Seeking diversified exposure to international small cap companies

The Fund invests primarily in common stocks of companies with smaller market capitalizations located in developed and emerging markets outside the US. 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 US 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. The Fund’s investment objective is to seek long-term growth of capital.

YTD Return*
+9.02%
Nav*
$10.88, +0.05
Inception
October 20, 2014
Cusip
14949P703
Benchmark
MSCI ACWI ex USA Small Cap
Minimum Investment
$1,000,000
Sales Charge
None
Net Expense Ratio
1.17%
Gross Expense Ratio
1.99%
*As of June 10, 2019

Strategy overview

The portfolio managers discuss our International Small Cap strategy.

Portfolio managers

Head of Quantitative Research
Quantitative Portfolio Manager
Quantitative Portfolio Manager
Quantitative Portfolio Manager

Performance

QTD YTD 1 year3 years Since inception
Fund -4.8%6.2%-14.7%5.4%4.9%
MSCI ACWI ex USA Small Cap -2.9%7.1%-12.0%5.6%5.1%
QTD YTD 1 year3 years Since inception
Fund -4.8%6.2%-14.7%5.4%4.9%
MSCI ACWI ex USA Small Cap -2.9%7.1%-12.0%5.6%5.1%
QTD YTD 1 year3 years Since inception
Fund 11.6%11.6%-13.0%7.4%6.3%
MSCI ACWI ex USA Small Cap 10.4%10.4%-9.1%7.4%6.0%
QTD YTD 1 year3 years Since inception
Fund 11.6%11.6%-13.0%7.4%6.3%
MSCI ACWI ex USA Small Cap 10.4%10.4%-9.1%7.4%6.0%
2018201720162015
Fund -21.1%34.7%3.3%4.7%
MSCI ACWI ex USA Small Cap -17.9%32.1%4.3%3.0%
Fund
MSCI ACWI ex USA Small Cap
2018201720162015
-21.1%34.7%3.3%4.7%
-17.9%32.1%4.3%3.0%

Portfolio (as of May 31, 2019)

Benchmark: MSCI ACWI ex USA Small Cap
Asset Allocation
Fund
Stocks 97.6%
Cash 2.4%
Fund Characteristics
Fund Benchmark
No. of holdings 145
Weighted avg. market cap (US $MM) $1,351 $0
FY2 price/earnings 8.0 0.0
Price/book value 1.1 0.0
Net assets $63,004,470 -
TOP 10 ACTIVE HOLDINGS
Security Country Active weight*
Huaxin Cement Co., Ltd. China 2.2%
Radiant Opto-Electronics Corp. Taiwan 1.8%
EVRAZ Plc United Kingdom 1.8%
C&C Group Plc United Kingdom 1.8%
Adastria Co., Ltd. Japan 1.7%
Yuexiu Property Co., Ltd. China 1.7%
GungHo Online Entertainment, Inc. Japan 1.7%
HASEKO Corp. Japan 1.6%
Makalot Industrial Co., Ltd. Taiwan 1.6%
ASR Nederland NV Netherlands 1.6%

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.

*Active defined as Fund weight minus MSCI ACWI ex USA Small Cap Index weight. Holdings are subject to change.

SECTOR WEIGHTS
Sector Fund Benchmark
Industrials 14.4% 19.3%
Financials 12.9% 10.9%
Real Estate 12.0% 12.1%
Consumer Discretionary 12.0% 12.5%
Information Technology 10.2% 9.9%
Materials 8.7% 9.9%
Health Care 7.5% 7.4%
Consumer Staples 5.9% 6.4%
Communication Services 4.9% 4.9%
Energy 4.4% 3.4%
Equity Funds 3.2% 0.0%
Utilities 1.6% 3.4%
TOP 10 COUNTRIES
Country Fund Benchmark
Japan 17.5% 22.1%
United Kingdom 12.9% 13.7%
Taiwan 9.1% 4.0%
Australia 6.9% 5.3%
Sweden 6.2% 3.9%
Norway 5.7% 1.6%
Canada 4.8% 6.7%
China 4.7% 2.6%
South Korea 4.6% 3.6%
India 2.9% 3.3%
Regional Allocation
  • Europe – other 37.8%
  • Pacific 24.6%
  • Emerging Asia 22.1%
  • Emerging Latin America 5.4%
  • North America 4.7%
  • Emerging Europe, Middle East, Africa 3.0%

Commentary (As of April 30, 2019)

Highlights

  • Increasingly dovish commentary from the US Federal Reserve and the European Central Bank, along with progress on US-China trade negotiations, supported equity markets in March.

Portfolio attribution

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.

The largest contributor to performance was apparel company, Adastria Co., Ltd. (Japan). Additional top contributors included lithium battery producer, Simplo Technology Co., Ltd. (Taiwan), steel & iron distribution company, EVRAZ Plc (United Kingdom), apparel manufacturer, Makalot IndustrialCo, Ltd. (Taiwan), and property developer, China Aoyuan Group Ltd. (China). The largest detractor to performance was coal company, New Hope Corp. Ltd. (Australia). Additional top detractors included financial services company, Just Group Plc (United Kingdom), power generation & construction company, Tekfen Holding AS (Turkey), insurance company, ASR Nederland NV (Netherlands), and transportation company, Nobina AB (Sweden).

Investment outlook

The overall outlook for smaller cap equities remains favorable in our view. Smaller cap equities are currently exhibiting a higher long-term earnings-per-share growth trend than larger cap equities. Additionally, international smaller cap equities have exhibited greater valuation dispersion than larger cap equities on both a forward earnings yield basis and a price-to-book value basis, indicating more information content in valuation ratios for these equities. This characteristic has allowed us to construct a portfolio with lower valuation ratios relative to the Index without, in our view, compromising quality.

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 will be subject to risk.

Distributions

Dividends Short-term capital gains Long-term capital gains
2018 $0.3165 $0.0000 $0.0000
2017 $0.3792 $0.2375 $0.4794
2016 $0.2901 $0.0000 $0.0000
2015 $0.2407 $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: