UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-10467
CAUSEWAY CAPITAL MANAGEMENT TRUST
(Exact name of registrant as specified in charter)
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11111 Santa Monica Boulevard, Suite 1550
Los Angeles, CA 90025
(Address of principal executive offices) (Zip code)
SEI Investments Global Funds Services
One Freedom Valley Drive
Oaks, PA 19456
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-866-947-7000
DATE OF FISCAL YEAR END: SEPTEMBER 30, 2004
DATE OF REPORTING PERIOD: SEPTEMBER 30, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
[CAUSEWAY LOGO OMITTED]
CAUSEWAY
INTERNATIONAL
VALUE FUND
ANNUAL REPORT
SEPTEMBER 30, 2004
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CAUSEWAY CAPITAL MANAGEMENT LLC
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[World Map Graphic Omitted]
[Background graphic omitted]
TABLE OF CONTENTS
Letter to Shareholders 2
Schedule of Investments 6
Sector Diversification 10
Statement of Assets & Liabilities 11
Statement of Operations 12
Statement of Changes in Net Assets 13
Financial Highlights 14
Notes to Financial Statements 15
Report of Independent Registered
Public Accounting Firm 20
Notice to Shareholders 21
Trustee and Officer Information 22
Disclosure of Fund Expenses 25
LETTER TO SHAREHOLDERS
The Causeway International Value Fund (the "Fund") outperformed its benchmark,
the MSCI EAFE(R) Index, in the fiscal year ended September 30, 2004. The Fund's
Institutional Class returned 27.41% and Investor Class returned 27.16% compared
to the MSCI EAFE(R) Index performance of 22.52% for this 12-month period. From
its inception on October 26, 2001 through September 30, 2004, the average annual
total returns of the Fund's Institutional and Investor Class shares were 15.67%
and 15.36%, respectively. The Fund ended the fiscal year with $1.739 billion in
net assets.
We analyze foreign equity markets continuously for undervalued stocks exhibiting
superior financial strength. The most attractive investment candidates are
typically companies that distribute surplus capital to their shareholders in the
form of generous dividends and/or sizable share buyback programs. This return of
capital tends to lend stability to the share price and mitigate risk, defined as
volatility of returns. Our research team takes particular interest in companies
that generate "free cash" (defined as cash in excess of what is required to grow
the business). More often than not, those high cash flow companies will boost
their dividend payouts and return surplus capital to shareholders. This gives us
the opportunity to reinvest that cash in our most promising candidates to seek
to enhance overall Fund performance.
The past 12 months began with a surge of investor optimism as global stocks
extended their cyclical rebound of the prior year. Asian markets, in particular
China and Japan, led the global rally. Investors had an insatiable appetite for
companies and commodities viewed as beneficiaries of China's rapid growth. By
late spring, much of the enthusiasm that had buoyed global equity
markets began to wane. Efforts by China's central bank to cool its economy
coupled with reversals of accommodative monetary policies in other regions began
to shake investor confidence. Furthermore, geopolitical unrest in the Middle
East, Russia and Africa increased the likelihood of worldwide supply/demand
imbalances, which sent oil prices to record highs. Crude oil over the last
twelve months increased from $29 per barrel (West Texas Intermediate) to nearly
$50 per barrel by September 30, a meteoric 70% rise. Poorly performing stock
markets in the latter half of the fiscal year reflected the potential drag on
growth from a sustained high oil price and the implicit tax on consumption.
During the fiscal year, the Fund benefited from several of the decisions we
madein the bear market in the first calendar quarter of 2003. At that time, with
investor pessimism plaguing share prices indiscriminately, we made the decision
to add several of the world's most profitable and financially stable
telecommunications stocks to the Fund. One of those companies, Norway's
telecommunications leader, Telenor, is an example of a company producing
abundant free cash from its strongest franchises (in this case, international
and domestic mobile operations). Telenor was the Fund's single largest
contributor in the fiscal year as investors rewarded the company's
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2
earnings growth and consistent cash generation. Another major contributor was
the French pharmaceutical giant, Sanofi-Aventis, the combination of Aventis and
its French rival drug firm, Sanofi-Synthelabo. In addition to paying a premium
in acquiring Aventis, suitor Sanofi also brings considerable added value to
Aventis shareholders through its much heralded research and development
expertise and robust drug pipeline. The Sanofi takeover of Aventis supported our
theory that an undervalued, cash-generative business (such as Aventis) should
achieve a re-pricing up to fair value -- if not through the equity market, then
via a bid from a hungry suitor.
