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Global Value Equity

Strategy Profile

The global value portfolio is constructed from an equity universe composed of companies with market capitalizations greater than $1 billion located throughout the global developed and emerging market countries. The investment process is comprised of three stages: quantitative screening and initial analysis, fundamental research, and portfolio construction.

Inception Date30 Sept 2001
Benchmark MSCI ACWI

Performance

Fund Quarter to Date Year to Date 1 Year3 Year5 Year10 Year Since Inception
Gross % 11.4%11.4%3.0%9.6%5.0%15.0%10.5%
Net % 11.3%11.3%2.5%9.1%4.5%14.3%9.8%
MSCI ACWI 12.3%12.3%3.2%11.3%7.0%12.6%7.5%

Portfolio

Asset Allocation as of 31 Mar 2019

Stocks 97%
Cash 3%

Characteristics as of 31 Mar 2019

Causeway MSCI ACWI
No. of Holdings 49 2770
Wtd. Avg. Market Cap (Mn $US) $69,490 $129,635
FY2 Price/Earnings 10.6 13.9
Price/Book Value 1.4 2.3
Dividend Yield (%) 3.4 2.5

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. 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 Mar 2019

Financials17.75%
Information Technology14.03%
Industrials13.72%
Communication Services12.38%
Health Care10.14%
Energy8.72%
Materials7.57%
Consumer Staples4.80%
Consumer Discretionary4.25%
Utilities3.58%
Real Estate0.00%

(VS. Benchmark)

Financials16.59%
Information Technology15.71%
Industrials10.44%
Communication Services8.74%
Health Care11.65%
Energy6.28%
Materials4.88%
Consumer Staples8.37%
Consumer Discretionary10.76%
Utilities3.28%
Real Estate3.29%
Financials
Information Technology
Industrials
Communication Services
Health Care
Energy
Materials
Consumer Staples
Consumer Discretionary
Utilities
Real Estate
Other

TOP 10 COUNTRIES as of 31 Mar 2019

United States36.08%
United Kingdom21.59%
Japan10.30%
Germany6.92%
China6.00%
Switzerland4.32%
Canada3.58%
Italy3.28%
South Korea2.32%
Netherlands2.24%
Turkey0.33%
United Arab Emirates0.00%
Brazil0.00%
Chile0.00%
Colombia0.00%
Mexico0.00%
Peru0.00%
India0.00%
Indonesia0.00%
Malaysia0.00%
Pakistan0.00%
Philippines0.00%
Taiwan0.00%
Thailand0.00%
Czech Republic0.00%
Egypt0.00%
Greece0.00%
Hungary0.00%
Poland0.00%
Qatar0.00%
Russia0.00%
South Africa0.00%
Norway0.00%
Portugal0.00%
Spain0.00%
Sweden0.00%
Israel0.00%
Austria0.00%
Belgium0.00%
Denmark0.00%
Finland0.00%
France0.00%
Ireland0.00%
New Zealand0.00%
Singapore0.00%
Australia0.00%
Hong Kong0.00%

(VS. Benchmark)

United States55.05%
United Kingdom5.15%
Japan7.23%
Germany2.59%
China3.87%
Switzerland2.69%
Canada3.05%
Italy0.71%
South Korea1.53%
Netherlands1.08%
Turkey0.06%
United Arab Emirates0.08%
Brazil0.85%
Chile0.12%
Colombia0.05%
Mexico0.31%
Peru0.05%
India1.07%
Indonesia0.26%
Malaysia0.26%
Pakistan0.00%
Philippines0.13%
Taiwan1.33%
Thailand0.28%
Czech Republic0.02%
Egypt0.02%
Greece0.03%
Hungary0.04%
Poland0.13%
Qatar0.11%
Russia0.44%
South Africa0.69%
Norway0.22%
Portugal0.05%
Spain0.90%
Sweden0.80%
Israel0.16%
Austria0.07%
Belgium0.30%
Denmark0.54%
Finland0.31%
France3.40%
Ireland0.16%
New Zealand0.07%
Singapore0.40%
Australia2.10%
Hong Kong1.24%
United States
United Kingdom
Japan
Germany
China
Switzerland
Canada
Italy
South Korea
Netherlands
Turkey
United Arab Emirates
Brazil
Chile
Colombia
Mexico
Peru
India
Indonesia
Malaysia
Pakistan
Philippines
Taiwan
Thailand
Czech Republic
Egypt
Greece
Hungary
Poland
Qatar
Russia
South Africa
Norway
Portugal
Spain
Sweden
Israel
Austria
Belgium
Denmark
Finland
France
Ireland
New Zealand
Singapore
Australia
Hong Kong
Other

