Overview

The Causeway team believes that active management can add value, with lower risk. Our philosophy is value-driven with a fundamentally based, bottom-up approach to stock selection. As such, our sector and country weightings are a residual of our stock selection. We believe that companies derive their value from the contribution of yield and profitable re-investment back into the company. We do not believe in "timing" the market. Therefore, we try to remain fully invested.

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. Therefore, our goal is to construct a portfolio, which is focused on providing consistent, long term, risk-adjusted returns.

We have used our team-based investment process for more than 18 years dating back to our prior firms. It is a disciplined approach to buying and selling stocks with a focus on outperforming our benchmark while reducing risk.

Our process begins with a screen of both large and mid-sized companies in the developed international markets. We focus on companies of this size because we believe they exhibit more stability than their smaller counterparts. Our screens are applied to approximately 3,400 companies and use quantitative and value-oriented methods to find prospective stocks that meet our criteria for further analysis. Once a manageable number of stocks are identified, the "roll-up-your sleeves" work begins. At this point, our analysts and portfolio managers perform in-depth fundamental research on each company.

The research of these companies varies depending on the firm and industry. It may include meetings with senior management, discussions with clients and suppliers, interviews with the competition, and company visits. Our goal is to learn as much about a company as possible to develop an expected two-year return target. Each stock also receives a "risk score" based on the additional volatility/risk it adds to the portfolio.

The final portfolio is built from those stocks with the highest expected risk-adjusted return. It will typically have 50-80 stocks. The characteristics of the Fund are what you might expect from a value manager. We typically have a lower price/earnings ratio and higher dividend yield than the market. Given our focus on selecting established, quality companies, we expect our turnover to be lower than the typical international fund over time.