In general, we attribute the Fund's performance gains over the Index to stock
selection in a variety of regions including France, the Netherlands,
Switzerland, the UK and Japan. The industries that contributed to the return in
excess of the Index included telecommunication services, capital goods, banks,
diversified financials, food, beverage & tobacco, insurance and pharmaceuticals.
The Fund's top five contributors to performance during the fiscal year were
Telenor, Aventis, UK financial media company Reuters, and two profitable
construction companies, Swiss plumbing systems company Geberit, and French toll
road operator Vinci.
Detractors to performance in the period included South Korea's dominant fixed
line telecommunications provider KT Corporation, considered vulnerable to the
recent slowing of the domestic economy and the decline in revenues from its
fixed line services. Additional detractors included Canada's electronics
manufacturing services company Celestica, which sagged after sobering profit
earnings from its major customers such as IBM, Cisco and Lucent. Other holdings
that disappointed us in the fiscal year included Japanese office equipment
company Canon, Japanese pharmaceutical company Yamanouchi Pharmaceutical,
UK-listed consumer products manufacturer Unilever and South Korean technology
company Creative Technology.
As value investors, we take great care in the construction of the portfolio and,
most importantly, the price we are willing to pay for any particular holding.
The recovery in global stock markets from the lows of 2003 has narrowed the
universe of acceptable candidates. Nonetheless, undervalued stocks, although no
longer plentiful, can be found in most industries and markets. We have reduced
the Fund's exposure to companies whose earnings are most sensitive to the
economic cycle, as we believe these stocks have reached fair value. Most
companies in cyclical industries have implemented severe expense reduction plans
and have fewer efficiency gains to take in the next 12 months. Higher raw
material and energy costs will remain an impediment for most of the
manufacturing sector. Our analysis in the oil and gas industry indicates a
gradual decline in oil prices as well as other commodities in the year ahead,
thus alleviating some of the price pressure from raw materials. We disagree with
the investor gloom surrounding many of the defensive, highly cash generative
businesses such as food and beverages, pharmaceuticals, and telecommunications.
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CAUSEWAY INTERNATIONAL VALUE FUND 3
With few acquisitions on the horizon, we believe much of the abundant cash
generated by these companies will lead to greater dividend payouts and
significant share repurchases. This healthy development should support share
prices and impose even greater capital allocation discipline on listed companies
worldwide.
We thank you for your continued confidence in the Causeway International Value
Fund.
/s/Harry W. Hartford /s/Sarah H. Ketterer /s/James A. Doyle
Harry W. Hartford Sarah H. Ketterer James A. Doyle
Portfolio Manager Portfolio Manager Portfolio Manager
October 25, 2004
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT AN INDICATION OF
FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH LESS THAN
THEIR ORIGINAL COST. INVESTMENT PERFORMANCE REFLECTS FEE WAIVERS IN EFFECT. IN
THE ABSENCE OF SUCH FEE WAIVERS, TOTAL RETURN WOULD BE REDUCED. TOTAL RETURNS
ASSUME REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS AT NET ASSET
VALUE WHEN PAID. INVESTOR CLASS SHARES HAVE A SHAREHOLDER SERVICES FEE OF UP TO
0.25% PER ANNUM OF AVERAGE DAILY NET ASSETS, AND WILL HAVE LOWER PERFORMANCE
THAN INSTITUTIONAL CLASS SHARES. INSTITUTIONAL CLASS SHARES HAVE NO SHAREHOLDER
SERVICES FEE. FOR MORE INFORMATION, PLEASE SEE THE PROSPECTUS.
THE ABOVE COMMENTARY EXPRESSES THE PORTFOLIO MANAGERS' VIEWS AS OF THE DATE
SHOWN AND SHOULD NOT BE RELIED UPON BY THE READER AS RESEARCH OR INVESTMENT
ADVICE REGARDING ANY STOCK. THESE VIEWS AND THE PORTFOLIO HOLDINGS ARE SUBJECT
TO CHANGE. THERE IS NO GUARANTEE THAT ANY FORECASTS MADE WILL COME TO PASS. THE
MSCI EAFE(R) INDEX IS AN UNMANAGED INDEX CONSISTING OF A MARKET-VALUE-WEIGHTED
AVERAGE OF THE PERFORMANCE OF INTERNATIONAL SECURITIES LISTED ON EXCHANGES IN
EUROPE, AUSTRALASIA AND THE FAR EAST. THE INDEX DOES NOT REFLECT THE PAYMENT OF
TRANSACTION COSTS, FEES AND EXPENSES ASSOCIATED WITH AN INVESTMENT IN THE FUND.