TOP 10 HOLDINGS as of 31 Mar 2019

Security Country Industry % of Total
Micro Focus International Plc United Kingdom Software & Services 3.6
Volkswagen AG Germany Automobiles & Components 3.6
Takeda Pharmaceutical Co., Ltd. Japan Pharmaceuticals & Biotechnology 3.5
UniCredit S.p.A. Italy Banks 3.3
British American Tobacco plc United Kingdom Food Beverage & Tobacco 3.0
China Mobile Ltd. China Telecommunication Services 2.9
Halliburton Co. United States Energy 2.9
Oracle Corp. United States Software & Services 2.9
BASF SE Germany Materials 2.7
Prudential Plc United Kingdom Insurance 2.7

Holdings are subject to change.

Approach

The global value portfolio is constructed from an equity universe composed of companies with market capitalizations greater than $1 billion located throughout the global developed and emerging market countries. The investment process is comprised of three stages: quantitative screening and initial analysis, fundamental research, and portfolio construction.

Our global investment philosophy is value-driven with a fundamentally based, bottom-up approach to stock selection. We believe that companies derive their value from the contribution of yield and profitable re-investment of earnings back into the company.

Our philosophy on risk management is simple. We believe risk is best measured by the volatility of a portfolio's returns, not its dispersion from a benchmark. In our view, investors are rewarded over the long term by a reduction in volatility. Our goal is to construct a portfolio that provides consistent long-term, risk-adjusted returns.

The Causeway Global Value portfolio is a fully invested, typically 35-55 stock portfolio, typically with a value bias. Sector and regional weights are by-products of our bottom-up approach to stock selection.

Commentary

PERFORMANCE REVIEW for the month ended 28 Feb 2019


Equity markets continued to ascend in February – likely buoyed by anticipated accommodative monetary policy globally as well as constructive US-China trade negotiations. The top performing markets in our investable universe were Hong Kong, Denmark, Ireland, Greece, and Colombia. The worst performing markets were South Africa, Qatar, Pakistan, Indonesia, and Brazil. The best performing sectors in the MSCI ACWI Index* (“Index”) were information technology, industrials, and financials. The worst performing sectors were real estate, communication services, and consumer discretionary.

The Portfolio outperformed the Index during the month, due primarily to stock selection. Portfolio holdings in the software & services, banks, materials, health care equipment & services, and retailing industry groups contributed to relative performance. Holdings in the telecommunication services, energy, capital goods, and media & entertainment industry groups, along with an underweight position in the technology hardware & equipment industry group, offset some of the outperformance. The top contributor to return was enterprise infrastructure software company, Micro Focus International Plc (United Kingdom). Other notable contributors included banking & financial services company, UniCredit S.p.A. (Italy), pharmaceutical company, AstraZeneca Plc (United Kingdom), paints & coatings producer, Akzo Nobel (Netherlands), and life insurer, Prudential Plc (United Kingdom). The largest detractor was internet services provider, Baidu (China). Additional notable detractors included oil refiner, Marathon Petroleum Corp. (United States), telecommunication services provider, KDDI Corp. (Japan), energy exploration & production company, Halliburton Co.(United States), and travel & tourism technology company, Sabre Corp. (United States).**

*Effective October 1, 2018, the Global Value Equity Composite’s benchmark changed from the MSCI World Index to the MSCI ACWI Index. The MSCI ACWI Index is a free float-adjusted market capitalization index, designed to measure the equity market performance of developed and emerging markets, consisting of 23 developed country indices, including the U.S, and 24 emerging market country indices. Prior to October 1, 2018, the benchmark index for the Global Value Equity Composite was the MSCI World Index. This Index is a free float-adjusted market capitalization weighted index, designed to measure developed market equity performance, consisting of 23 developed country indices, including the U.S. The Indices are gross of withholding taxes, assume reinvestment of dividends and capital gains, and assume no management, custody, transaction or other expenses. It is not possible to invest directly in an index.

**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 portfolio holdings and characteristics are subject to change. There is no guarantee that any forecasts made will come to pass.The securities identified and described above 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.  Past performance does not guarantee future results.  For a description of our performance attribution methodology, or to obtain a list showing every holding's contribution to the overall account's performance during the quarter, please contact our product manager, Kevin Moutes, at 310-231-6116 or moutes@causewaycap.com.

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