Seeking value primarily in developed markets worldwide

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

Benchmark
MSCI ACWI
Inception
September 30, 2001

Strategy overview

The portfolio managers discuss our Global 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

QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) -6.2%4.4%-6.3%5.8%3.1%11.3%10.0%
Strategy (net) -6.3%4.3%-6.8%5.3%2.6%10.7%9.3%
MSCI ACWI -2.6%9.4%-0.8%9.7%5.8%10.0%7.3%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) -6.2%4.4%-6.3%5.8%3.1%11.3%10.0%
Strategy (net) -6.3%4.3%-6.8%5.3%2.6%10.7%9.3%
MSCI ACWI -2.6%9.4%-0.8%9.7%5.8%10.0%7.3%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 11.4%11.4%3.0%9.6%5.0%15.0%10.5%
Strategy (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%
QTD YTD 1 year3 years5 years10 years Since inception
Strategy (gross) 11.4%11.4%3.0%9.6%5.0%15.0%10.5%
Strategy (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%
Fund 2018201720162015201420132012201120102009
Strategy (gross) -10.2%19.2%8.8%-5.3%6.5%30.6%17.8%-0.2%19.8%41.7%
Strategy (net) -10.1%19.2%8.8%-5.4%6.5%30.7%17.7%0.0%0.0%0.0%
MSCI ACWI -11.1%17.9%7.7%-6.3%5.4%29.2%16.5%-1.3%18.5%40.1%
Strategy (gross)
Strategy (net)
MSCI ACWI
2018201720162015201420132012201120102009
-10.2%19.2%8.8%-5.3%6.5%30.6%17.8%-0.2%19.8%41.7%
-10.1%19.2%8.8%-5.4%6.5%30.7%17.7%0.0%0.0%0.0%
-11.1%17.9%7.7%-6.3%5.4%29.2%16.5%-1.3%18.5%40.1%

Portfolio (as of May 31, 2019)

Benchmark: MSCI ACWI
Asset Allocation
Strategy
Stocks 99.4%
Cash 0.6%
Strategy Characteristics
Strategy Benchmark
No. of holdings 50 2851
Weighted avg. market cap (US $MM) $70,419 $125,986
FY2 price/earnings 10.1 13.5
Price/book value 1.3 2.2
Dividend yield (%) 3.5 2.6
TOP 10 HOLDINGS
Security Country Percent
Volkswagen AG Germany 3.7%
Takeda Pharmaceutical Co., Ltd. Japan 3.6%
UniCredit S.p.A. Italy 3.1%
China Mobile Ltd. China 3.1%
Micro Focus International Plc United Kingdom 2.9%
Sabre Corp. United States 2.9%
Alaska Air Group, Inc. United States 2.9%
Linde Plc United States 2.8%
ABB Ltd. Switzerland 2.7%
BASF SE Germany 2.7%

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 Strategy Benchmark
Information Technology 16.0% 15.7%
Financials 15.2% 17.0%
Industrials 15.0% 10.5%
Communication Services 12.3% 8.9%
Health Care 10.8% 11.4%
Materials 9.0% 4.8%
Energy 8.6% 5.9%
Consumer Discretionary 4.3% 10.7%
Consumer Staples 4.2% 8.5%
Utilities 4.1% 3.3%
Real Estate 0.0% 3.3%
TOP 10 COUNTRIES
Country Strategy Benchmark
United States 36.1% 55.0%
United Kingdom 21.6% 5.2%
Japan 10.3% 7.2%
Germany 6.9% 2.6%
China 6.0% 3.9%
Switzerland 4.3% 2.7%
Canada 3.6% 3.0%
Italy 3.3% 0.7%
South Korea 2.3% 1.5%
Netherlands 2.2% 1.1%
Regional Allocation
  • North America 40.6%
  • Europe – other 37.3%
  • Pacific 11.5%
  • Emerging Asia 9.7%
  • Emerging Europe, Middle East, Africa 0.3%

Commentary (As of April 30, 2019)

Highlights

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

Portfolio attribution

The Portfolio underperformed the Index during the month, due primarily to stock selection. Portfolio holdings in the telecommunication services, banks, automobiles & components, energy, and technology hardware & equipment industry groups detracted from relative performance. Holdings in the food beverage & tobacco, pharmaceuticals & biotechnology, and healthcare equipment & services industry groups, as well as an underweight position in the diversified financials and food & staples retailing industry groups, offset some of the underperformance. The largest detractor was automobile manufacturer, Volkswagen AG (Germany). Additional notable detractors included banking & financial services company, Barclays PLC (United Kingdom), banking & financial services company, UniCredit S.p.A. (Italy), telecommunication services provider, KDDI Corp. (Japan), and passenger & cargo airline, Alaska Air Group, Inc. (United States). The top contributor to return was British American Tobacco plc (United Kingdom). Other notable contributors included enterprise infrastructure software company, Micro Focus International plc (United Kingdom), Takeda Pharmaceutical Co., Ltd. (Japan), pharmaceutical & consumer healthcare products producer, Novartis AG (Switzerland), and snack & confectionary producer, Mondelez International, Inc. (United States).

Investment outlook

With abundant liquidity underpinning the demand for investable assets, long duration equities responded favorably to the dovish policy indications from the Fed. Investors appear indifferent to valuation, focusing instead on growth and the promise of earnings and cash flow further into the future. Money remains cheap, facilitating more public and private sector financial leverage. As investors are willing to pay sizable valuation multiples for growth, companies that must restructure operationally to expand earnings are having a tough time attracting investor interest. We are most interested in undervalued stocks, often in cyclical industries, with managements committed to streamlining operations. We prefer companies that reward shareholders with generous dividend payments and/or share buybacks. We believe these efforts to boost profitability through cost savings and revenue enhancements should position these companies well in times of leaner global growth. We recognize style investing is cyclical and believe the value characteristics currently embedded in client portfolios should prove effective if growth does not meet lofty market expectations.

 

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.