Combining our time-tested abilities in developed and emerging international markets
The Causeway International Opportunities strategy is a blend of Causeway’s best skills, combining our international value (bottom-up, fundamental, developed international markets, excluding the US) and emerging markets (quantitatively managed with a targeted tracking error of 5%) equity strategies. Tracking error is a measurement of dispersion from a benchmark index. Our quantitative research team developed a proprietary multi-factor model that measures the relative attractiveness of emerging markets, and guides the portfolio managers in tactically allocating between the developed and emerging portfolio segments.
- Benchmark
- MSCI ACWI ex US
- Inception
- June 30, 2007
Portfolio managers
Brian Woonhyung Cho
Mr. Cho is a fundamental portfolio manager at Causeway. He joined the firm in September 2013 and has been a portfolio manager since January 2021. His current responsibilities include coverage of companies in the technology and communication services sectors.
From 2011 to 2013, Mr. Cho was a vice president at BofA-ML Equity Research, covering the IT hardware and supply chain sector. From 2007 to 2011, he worked as an associate at Goldman Sachs Equity Research covering the same sector. From 2006 to 2007, he worked as an analyst at Morgan Stanley Equity Research covering the internet and interactive software sector. Prior to that, he worked as an analyst at PA Consulting Group in the financial services practice.
Mr. Cho earned a BSc in management science from Massachusetts Institute of Technology.
Read our interview with Brian about value investing in the technology sector.
Jonathan Eng
Mr. Eng is a director and fundamental portfolio manager at Causeway and is responsible for investment research in the global consumer discretionary, industrials, and energy sectors. He joined the firm in July 2001 and has been a portfolio manager since February 2002.
From 1997 to 2001, Mr. Eng was an equity research associate for the Hotchkis and Wiley division of Merrill Lynch Investment Managers (HW-MLIM). In 1996, Mr. Eng worked as a summer research associate for Hotchkis and Wiley, performing U.K. and European equity research. From 1993 to 1995, Mr. Eng analyzed merger and acquisition candidates at Slusser Associates. From 1990 to 1993, Mr. Eng worked as a middle market corporate lender for Bank of Boston.
Mr. Eng earned a BA in history and economics from Brandeis University and an MBA from the UCLA Anderson Graduate School of Management
Joe Gubler, CFA
Mr. Gubler is a quantitative portfolio manager at Causeway. He joined the firm in 2005 and has been a portfolio manager since January 2014. In addition to managing quantitative portfolios and conducting alpha research, Mr. Gubler also leads the efforts to maintain and enhance Causeway’s proprietary risk models. He is also a member of the operating committee.
From 1999 to 2005, Mr. Gubler worked as a software engineer, with employers ranging from startups to established businesses such as Monster.com. From 1998 to 1999, Mr. Gubler worked as a staff scientist for News Corporation, conducting studies on the RF propagation of broadcast signals. While studying astrophysics at UC San Diego, Mr. Gubler worked as a graduate research assistant in the Jet Propulsion Laboratory's stellar interferometry group.
Mr. Gubler earned a BS, cum laude, in physics from UC Irvine, an MS in physics from UC San Diego, and an MBA from the UCLA Anderson Graduate School of Management. Mr. Gubler is a CFA charterholder.
Harry Hartford
Head of Fundamental Research
Fundamental Portfolio Manager
Mr. Hartford is the president at Causeway, fundamental portfolio manager, and head of fundamental research. Mr. Hartford co-founded the firm in June 2001 and is a member of the operating committee.
From 1996 to June 2001, Mr. Hartford was a managing director for the Hotchkis & Wiley division of Merrill Lynch Investment Managers (HW-MLIM) and co-head of the firm's HW-MLIM international and global value team. From 1994 to 1996, Mr. Hartford was a portfolio manager for Hotchkis and Wiley. From 1984 to 1994, Mr. Hartford was with The Investment Bank of Ireland, where he gained ten years’ experience in both international and global equity management. During this time, Mr. Hartford also managed the Irish Investment Fund, a closed-end country fund quoted on the NYSE. Before entering the investment business, Mr. Hartford lectured in micro and macroeconomics at Oklahoma State University.
Mr. Hartford earned a BA, with honors, in economics from the University of Dublin, Trinity College, an MSc in economics from Oklahoma State University, and is a Phi Kappa Phi member. Mr. Hartford is a member of The Ireland Funds America Board of Directors.
Arjun Jayaraman, PhD, CFA
Quantitative Portfolio Manager
Dr. Jayaraman is a director, quantitative portfolio manager and head of the quantitative research at Causeway and has been with the firm since January 2006. Dr. Jayaraman’s responsibilities and research include stock selection, asset allocation, risk model development, and portfolio construction.