IT IS NOT POSSIBLE TO INVEST DIRECTLY IN AN INDEX. THERE ARE SPECIAL RISKS IN
FOREIGN INVESTING (PLEASE SEE NOTE 5 IN THE NOTES TO FINANCIAL STATEMENTS).
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4 CAUSEWAY INTERNATIONAL VALUE FUND
[LINE GRAPH OMITTED - PLOT POINTS FOLLOW:]
Comparison of Change in the Value of a $10,000 Investment in the Causeway
International Value Fund, Institutional Class shares and Investor Class shares
versus the MSCI EAFE(R) Index
Causeway Causeway
International International
Value Fund, Value Fund, MSCI EAFE[R]
Institutional Class Investor Class Index
10/31/01 10,000 10,000 10,000
9/30/02 8,990 8,966 8,264
9/30/03 12,245 12,173 10,457
9/30/04 15,602 15,479 12,812
The performance in the above graph does not reflect the deduction of or the
redemptions of fund shares. The inception date of the Causeway International
Value Fund is October 26, 2001.
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Annualized
One Year Inception
Return to Date
- ------------------------------------------------
Institutional Class 27.41% 15.67%
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Investor Class 27.16% 15.36%
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CAUSEWAY INTERNATIONAL VALUE FUND 5
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2004
MARKET
VALUE
CAUSEWAY INTERNATIONAL VALUE FUND NUMBER OF SHARES (000)
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COMMON STOCK
CANADA -- 3.0%
Celestica* 1,694,813 $ 21,565
Manulife Financial 696,327 30,582
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52,147
----------
FRANCE -- 11.5%
AXA 1,400,377 28,369
BNP Paribas 391,520 25,318
Carrefour 347,891 16,384
France Telecom+ 1,022,255 25,502
Sanofi-Aventis 628,979 46,681
Total 105,767 21,571
Vinci 309,674 35,680
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199,505
----------
GERMANY -- 2.1%
Depfa Bank 1,813,792 24,767
Heidelberger Druckmaschinen*+ 409,861 12,233
----------
37,000
----------
HONG KONG -- 1.8%
Henderson Land Development 6,586,648 31,511
----------
IRELAND -- 3.0%
Allied Irish Banks 1,804,726 30,299
CRH 932,582 22,151
----------
52,450
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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6 CAUSEWAY INTERNATIONAL VALUE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2004
MARKET
VALUE
CAUSEWAY INTERNATIONAL VALUE FUND NUMBER OF SHARES (000)
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JAPAN -- 11.4%
Acom 242,510 $ 15,035
Canon 736,300 34,673
Honda Motor 862,800 41,885
Konica Minolta Holdings 1,856,400 25,433
Promise 526,350 34,500
Takefuji 492,640 31,574
Yamanouchi Pharmaceutical 453,300 14,670
----------
197,770
----------
NETHERLANDS -- 9.1%
ABN AMRO Holding 981,955 22,335
ING Groep 1,262,353 31,899
Koninklijke Philips Electronics 1,258,877 28,868
Royal Dutch Petroleum 249,448 12,865
TPG 1,256,076 30,726
Unilever 134,520 7,749
Vedior 1,490,265 23,073
----------
157,515
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NEW ZEALAND -- 1.7%
Telecom Corporation of New Zealand 7,503,536 29,934
----------
NORWAY -- 1.9%
Telenor ASA 4,324,401 33,046
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PORTUGAL -- 1.2%
Portugal Telecom SGPS 1,903,092 20,992
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SINGAPORE -- 1.5%
Creative Technology 557,997 6,162
United Overseas Bank 2,560,629 20,828
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26,990
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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CAUSEWAY INTERNATIONAL VALUE FUND 7
SCHEDULE OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 2004
MARKET
VALUE
CAUSEWAY INTERNATIONAL VALUE FUND NUMBER OF SHARES (000)
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SOUTH KOREA -- 4.4%
KT 436,870 $ 14,139
Samsung Electronics 106,350 42,318
SK Telecom 132,330 20,177
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76,634
----------
SPAIN -- 6.6%
Altadis 779,283 26,554
Amadeus Global Travel Distribution 4,682,002 37,089
Enagas 2,169,948 25,987
Telefonica 1,639,732 24,572
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114,202
----------
SWITZERLAND -- 7.0%
Credit Suisse Group 714,682 22,878
Geberit 25,477 19,851
Novartis 507,408 23,722
SIG Holding 42,243 7,601
Syngenta 206,530 19,742
Zurich Financial Services 197,654 28,261
