Seeking value primarily in the non-US developed markets

The Fund invests primarily in common stocks of companies in developed countries outside the US. Normally, the Fund invests at least 80% of its total assets in stocks of companies in a number of foreign countries and invests the majority of its total assets in companies that pay dividends or repurchase their shares. The Fund may invest up to 15% of its total assets in companies in emerging (less developed) markets.

YTD Return*
-1.41%
Nav*
$15.4, -0.15
Inception
October 26, 2001
Cusip
14949P208
Benchmark
MSCI EAFE
Minimum Investment
$1,000,000
Sales Charge
None
Total Expense Ratio
0.88%
*As of January 23, 2020

Strategy overview

The portfolio managers discuss our International Value strategy.

Portfolio managers

Chief Executive Officer
Fundamental Portfolio Manager
President
Head of Fundamental Research
Fundamental Portfolio Manager
Fundamental Portfolio Manager
Fundamental Portfolio Manager
Fundamental Portfolio Manager
Fundamental Portfolio Manager
Fundamental Portfolio Manager
Fundamental Portfolio Manager

Performance

QTDYTD1 year3 years5 years10 yearsSince inception
Fund11.3%20.1%20.1%7.5%3.9%5.8%7.1%
MSCI EAFE8.2%22.7%22.7%10.1%6.2%6.0%6.5%
QTDYTD1 year3 years5 years10 yearsSince inception
Fund11.3%20.1%20.1%7.5%3.9%5.8%7.1%
MSCI EAFE8.2%22.7%22.7%10.1%6.2%6.0%6.5%
QTDYTD1 year3 years5 years10 yearsSince inception
Fund11.3%20.1%20.1%7.5%3.9%5.8%7.1%
MSCI EAFE8.2%22.7%22.7%10.1%6.2%6.0%6.5%
QTDYTD1 year3 years5 years10 yearsSince inception
Fund11.3%20.1%20.1%7.5%3.9%5.8%7.1%
MSCI EAFE8.2%22.7%22.7%10.1%6.2%6.0%6.5%
201920182017201620152014201320122011201020092008200720062005200420032002
Fund20.1%-18.6%27.2%0.4%-3.0%-6.2%24.2%24.5%-10.6%12.3%32.3%-41.9%7.9%26.1%8.1%26.6%45.9%-10.9%
MSCI EAFE22.7%-13.4%25.6%1.5%-0.4%-4.5%23.3%17.9%-11.7%8.2%32.5%-43.1%11.6%26.9%14.0%20.7%39.2%-15.7%
Fund
MSCI EAFE
201920182017201620152014201320122011201020092008200720062005200420032002
20.1%-18.6%27.2%0.4%-3.0%-6.2%24.2%24.5%-10.6%12.3%32.3%-41.9%7.9%26.1%8.1%26.6%45.9%-10.9%
22.7%-13.4%25.6%1.5%-0.4%-4.5%23.3%17.9%-11.7%8.2%32.5%-43.1%11.6%26.9%14.0%20.7%39.2%-15.7%

Portfolio (as of December 31, 2019)

Benchmark: MSCI EAFE
Asset Allocation
Fund
Stocks98.8%
Cash1.2%
Fund Characteristics
FundBenchmark
No. of holdings 59 918
Weighted avg. market cap (US $MM)$64,303$55,375
FY2 price/earnings12.114.5
Price/book value1.31.7
Net assets$6,133,265,303-
TOP 10 HOLDINGS
Security Country Percent
Volkswagen AGGermany4.6%
Takeda Pharmaceutical Co., Ltd.Japan3.9%
BASF SEGermany3.7%
UniCredit S.p.A.Italy3.5%
China Mobile Ltd.China3.1%
FANUC Corp.Japan3.0%
ABB Ltd.Switzerland2.9%
Siemens AGGermany2.9%
British American Tobacco plcUnited Kingdom2.9%
Barclays PlcUnited Kingdom2.7%

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.

Holdings are subject to change.