From 2004 to 2005, Dr. Jayaraman was a portfolio manager at PanAgora Asset Management. He was the lead portfolio manager on the non-U.S. large cap core equity portfolios and was the co-portfolio manager on the global large cap core equity portfolios. From 2000 to 2004, Dr. Jayaraman managed the same portfolios at Putnam Investments, in addition to working closely with the teams that managed Putnam's traditional non-U.S. strategies. From 1998 to 2000, Dr. Jayaraman worked as a quantitative analyst at Harborview Trading Associates.
Dr. Jayaraman earned a PhD from New York University at the Stern School of Business and a BA in economics from Columbia University. Dr. Jayaraman is a CFA charterholder.
Sarah Ketterer
Fundamental Portfolio Manager
Ms. Ketterer is the chief executive officer at Causeway, fundamental portfolio manager, and is responsible for investment research across all sectors. Ms. Ketterer co-founded the firm in June 2001 and is a member of the operating committee.
From 1996 to 2001, Ms. Ketterer worked for the Hotchkis & Wiley division of Merrill Lynch Investment Managers (HW-MLIM). At HW-MLIM, she was a managing director and co-head of the firm's HW-MLIM International and Global Value team. From 1990 to 1996, Ms. Ketterer was a portfolio manager at Hotchkis & Wiley, where she founded the International Equity product.
Ms. Ketterer earned a BA in economics and political science from Stanford University and an MBA from the Tuck School, Dartmouth College. Ms. Ketterer serves on the Stanford University Board of Trustees, is a member of UT Southwestern President’s Advisory Board, is on the advisory board of Portal Schools, and is a supporter of Girls Who Invest. She previously served as a board member and chair of the Los Angeles World Affairs Council and Town Hall and chair of the investment committee of the Music Center Foundation.
MacDuff Kuhnert, CFA
Mr. Kuhnert is a director and a quantitative portfolio manager at Causeway and has been with the firm since its inception in June 2001. Mr. Kuhnert’s responsibilities and research include stock selection, asset allocation, risk model development, and portfolio construction.
From 1996 to 2001, Mr. Kuhnert worked for the international team of the Hotchkis & Wiley division of Merrill Lynch Investment Managers (HW-MLIM) as a quantitative research associate. During his tenure at HW-MLIM, Mr. Kuhnert created and developed advanced quantitative models used in the international value investment process. He also helped develop the team’s first equity risk model.
Mr. Kuhnert earned a BA in chemistry from Dartmouth College. He is a CFA charterholder, a member of the CFA Society of Los Angeles, and a member of the Chicago Quantitative Alliance.
Ellen Lee
Ms. Lee is a director and fundamental portfolio manager at Causeway and is responsible for investment research in the global consumer and utilities sectors. Prior to the current role, she also covered transportation and autos. She joined the firm in August 2007 and has been a portfolio manager since January 2015.
During the summer of 2006, Ms. Lee interned at Tiger Asia, a long short equity hedge fund focused on China, Japan, and Korea. From 2001 to 2004, Ms. Lee was an associate in the mergers and acquisitions division of Credit Suisse First Boston in Seoul, where she advised Korean corporates and multinational corporations. From 1999 to 2000, she was an analyst in the mergers and acquisitions division of Credit Suisse First Boston in Hong Kong.
Ms. Lee earned a BA in business administration from Seoul National University and an MBA from the Stanford Graduate School of Business. She currently serves on the audit and investment committee at the Center for Early Education in West Hollywood.
Read our profile of Ellen .
Conor Muldoon, CFA
Mr. Muldoon is a director and fundamental portfolio manager at Causeway and is responsible for investment research in the global financials and materials sectors. He joined the firm in August 2003 and has been a portfolio manager since September 2010. He is also a member of the operating committee.
From 1995 to 2003, Mr. Muldoon was an investment consultant for Fidelity Investments where he served as a liaison between institutional clients and investment managers within Fidelity. He was responsible for communicating current information on the financial markets, the economy and investment performance.
Mr. Muldoon earned a BSc and an MA from the University of Dublin, Trinity College and an MBA, with high honors, from the University of Chicago. Mr. Muldoon was inducted into the Beta Gamma Sigma honors society and is also a CFA charterholder.
Ryan Myers
Mr. Myers is a quantitative portfolio manager at Causeway. He joined the firm in June 2013 and has been a portfolio manager since January 2021. His responsibilities include alpha research, stock selection, and portfolio construction.
From 2010 to 2012, Mr. Myers served as chief investment officer of Iron Castle Asset Management, an investment partnership focused on mid-cap U.S. equities. From 2007 to 2008, Mr. Myers worked as an analyst at Canyon Partners, where he covered the cable, media, telecom and satellite sectors. From 2005 to 2007, Mr. Myers was an associate for Oaktree Capital Management in the distressed opportunities group. Mr. Myers began his professional career in 2003 as an investment banking analyst at Goldman Sachs in the technology, media and telecom group.