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122,055
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UNITED KINGDOM -- 30.0%
Arriva 1,035,846 8,351
Aviva 2,872,883 28,498
BAA 2,595,770 26,031
BAE Systems 6,464,087 26,322
BOC Group 1,433,101 22,953
British Airways* 3,265,106 12,275
British American Tobacco 1,950,036 28,300
BT Group 7,298,002 23,767
Cadbury Schweppes 2,213,776 17,046
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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8 CAUSEWAY INTERNATIONAL VALUE FUND
SCHEDULE OF INVESTMENTS (CONCLUDED)
SEPTEMBER 30, 2004
MARKET
VALUE
CAUSEWAY INTERNATIONAL VALUE FUND NUMBER OF SHARES (000)
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UNITED KINGDOM -- (CONTINUED)
Diageo 2,436,130 $ 30,455
Firstgroup 2,742,225 14,582
GlaxoSmithKline 1,509,886 32,581
Kingfisher 5,137,840 28,694
Lloyds TSB Group 3,413,680 26,688
Reed Elsevier 2,672,651 23,485
Reuters Group 4,266,675 24,080
Royal Bank of Scotland Group 1,125,019 32,531
Shell Transport & Trading 3,830,784 28,144
Unilever 3,830,910 31,216
Vodafone Group 12,891,355 30,889
Wolseley 1,448,192 24,756
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521,644
----------
TOTAL COMMON STOCK
(COST $1,495,318) -- 96.2% 1,673,395
----------
CASH EQUIVALENT
The Bank of New York Cash Reserve Fund 90,663,824 90,664
----------
TOTAL CASH EQUIVALENT
(COST $90,664) -- 5.2% 90,664
----------
TOTAL INVESTMENTS
(COST $1,585,982) -- 101.4% $1,764,059
----------
Percentages are based on Net Assets of $1,739,340,147.
* Non-income producing security
+ Resales of portions of these securities are subject to Rule 144A of the
Securities Act of 1933. Such securities may be resold in transactions exempt
from registration, normally on foreign exchanges or to qualified institutional
buyers. Country determined by registration, location of headquarters or
primary listing.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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CAUSEWAY INTERNATIONAL VALUE FUND 9
SECTOR DIVERSIFICATION
SEPTEMBER 30, 2004
AS OF SEPTEMBER 30, 2004, THE SECTOR DIVERSIFICATION WAS AS FOLLOWS:
CAUSEWAY INTERNATIONAL VALUE FUND MARKET VALUE (000) % OF NET ASSETS
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COMMON STOCK
Financials $ 465,873 26.8%
Industrials 292,560 16.8
Communications 247,097 14.2
Consumer Staples 157,704 9.1
Consumer Discretionary 131,095 7.5
Information Technology 130,151 7.5
Healthcare 117,653 6.8
Energy 62,580 3.6
Basic Materials 42,695 2.4
Utilities 25,987 1.5
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TOTAL COMMON STOCK 1,673,395 96.2
CASH EQUIVALENT 90,664 5.2
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TOTAL INVESTMENTS 1,764,059 101.4
---------- ---------
OTHER ASSETS & LIABILITIES, NET (24,719) (1.4)
---------- ---------
NET ASSETS $1,739,340 100.0%
========== =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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10 CAUSEWAY INTERNATIONAL VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES (000)
CAUSEWAY
INTERNATIONAL
VALUE FUND
-------------
9/30/04
-------------
ASSETS:
Investments at Market Value (Cost $1,585,982) $1,764,059
Foreign Currency at Market Value (Cost $29) 787
Receivable for Fund Shares Sold 17,064
Dividend and Interest Receivable 3,851
Receivable for Investment Securities Sold 868
Unrealized Gain on Foreign Currency Contracts 231
Tax Reclaims Receivables 204
----------
TOTAL ASSETS 1,787,064
----------
LIABILITIES:
Payable for Investment Securities Purchased 45,118
Payable for Fund Shares Redeemed 925
Payable due to Investment Adviser 1,094
Payable due to Administrator 136
Payable for Shareholder Servicing Fees 135
Payable for Trustees' Fees 12
Unrealized Loss on Foreign Currency Contracts 5
Accrued Expenses 299
----------
TOTAL LIABILITIES 47,724
----------
NET ASSETS $1,739,340
==========
NET ASSETS:
Paid-In-Capital (unlimited authorization -- no par value) $1,496,903
Undistributed net investment income 19,101
Accumulated net realized gain on investments 45,233
Net unrealized appreciation on investments 178,077
Net unrealized appreciation on forward foreign currency contracts,
foreign currencies and translation of other assets and liabilities
denominated in foreign currencies 26
----------
NET ASSETS $1,739,340
