Seeking value primarily in the non-US developed markets

The International Value Select portfolio is constructed from an equity universe composed of companies with market capitalizations typically greater than $5 billion located in non-US developed and emerging market countries. The strategy uses our international value equity strategy with two distinctions: the select portfolio has greater liquidity (by way of investing in larger capitalization companies) and fewer holdings. We believe that concentrating the holdings can compensate for the loss of small/mid cap exposure. The investment process comprises three stages: quantitative screening and initial analysis, fundamental research, and portfolio construction.

Benchmark
MSCI EAFE
Inception
March 31, 2005
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Strategy overview

The portfolio managers discuss our International Value Select strategy.

Portfolio managers

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

Performance

Table Header QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 10.1%10.1%13.2%13.9%19.3%7.6%7.4%
Strategy (net) 10.0%10.0%12.8%13.5%18.9%7.2%7.0%
MSCI EAFE 7.0%7.0%5.4%6.6%12.3%5.9%5.7%
Table Header QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 10.1%10.1%13.2%13.9%19.3%7.6%7.4%
Strategy (net) 10.0%10.0%12.8%13.5%18.9%7.2%7.0%
MSCI EAFE 7.0%7.0%5.4%6.6%12.3%5.9%5.7%
Table Header QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 10.1%10.1%13.2%13.9%19.3%7.6%7.4%
Strategy (net) 10.0%10.0%12.8%13.5%18.9%7.2%7.0%
MSCI EAFE 7.0%7.0%5.4%6.6%12.3%5.9%5.7%
Table Header QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 10.1%10.1%13.2%13.9%19.3%7.6%7.4%
Strategy (net) 10.0%10.0%12.8%13.5%18.9%7.2%7.0%
MSCI EAFE 7.0%7.0%5.4%6.6%12.3%5.9%5.7%
Fund 2024202320222021202020192018201720162015201420132012201120102009
Strategy (gross) 6.2%29.5%-6.7%10.4%6.9%21.2%-17.2%29.5%1.5%-1.3%-4.3%27.2%24.7%-9.6%13.2%35.4%
Strategy (net) 5.8%29.1%-7.1%10.0%6.5%20.8%-17.5%29.1%1.1%-1.7%-4.7%26.8%24.3%-9.9%12.7%34.8%
MSCI EAFE 4.3%18.9%-14.0%11.8%8.3%22.7%-13.4%25.6%1.5%-0.4%-4.5%23.3%17.9%-11.7%8.2%32.5%
Table Header
Strategy (gross)
Strategy (net)
MSCI EAFE
2024202320222021202020192018201720162015201420132012201120102009
6.2%29.5%-6.7%10.4%6.9%21.2%-17.2%29.5%1.5%-1.3%-4.3%27.2%24.7%-9.6%13.2%35.4%
5.8%29.1%-7.1%10.0%6.5%20.8%-17.5%29.1%1.1%-1.7%-4.7%26.8%24.3%-9.9%12.7%34.8%
4.3%18.9%-14.0%11.8%8.3%22.7%-13.4%25.6%1.5%-0.4%-4.5%23.3%17.9%-11.7%8.2%32.5%

Portfolio (as of March 31, 2025)

Benchmark: MSCI EAFE
Asset Allocation
Table Header Strategy
Stocks 99.3%
Cash 0.7%
Strategy Characteristics
Table Header Strategy Benchmark
No. of holdings 63 694
Weighted avg. market cap (US $MM) $71,830 $78,253
FY2 price/earnings 11.2 13.1
Price/book value 1.6 1.9
Dividend yield (%) 3.0 3.0
TOP 10 HOLDINGS
Security Country Percent
Alstom SA France 4.0%
Kering SA France 3.9%
Rolls-Royce Holdings Plc United Kingdom 3.8%
Reckitt Benckiser Group Plc United Kingdom 3.7%
Samsung Electronics Co., Ltd. South Korea 3.6%
Barclays PLC United Kingdom 3.4%
AstraZeneca PLC United Kingdom 3.1%
Renesas Electronics Corp. Japan 3.0%
Roche Holding AG Switzerland 2.8%
Canadian Pacific Kansas City Ltd. Canada 2.8%