Mr. Myers earned a BA, magna cum laude, in economics from Harvard University, where he was elected to Phi Beta Kappa. He earned an MBA from the Stanford Graduate School of Business, where he was an Arjay Miller Scholar. Mr. Myers currently serves on the Board of Trustees of the Yosemite Conservancy, an organization dedicated to supporting projects and programs that preserve Yosemite National Park and enrich the visitor experience.
Steven Nguyen, CFA
Mr. Nguyen is a director and fundamental portfolio manager at Causeway and is responsible for investment research in utilities & renewables, healthcare, and business services. He joined the firm in April 2012 and has been a portfolio manager since January 2019.
From 2006 to 2012, Mr. Nguyen was a senior credit analyst at Bradford & Marzec covering high yield and investment grade companies in the telecommunication services, cable, media, gaming, insurance, and REIT industries. From 2003 to 2006, Mr. Nguyen was a credit analyst/portfolio manager in the corporate bond department of Allegiance Capital.
Mr. Nguyen earned a BA in business economics from Brown University and an MBA, with honors, from the UCLA Anderson School of Management. Mr. Nguyen was the president of the Anderson Student Asset Management association. Mr. Nguyen is a CFA charterholder and has completed the CFA Institute Certificate in ESG Investing program.
Alessandro Valentini, CFA
Mr. Valentini is a director and fundamental portfolio manager at Causeway and is responsible for investment research in the global healthcare, financials, and real estate sectors. He joined the firm in July 2006 and has been a portfolio manager since April 2013.
During the summer of 2005, Mr. Valentini worked as a research analyst at Thornburg Investment Management, where he conducted fundamental research for the International Value Fund and the Value Fund, focusing on the European telecommunication and Canadian oil sectors. From 2000 to 2004, Mr. Valentini worked as a financial analyst at Goldman Sachs in the European equities research-sales division in New York.
Mr. Valentini earned an MBA from Columbia Business School, with honors, an MA in economics from Georgetown University and a BS, magna cum laude, from Georgetown University. Mr. Valentini was inducted into the Beta Gamma Sigma honors society, is a Phi Beta Kappa member, and is a CFA charterholder.
Performance
Account returns for the Causeway International Opportunities Composite (“International Opportunities Composite”) are calculated daily. Monthly account returns are calculated by geometrically linking the daily returns. The return of the International Opportunities Composite is calculated monthly by weighting monthly account returns by the beginning market values. Valuations and returns are computed and stated in US dollars. Returns include the reinvestment of interest, dividends and any capital gains. Returns are calculated gross of withholding taxes on dividends, interest income, and capital gains. Past performance is no guarantee of future performance. Gross-of-fees returns are presented before management, performance and custody fees but after trading expenses. Net-of-fees returns are presented after the deduction of actual management fees, performance-based fees, and all trading expenses, but before custody fees. Causeway’s basic management fee schedules are described in its firm brochure pursuant to Part 2 of Form ADV. A complete list and description of firm composites is available upon request. This information supplements the composite presentation at Composite Performance. Investing involves risk including loss of principal. In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Diversification does not prevent all investment losses.
Portfolio (as of May 31, 2025)
Asset Allocation
| Table Header | Strategy |
|---|---|
| Stocks | 98.4% |
| Cash | 1.6% |
Strategy Characteristics
| Table Header | Strategy | Benchmark |
|---|---|---|
| No. of holdings | 249 | 1983 |
| Weighted avg. market cap (US $MM) | $84,245 | $94,402 |
| FY2 price/earnings | 10.7 | 13.1 |
| Price/book value | 1.6 | 1.9 |
| Dividend yield (%) | 2.7 | 2.9 |
TOP 10 HOLDINGS
| Security | Country | Percent |
|---|---|---|
| Rolls-Royce Holdings Plc | United Kingdom | 3.0% |
| Alstom SA | France | 2.8% |
| Barclays PLC | United Kingdom | 2.8% |
| Kering SA | France | 2.8% |
| Reckitt Benckiser Group Plc | United Kingdom | 2.7% |
| Renesas Electronics Corp. | Japan | 2.4% |
| AstraZeneca PLC | United Kingdom | 2.3% |
| Canadian Pacific Kansas City Ltd. | Canada | 2.0% |
| Akzo Nobel | Netherlands | 2.0% |
| Roche Holding AG | Switzerland | 1.9% |
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 | 19.8% | 25.0% |
| Industrials | 16.3% | 14.6% |
| Information Technology | 15.0% | 12.8% |
| Health Care | 11.0% | 8.3% |
| Consumer Discretionary | 10.8% | 10.4% |
| Consumer Staples | 8.2% | 7.0% |
| Communication Services | 5.8% | 6.3% |
| Materials | 5.4% | 6.2% |
| Utilities | 2.4% | 3.2% |
| Real Estate | 1.3% | 1.8% |
| Equity Funds | 0.9% | 0.0% |
| Energy | 0.8% | 4.5% |
TOP 10 COUNTRIES
| Country | Strategy | Benchmark |
|---|---|---|
| United Kingdom | 23.0% | 9.4% |