==========
NET ASSET VALUE (BASED ON NET ASSETS OF $997,371,084 # 67,370,074 SHARES),
OFFERING AND REDEMPTION PRICE PER SHARE -- INSTITUTIONAL CLASS $ 14.80
==========
NET ASSET VALUE (BASED ON NET ASSETS OF $741,969,063 # 50,360,310 SHARES),
OFFERING AND REDEMPTION PRICE PER SHARE -- INVESTOR CLASS $ 14.73
==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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CAUSEWAY INTERNATIONAL VALUE FUND 11
STATEMENT OF OPERATIONS (000)
CAUSEWAY
INTERNATIONAL
VALUE FUND
-------------
10/01/03 to
9/30/04
-------------
INVESTMENT INCOME:
Dividend Income (Net of Foreign Taxes Withheld of $3,725) $ 27,887
Interest Income 61
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Total Investment Income 27,948
--------
EXPENSES:
Investment Advisory Fees 8,680
Shareholder Servicing Fees - Investor Class 1,293
Administration Fees 1,214
Trustees Fees 51
Transfer Agent Fees 142
Custodian Fees 580
Registration Fees 152
Professional Fees 116
Printing Fees 81
Other Fees 12
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Total Expenses 12,321
--------
Less:
Directed Brokerage (1) (153)
--------
12,168
Net Expenses
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NET INVESTMENT INCOME 15,780
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NET REALIZED AND UNREALIZED GAIN (L0SS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net Realized Gain from Security Transactions 57,966
Net Realized Loss from Foreign Currency Transactions (386)
Net Change in Unrealized Appreciation on Investments 122,051
Net Change in Unrealized Appreciation on Forward Foreign
Currency Contracts, Foreign Currency, and Translation of
Other Assets and Liabilities Denominated in Foreign Currency 46
--------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS 179,677
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $195,457
========
(1) See Note 3 in the Notes to Financial Statements.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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12 CAUSEWAY INTERNATIONAL VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS (000)
CAUSEWAY INTERNATIONAL
VALUE FUND
-------------------------------
10/01/03 to 10/01/02 to
9/30/04 9/30/03
----------- -----------
OPERATIONS:
Net Investment Income $ 15,780 $ 5,097
Net Realized Gain from Security Transactions 57,966 1,296
Net Realized Loss from Foreign Currency Transactions (386) (214)
Net Change in Unrealized Appreciation on Investments 122,051 98,033
Net Change in Unrealized Appreciation (Depreciation) on Forward Foreign
Currency Contracts, Foreign Currency, and Translation of Other Assets
and Liabilities Denominated in Foreign Currency 46 (27)
---------- ---------
Net Increase in Net Assets Resulting from Operations 195,457 104,185
---------- ---------
DIVIDENDS AND DISTRIBUTION TO SHAREHOLDERS:
Net Investment Income Dividend:
Institutional Class (4,064) (650)
Investor Class (4,848) (1,122)
---------- ---------
Total Net Investment Income Dividends (8,912) (1,772)
---------- ---------
Net Capital Gain Distribution:
Institutional Class (1,988) (344)
Investor Class (2,658) (710)
---------- ---------
Total Net Capital Gain Distributions (4,646) (1,054)
---------- ---------
Total Dividends and Distribution to Shareholders (13,558) (2,826)
---------- ---------
CAPITAL SHARE TRANSACTIONS(1):
Institutional Class:
Proceeds from Shares Sold 722,487 177,853
Reinvestment of Dividends 5,932 992
Payments for Shares Redeemed (40,881) (60,119)
Redemption Fee(2) 14 5
---------- ---------
Increase in Net Assets Derived from Institutional Class Transactions 687,552 118,731
---------- ---------
Investor Class:
Proceeds from Shares Sold 452,549 272,012
Reinvestment of Dividends 7,301 1,796
Payments for Shares Redeemed (135,763) (148,635)
Redemption Fee(2) 171 17
---------- ---------
Increase in Net Assets Derived from Investor Class Transactions 324,258 125,190
---------- ---------
Net Increase in Net Assets Derived from Capital Share Transactions 1,011,810 243,921
---------- ---------
Total Increase in Net Assets 1,193,709 345,280
NET ASSETS:
Beginning of Year 545,631 200,351
---------- ---------
End of Year $1,739,340 $ 545,631
========== =========
Undistributed Net Investment Income $ 10,474 $ 4,784
========== =========
(1) See Note 7 in the Notes to Financial Statements.
