to the elevated market volatility recently. The strongest performing sectors within the Index during the month were the more economically defensive sectors including utilities, consumer staples, and health care. Energy, information technology, and financials were among the weakest performing sectors, although energy was the weakest by a wide margin.

Causeway International Small Cap Fund (“Fund”) underperformed the Index during the month. To evaluate stocks in our investable universe, our multi-factor quantitative model employs four bottom-up factor categories – valuation, earnings growth, technical indicators, and quality – and two top-down factor categories assessing macroeconomic and country aggregate characteristics.

In November, value factors were slightly negative after their strong performance in October. Earnings growth and technical factors both posted large negative returns in November as we witnessed a reversal in market sentiment away from many of the stocks that previously led the market. Some of the best-performing stocks year-to-date with strong technical characteristics have been hardest hit in the recent market sell-off. The notably poor performance of earnings growth and technical factors was a key driver of the Fund’s underperformance in November. The quality factor group posted positive returns in November, and given the poor performance of earnings growth and momentum in November, quality factors are now the best-performing bottom-up factor group on a year-to-date basis. All bottom-up factor group returns are positive from the inception of the Fund to the end of November. Within our top-down factor groups, our macroeconomic factors posted strong returns in November as countries with superior macroeconomic metrics outperformed those exhibiting relatively weaker metrics. However, returns to our country aggregate factors were negative. Fund holdings in the materials, energy, and consumer staples sectors contributed the most to relative underperformance. Holdings in the utilities sector were the only group to offset a portion of the underperformance. Relative performance for the month can be mostly attributed to stock selection.

The largest detractor to performance was oil refiner, Cosmo Energy Holdings Co., Ltd. (Japan). Additional top detractors included steel & iron distribution company, EVRAZ Plc (United Kingdom), gold miner, Harmony Gold Mining Co. Ltd.(South Africa), integrated oil refiner & producer, Esso Thailand Public Co. Ltd. (Thailand), and construction materials company, Huaxin Cement Co., Ltd. (China). The largest contributor to performance was property developer, Yuexiu Property Co., Ltd. (China). Additional top contributors included natural gas & electric utility, Just Energy Group (Canada), electronics manufacturer, Radiant Opto-Electronics Corp. (Taiwan), engineering and construction company, Daiho Corp.(Japan), and energy and chemical trading company, Sojitz Corp. (Japan).

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

2017$0.3588
2016$0.2619
2015$0.2095
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Short-term Capital Gains

2017$0.23757
2016$0.0000
2015$0.0000
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Long-term Capital Gains

2017$0.47945
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

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