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 Strategy Benchmark
Financials 20.1% 23.6%
Industrials 17.8% 17.8%
Information Technology 14.0% 8.0%
Health Care 12.8% 12.2%
Consumer Staples 10.5% 8.3%
Consumer Discretionary 8.1% 10.4%
Materials 5.2% 5.7%
Communication Services 4.1% 5.0%
Utilities 2.9% 3.4%
Energy 2.8% 3.7%
Real Estate 1.0% 1.9%
TOP 10 COUNTRIES
Country Strategy Benchmark
United Kingdom 32.3% 15.2%
France 19.0% 11.6%
Japan 11.2% 21.7%
Germany 7.1% 10.1%
Netherlands 7.0% 4.4%
South Korea 4.5% 0.0%
Italy 4.1% 3.1%
Switzerland 3.5% 10.0%
Canada 3.4% 0.0%
Belgium 2.7% 1.0%
Regional Allocation
  • Europe – other 75.7%
  • Pacific 12.5%
  • North America 5.2%
  • Emerging Asia 6.0%
  • Emerging Latin America 0.0%

Commentary (As of March 31, 2025)

Highlights

  • Global equity markets began the year on an optimistic note, but US stocks faltered amid tax policy uncertainty and shifting tariff pronouncements.
  • Global trade tensions are escalating, with the trade war introducing significant economic and geopolitical uncertainty.
  • Causeway’s global and international value portfolios focus on identifying undervalued stocks rather than positioning around macroeconomic trends.

Portfolio Attribution

The Portfolio underperformed the Index during the month, due primarily to stock selection. Portfolio holdings in the consumer durables & apparel, semiconductors & semi equipment, and transportation industry groups detracted from relative performance. Holdings in the pharmaceuticals & biotechnology, insurance, and technology hardware & equipment industry groups offset some of the underperformance compared to the Index. The largest detractor was multinational luxury conglomerate, Kering SA (France). Additional notable detractors included semiconductor company, Renesas Electronics Corp.(Japan), and rail operator, Canadian Pacific Kansas City Ltd. (Canada). The top contributor to return was Asian life insurer, Prudential Plc (United Kingdom). Other notable contributors included electric, gas & renewables power generation & distribution company, Enel SpA (Italy), and electronic equipment manufacturer, Samsung Electronics Co., Ltd. (South Korea).

Quarterly Investment Outlook

Global trade tensions are escalating, with the trade war introducing significant economic and geopolitical uncertainty. During the quarter, the US placed the most punitive tariffs on China. Meanwhile China is prioritizing economic stability, technological advancement, and domestic consumption to meet its ambitious growth targets. EU fiscal integration is accelerating, with growing urgency to deepen capital markets. Recognizing the need for greater self-reliance, European leaders have committed to military and economic revitalization. Germany, just weeks after its February election, approved substantial defense and infrastructure spending. Additionally, Chinese investment in Europe is likely to continue climbing as China diversifies its trade relationships. In contrast, the UK faces stagflation, with the Bank of England cautiously navigating persistent inflation and gilt market volatility amid slowing growth.

De-globalization and tariffs appear likely to dampen real growth, increase inflationary pressures, and create sector-level dislocations. However, these disruptions can generate mispricing and opportunities for active investors. Despite the likelihood of a more difficult economic environment ahead, we remain optimistic that we can exploit share price weakness in desirable stocks. This period of market dislocation provides an opportunity to add to positions in companies we believe will overcome tariffs and produce attractive multi-year returns. Companies with few competitors and strong pricing power have become especially valuable in this environment.

Causeway’s global and international value portfolios focus on identifying undervalued stocks rather than positioning around macroeconomic trends. Despite recent gains, non-US developed markets continue to trade at a significant discount to the US, where indices remain driven by a handful of AI-focused companies. The era of ultra-low interest rates is over, making near-term cash flows more attractive than speculative growth. Certain cyclical stocks now offer some of the lowest valuations since 2020 and are rising in our risk-adjusted return rankings. We are also focusing on companies providing mission-critical services to enterprises, which should see robust order growth regardless of tariff changes. As companies invest in digitalization and cloud transitions, IT Services firms are poised for renewed interest. Across sectors, Causeway targets companies improving efficiency, driving earnings, and boosting cash flow growth.

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 [email protected].