(2) See Note 2 in the Notes to Financial Statements.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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CAUSEWAY INTERNATIONAL VALUE FUND 13
<page>
FINANCIAL HIGHLIGHTS
FOR THE YEARS ENDED SEPTEMBER 30, 2004 AND 2003 AND THE PERIOD FROM INCEPTION(1)
THROUGH SEPTEMBER 30, 2002
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
- ------------------------------------------------------------------------------------------------------------------------------------
Net Realized
and
Net Asset Unrealized Dividends Distributions Total
Value, Net Gain Total from Net from Dividends Net Asset
Beginning Investment (Loss) on from Investment Capital and Value, End Total
of Period Income Securities Operations Income Gains Distributions of Period Return+
- ------------------------------------------------------------------------------------------------------------------------------------
CAUSEWAY INTERNATIONAL VALUE FUND
INSTITUTIONAL CLASS
2004++ $11.86 $0.23 $2.98 $3.21 $(0.18) $(0.09) $(0.27) $14.80 27.41%
2003++ 8.82 0.18 2.98 3.16 (0.08) (0.04) (0.12) 11.86 36.21
2002(1) 10.00 0.09 (1.26) (1.17) (0.01) -- (0.01) 8.82 (11.72)
INVESTOR CLASS
2004++ $11.81 $0.18 $2.99 $3.17 $(0.16) $(0.09) $(0.25) $14.73 27.16%
2003++ 8.80 0.16 2.96 3.12 (0.07) (0.04) (0.11) 11.81 35.76
2002(1) 10.00 0.07 (1.26) (1.19) (0.01) -- (0.01) 8.80 (11.95)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of
Expenses
to Average Ratio of Ratio of Net
Net Assets Net Assets Expenses Investment
End of (Excluding to Average Income Portfolio
Period Directed Net to Average Turnover
(000) Brokerage)+++ Assets++++ Net Assets Rate+
- ------------------------------------------------------------------------------------------------------------------------------------
CAUSEWAY INTERNATIONAL VALUE FUND
INSTITUTIONAL CLASS
2004++ $997,371 1.02% 1.00% 1.61% 21.11%
2003++ 224,464 1.05 1.04 1.74 32.32
2002(1) 70,883 1.05 1.03 1.70 46.76
INVESTOR CLASS
2004++ $741,969 1.25% 1.23% 1.31% 21.11%
2003++ 321,167 1.28 1.27 1.55 32.32
2002(1) 129,468 1.29 1.27 1.44 46.76
<FN>
(1) Commenced operations on October 26, 2001. All ratios for the period have been annualized.
+ Returns and portfolio turnover are for the period indicated and have not been annualized.
++ Per share amounts calculated using average shares method.
+++ See Note 3 in the Notes to Financial Statements.
++++ Expense ratio reduced by directed brokerage (see Note 3 in the Notes to Financial Statements).
Amounts designated as "--" are $0.
</FN>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
14 CAUSEWAY INTERNATIONAL VALUE FUND
<page>
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Causeway International Value Fund (the "Fund") is a series of Causeway Capital
Management Trust (the "Trust"). The Trust is an open-end management investment
company registered under the Investment Company Act of 1940, as amended, (the
"1940 Act") and is a Delaware statutory trust that was established on August 10,
2001. The Fund began operations on October 26, 2001. The Fund is authorized to
offer two classes of shares, the Institutional Class and the Investor Class. The
Declaration of Trust authorizes the issuance of an unlimited number of shares of
beneficial interest of the Fund. The Fund's prospectus provides a description of
the Fund's investment objectives, policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies consistently
followed by the Fund.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - The preparation of
financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions that affect the reported amount of net assets and liabilities and
disclosure of contingent assets at the date of the financial statements and the
reported results of operations during the reporting period. Actual results could
differ from those estimates.