| France | 13.4% | 7.1% |
| China | 9.4% | 8.4% |
| Japan | 9.1% | 13.9% |
| Germany | 6.7% | 6.6% |
| Taiwan | 5.3% | 5.3% |
| Netherlands | 5.3% | 2.9% |
| India | 4.6% | 5.3% |
| South Korea | 4.2% | 2.8% |
| Italy | 2.8% | 2.0% |
Regional Allocation
- Euro 30.2%
- Europe - Other 26.5%
- Emerging Asia 24.2%
- Pacific 10.2%
- Emerging Europe, Middle East, Africa 2.7%
- North America 2.6%
- Emerging Latin America 1.4%
- Multi-National Emerging 0.0%
Commentary (As of July 31, 2023)
Highlights
Portfolio attribution
The Portfolio underperformed the Index during the month, due primarily to industry group allocation (a byproduct of our bottom-up stock selection process). Portfolio holdings in the transportation, consumer services, and pharmaceuticals & biotechnology industry groups detracted from relative performance. Holdings in the capital goods and technology hardware & equipment industry groups, as well as an underweight position in the consumer durables & apparel industry group, offset some of the underperformance compared to the Index. The largest detractor was robotics manufacturer, FANUC Corp.(Japan). Additional notable detractors included low-budget airline, Ryanair Holdings Plc (Ireland), and contract food service company, Compass Group Plc (United Kingdom). The top contributor to return was jet engine manufacturer, Rolls-Royce Holdings Plc (United Kingdom). Other notable contributors included banking & financial services company, UniCredit S.p.A.(Italy), and electric, gas & renewables power generation & distribution company, Enel SpA (Italy).
Economic outlook
The Federal Reserve’s rate-hiking cycle may be ending, but the lagged effect of sharp rate rises, an inverted yield curve, and negative money supply growth should weigh on the US economy in 2024. Higher borrowing costs for governments and corporations create spending headwinds for economic objectives. Monetary tightening may be felt more deeply in Europe, given its greater credit demand sensitivity to variable interest rates (including through mortgages). Recession looms in the UK, where stubborn inflation has prompted unrelenting rate hikes. The Bank of Japan modestly relaxed its yield curve control, allowing yields to rise to 1% (from a prior ceiling of 0.5%), but appears committed to ultra-loose monetary policy for the near term. In China, economic data continue to suggest the country’s emergence from the zero Covid policy remains lackluster. Inflation has been subdued, indicating a lack of demand, and China’s Manufacturing Purchasing Manager’s Index remains in contractionary territory. On the positive side, the manageable inflation data imply that Chinese authorities have ample room to stimulate growth in the economy. Within emerging markets portion of the Portfolio, we are overweight Taiwanese stocks, which we believe offer attractive valuations and top-down characteristics. The Portfolio's investments in Taiwanese information technology stocks have benefited from the continued optimism around generative artificial intelligence. The Portfolio has exposure to companies from across the artificial intelligence supply chain, including chip foundry, chip design, and hardware and components manufacturing.
Investment outlook
After one of the longest cycles on record of US stock market outperformance versus developed non-US, the US valuation premium (measured by relative price-to-earnings ratios) is unusually high, over two standard deviations above the long-term average. We believe this stretched US premium—and greater emphasis on valuation—makes a reversion to the norm and relative outperformance of undervalued international equities increasingly likely.
With interest rates remaining higher for longer, valuation has become relevant again, an investing environment we believe is conducive to Causeway’s fundamental stock selection process in the developed portion of the Portfolio. Passive indices emphasize past performers and may be especially vulnerable to compression of inflated valuation multiples. We focus instead on stocks that have underperformed peers, exhibiting valuations we believe are undemanding. Corporate earnings, in aggregate, should decline as economies slow. In developed markets, we seek companies engaged in operational restructuring that can improve earnings and cash flow through cost cutting and efficiency measures. We are especially interested in identifying companies we believe are capable of returning increasing quantities of capital to shareholders (via dividends and share buybacks), to maximize performance.
Within the emerging markets portion of the Portfolio, the Portfolio's investments in smaller cap EM companies have contributed to performance year-to-date as EM small caps have generally outperformed larger cap companies this year. We continue to identify, in our view, attractive investment opportunities in small cap companies. Historically, our investment process has uncovered EM small cap stocks with alpha potential. The Portfolio's allocation to small cap stocks was near the high end of the historical range at month-end.
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.