SECTOR WEIGHTS
Sector Fund Benchmark
Industrials19.6%15.0%
Financials18.9%18.6%
Health Care11.9%12.2%
Communication Services10.6%5.2%
Energy8.9%4.9%
Materials8.9%7.1%
Information Technology7.0%7.1%
Consumer Staples6.0%11.3%
Consumer Discretionary5.6%11.6%
Utilities1.4%3.7%
Real Estate0.0%3.5%
TOP 10 COUNTRIES
Country Fund Benchmark
United Kingdom26.7%16.5%
Germany20.1%8.7%
Japan12.5%24.5%
France7.7%11.4%
Switzerland7.5%9.3%
China6.3%0.0%
South Korea5.1%0.0%
Canada3.9%0.0%
Italy3.5%2.3%
Netherlands2.9%4.0%
Regional Allocation
  • Europe – other 71.1%
  • Pacific 12.5%
  • Emerging Asia 11.4%
  • North America 3.9%

Commentary (As of December 31, 2019)

Highlights

  • December's rising equity markets capped a calendar year of surging stock prices, as central banks, attempting to prolong economic expansion, implemented increasingly accommodative monetary policies.
  • We believe European countries may join the US and China and increase fiscal spending. To fund this spending, European governments will need to sell more bonds, which may put upward pressure on interest rates as supply meets, and potentially outpaces, demand.
  • In the absence of a recession, earnings of economically sensitive stocks should attract enough attention to garner a re-rating of valuation multiples. We seek talented senior management teams steering financially strong companies through profitability setbacks by focusing on reaccelerating earnings and cash flow.

Portfolio attribution

Causeway International Value Fund (“Fund”) outperformed the Index during the month, due primarily to stock selection. Fund holdings in the technology hardware & equipment, telecommunication services, energy, food beverage & tobacco, and capital goods industry groups contributed to performance compared to the Index. Holdings in the pharmaceuticals & biotechnology, materials, and software & services industry groups, along with an underweight position in the semiconductors & semi equipment and diversified financials industry groups, detracted from relative performance. The top contributor to return was electronic equipment manufacturer, Samsung Electronics Co., Ltd. (South Korea). Other notable contributors included mobile telecommunications operator, China Mobile Ltd. (China), power & automation technology company, ABB Ltd. (Switzerland), British American Tobacco Plc (United Kingdom), and oil & natural gas producer, Encana (Canada). The largest detractor was Takeda Pharmaceutical Co., Ltd. (Japan). Additional notable detractors included robotics manufacturer, FANUC Corp. (Japan), jet engine manufacturer, Rolls-Royce Holdings Plc (United Kingdom), telecommunication services provider, Vodafone Group (United Kingdom), and enterprise infrastructure software company, Micro Focus International Plc. (United Kingdom).

Investment outlook

We believe that much of the global central bank monetary expansion is in the rear-view mirror. Massive liquidity creation has suppressed market volatility and favored momentum relative to value-oriented trading. With central banks curtailing accommodative policies, value stocks should eventually rebound. In the absence of a recession, earnings of economically sensitive stocks should attract enough attention to garner a re-rating of valuation multiples. This process began last year, as cyclical stocks outperformed broad indices in the last four months of 2019. In 2020, we expect investors to look to diversifying systematic risks, and risk aversion could rise with an escalation of US-Iranian conflict. Therefore, transparency of investment risks and full financial disclosure will become increasingly important. These preferences may favor well-established companies with a history of rewarding shareholders (via dividends and share buybacks) and place a greater hurdle rate of return on speculative, unprofitable companies. We seek talented senior management teams steering financially strong companies through profitability setbacks by focusing on reaccelerating earnings and cash flow. To complement these “self-help” stocks, we seek consistent cash generating companies with generous dividend payouts. In years of more traditional equity market returns, rather than runaway bull markets, stability of cash flows and income should attract investor attention.

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. A company may reduce or eliminate its dividend, causing losses to a fund. 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
2019$0.4953$0.0497$0.1781
2018$0.3750$0.0000$0.1083
2017$0.3165$0.0000$0.0000
2016$0.2901$0.0000$0.0000
2015$0.2750$0.0000$0.0000
2014$0.3788$0.0000$0.0000
2013$0.1645$0.0000$0.0000
2012$0.2757$0.0000$0.0000
2011$0.3813$0.0000$0.0000
2010$0.1939$0.0000$0.0000
2009$0.1875$0.0000$0.0000
2008$0.5135$0.0000$0.4558
2007$0.4536$0.6606$3.3443
2006$0.2289$0.0222$0.8650
2005$0.3718$0.1962$0.3833
2004$0.2647$0.1379$0.3093
2003$0.1813$0.0037$0.0550
2002$0.1196$0.0000$0.0000
2001$0.0000$0.0000$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: