Andrew Daniels: Gold-rated Causeway International Value benefits from a deep and talented investment staff as well as a disciplined value approach.
The managers seek non-U.S. firms that are facing operational, but not financial, distress. Causeway's fundamental analysts dive into prospective holdings--meeting with management teams, conducting competitor analyses, and building valuation models--before assigning each with a two-year price target. The firm's quant team helps to offset company-specific risk with a risk overlay that weighs expected return against potential volatility. Management then buys the names that look most attractive on a risk-adjusted basis, and holds on for the long term.
The fund has done quite well throughout the years. Since its October 2001 inception, through November 2017, its 8.2% annualized gain beats the MSCI EAFE Index's 6.6% gain as well as 86% of its foreign large-value peers.
While the fund is a great option for international equity exposure, this is an aggressive strategy, and investors should not expect it to provide much downside protection.