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International Small Cap Fund

NAV (as of 20 Feb 2019)

$10.95, +0.02

YTD

+9.61%

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 Ratio1.42%
Gross Expense Ratio2.26%
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 8.5%8.5%-19.6%9.0%5.6%
MSCI AC World ex USA Small Cap 7.8%7.8%-15.6%9.7%5.7%
Fund Quarter to Date Year to Date 1 Year3 Year Since Inception
CVISX -16.9%-21.3%-21.3%2.9%3.7%
MSCI AC World ex USA Small Cap -14.4%-17.9%-17.9%4.2%3.9%

Portfolio

Asset Allocation as of 31 Jan 2019

Stocks 99%
Cash 1%

Characteristics as of 31 Jan 2019

Causeway MSCI AC World ex USA Small Cap
No. of Holdings 140 4142
Wtd. Avg. Market Cap (Mn $US)$1,448$1,650
FY2 Price/Earnings8.513.1
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 31 Jan 2019

Industrials14.74%
Financials14.30%
Real Estate11.04%
Consumer Discretionary10.58%
Materials10.57%
Information Technology9.32%
Consumer Staples7.77%
Energy7.38%
Health Care5.89%
Equity Funds3.35%
Communication Services2.25%
Utilities1.83%

(VS. Benchmark)

Industrials19.39%
Financials10.94%
Real Estate11.32%
Consumer Discretionary12.99%
Materials10.39%
Information Technology10.01%
Consumer Staples6.47%
Energy3.29%
Health Care7.47%
Equity Funds0.00%
Communication Services4.44%
Utilities3.29%
Industrials
Financials
Real Estate
Consumer Discretionary
Materials
Information Technology
Consumer Staples
Energy
Health Care
Equity Funds
Communication Services
Utilities
Other

TOP 10 COUNTRIES as of 31 Jan 2019

Japan17.73%
United Kingdom13.00%
Taiwan8.46%
Australia7.95%
Sweden6.54%
Norway5.20%
Canada4.57%
China3.89%
India3.10%
Germany3.03%
Netherlands2.78%
South Korea2.56%
Mexico2.34%
Italy2.25%
Denmark2.18%
Brazil2.08%
South Africa2.01%
Singapore1.62%
Turkey1.31%
Switzerland1.06%
Thailand1.00%
Indonesia0.94%
France0.74%
Greece0.70%
Israel0.30%
Hong Kong0.30%
Spain0.29%
Chile0.29%
Portugal0.29%
Malaysia0.28%
Belgium0.26%
Ireland0.00%
Austria0.00%
Finland0.00%
Multi-National Developed0.00%
Pakistan0.00%
Philippines0.00%
Czech Republic0.00%
Egypt0.00%
New Zealand0.00%
Colombia0.00%
United Arab Emirates0.00%
Hungary0.00%
Poland0.00%
Qatar0.00%
Russia0.00%
Peru0.00%
Multi-National All Country0.00%

(VS. Benchmark)

Japan22.27%
United Kingdom13.51%
Taiwan3.78%
Australia5.27%
Sweden3.99%
Norway1.60%
Canada6.90%
China2.42%
India3.04%
Germany4.25%
Netherlands1.93%
South Korea3.72%
Mexico0.62%
Italy2.55%
Denmark1.27%
Brazil1.49%
South Africa1.19%
Singapore1.30%
Turkey0.28%
Switzerland3.16%
Thailand0.82%
Indonesia0.58%
France2.41%
Greece0.19%
Israel1.29%
Hong Kong1.44%
Spain1.80%
Chile0.37%
Portugal0.30%
Malaysia0.64%
Belgium1.41%
Ireland0.39%
Austria0.65%
Finland1.09%
Multi-National Developed0.00%
Pakistan0.17%
Philippines0.20%
Czech Republic0.01%
Egypt0.12%
New Zealand0.73%
Colombia0.06%
United Arab Emirates0.11%
Hungary0.03%
Poland0.24%
Qatar0.22%
Russia0.19%
Peru0.02%
Multi-National All Country0.00%
Japan
United Kingdom
Taiwan
Australia
Sweden
Norway
Canada
China
India
Germany
Netherlands
South Korea
Mexico
Italy
Denmark
Brazil
South Africa
Singapore
Turkey
Switzerland
Thailand
Indonesia
France
Greece
Israel
Hong Kong
Spain
Chile
Portugal
Malaysia
Belgium
Ireland
Austria
Finland
Multi-National Developed
Pakistan
Philippines
Czech Republic
Egypt
New Zealand
Colombia
United Arab Emirates
Hungary
Poland
Qatar
Russia
Peru
Multi-National All Country
Other

TOP 10 ACTIVE HOLDINGS as of 31 Jan 2019

Security Country Industry Active Weight*
EVRAZ Plc United Kingdom Materials 1.8
C&C Group Plc United Kingdom Food Beverage & Tobacco 1.8
ASR Nederland NV Netherlands Insurance 1.7
Royal Unibrew A/S Denmark Food Beverage & Tobacco 1.7
Makalot Industrial Co., Ltd. Taiwan Consumer Durables & Apparel 1.6
Radiant Opto-Electronics Corp. Taiwan Semiconductors & Semi Equipment 1.6
Yanlord Land Group Ltd. Singapore Real Estate 1.6
Coretronic Corp. Taiwan Technology Hardware & Equipment 1.6
FIBRA Macquarie México Mexico Real Estate 1.5
HASEKO Corp. Japan Consumer Durables & Apparel 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 31 Jan 2019


Equity markets rebounded in January, boosted by more dovish signals from the US Federal Reserve on future interest rate hikes and improving rhetoric on US-China trade tensions. International smaller capitalization (“cap”) equities, as measured by the MSCI ACWI ex USA Small Cap Index (“Index”), slightly outperformed international large caps in January. Within international smaller cap equities, developed markets stocks outperformed emerging markets stocks, even as larger cap emerging market equities performed better during the month. All eleven sectors within the Index posted positive returns in January. Among them, the strongest performing sectors were energy, information technology, and real estate. Consumer staples, financials, and communication services were among the weakest performing sectors.

Causeway International Small Cap Fund (“Fund”) outperformed 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 January, value factors generated the best performance among bottom-up factors, following a strong fourth quarter. Earnings growth factors delivered slightly negative returns in the month of January. Technical factors delivered the most negative returns in January and for the last twelve months due to the numerous and sharp market reversals that we witnessed particularly in the last four months. The quality factor group posted positive returns in January and was the best performing bottom-up factor group over the last twelve months. All bottom-up factor group returns are positive from the inception of the Fund to the end of January. Within our top-down factor groups, our macroeconomic and country aggregate factors posted positive returns in January as countries with superior macroeconomic and bottom-up metrics outperformed those exhibiting relatively weaker metrics. Fund holdings in the consumer staples, financials, and energy sectors, in addition to an overweight position in energy, contributed the most to relative outperformance. Holdings in the healthcare, consumer discretionary, and industrials sectors offset a portion of the relative performance. Relative performance for the month can be mostly attributed to stock selection.

The largest contributor to performance was beverage company, C&C Group Plc (United Kingdom). Additional top contributors included financial services company, FIBRA Macquarie México (Mexico), liquid crystal display manufacturer, Coretronic Corp. (Taiwan), investment management firm, AGF Management (Canada), and paper products manufacturer, Canfor Pulp Products (Canada). The largest detractor to performance was pharmaceutical products distributor, Australian Pharmaceutical Industries Ltd. (Australia). Additional top detractors included automobile services provider, Bilia AB (Sweden), pharmaceutical company, Hikma Pharmaceuticals Plc (United Kingdom), digital communications & mailroom equipment provider, Neopost SA (France), and bakery retailer, Greggs Plc (United Kingdom).

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$0.2903
2017$0.3588
2016$0.2619
2015$0.2095
Load More

Short-term Capital Gains

2018$0.0000
2017$0.23757
2016$0.0000
2015$0.0000
Load More

Long-term Capital Gains

2018$0.0000
2017$0.47945
2016$0.0000
2015$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

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