SECURITY VALUATION - Securities listed on a securities exchange, market or
automated quotation system for which quotations are readily available are valued
at the last reported sale price on the primary exchange or market (foreign or
domestic) on which they are traded, or, if there is no such reported sale, at
the last reported bid price. The prices for foreign securities are reported in
local currency and converted to U.S. dollars using currency exchange rates.
Prices for most securities held in the Fund are provided daily by recognized
independent pricing agents. If a security price cannot be obtained from an
independent pricing agent, the Fund seeks to obtain a bid price from at least
one independent broker.
Securities for which market prices are not "readily available" are valued in
accordance with fair value pricing procedures established by the Fund's Board of
Trustees (the "Board"). The Fund's fair value pricing procedures are implemented
through a Fair Value Committee (the "Committee") designated by the Fund's Board.
Some of the more common reasons that may necessitate that a security be valued
using fair value pricing procedures include: the security's trading has been
halted or suspended; the security has been de-listed from a national exchange;
the security's primary trading market is temporarily closed at a time when under
normal conditions it would be open; or the security's primary pricing source is
not able or willing to provide a price. When the Committee values a security in
accordance with the fair value pricing procedures, the Committee will determine
the value after taking into consideration relevant information reasonably
available to the Committee.
- --------------------------------------------------------------------------------
CAUSEWAY INTERNATIONAL VALUE FUND 15
<page>
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
The Fund uses a third party vendor to fair value certain non-U.S. securities if
there is a movement in the U.S. market that exceeds certain thresholds
established by the Committee. The vendor provides a fair value for foreign
securities based on certain factors and methodologies involving, generally,
tracking valuation correlations between the U.S. market and each non-U.S.
security.
SECURITY TRANSACTIONS AND RELATED INCOME - Security transactions are accounted
for on the trade date the security is purchased or sold. Dividend income is
recognized on the ex-dividend date, and interest income is recognized using the
accrual basis of accounting. Costs used in determining realized gains and losses
on the sales of investment securities are those of the specific securities sold.
FOREIGN CURRENCY TRANSLATION - The books and records of the Fund are maintained
in U.S. dollars on the following basis:
(1) market value of investment securities, assets and liabilities at the current
rate of exchange; and
(2) purchases and sales of investment securities, income and expenses at the
relevant rates of exchange prevailing on the respective date of such
transactions.
The Fund does not isolate that portion of gains and losses on investments in
equity securities that is due to changes in the foreign exchange rates from that
which is due to changes in market prices of equity securities.
FORWARD FOREIGN CURRENCY CONTRACTS - The Fund may enter into forward foreign
currency contracts to settle transactions or as hedges against either specific
transactions, fund positions or anticipated fund positions. All commitments are
"marked-to-market" daily at the applicable foreign exchange rate and any
resulting unrealized gains or losses are recorded currently. The Fund realizes
gains and losses at the time forward contracts are extinguished. Unrealized
gains or losses on outstanding positions in forward foreign currency contracts
held at the close of the year are recognized as ordinary income or loss for
Federal income tax purposes. As of September 30, 2004, the following forward
foreign currency contracts were outstanding:
Contracts Unrealized
Maturity to Deliver/ In Appreciation
Date Receive Exchange For (Depreciation)
- ---------------------------------------------------------
Foreign Currency Purchases:
10/01/04 CD 2,026,526 1,593,933 $ 12,636
10/01/04 CF 3,654,869 2,902,532 33,341
10/01/04 EU 10,986,063 13,540,323 121,896
10/01/04 UK 8,556,022 15,499,234 2,491
10/05/04 UK 1,487,837 2,696,050 (1,512)
10/04/04 HK 7,539,309 966,702 384
10/01/04 JP 303,955,147 2,728,110 35,118
10/01/04 NO 6,776,901 1,001,360 9,123
10/01/04 NZ 1,385,804 926,895 11,710
10/01/04 SG 1,081,174 637,673 4,240
- ---------------------------------------------------------
$229,427
- ---------------------------------------------------------
Foreign Currency Sales:
10/04/04 CF 357,437 283,703 (3,459)
10/04/04 UK 467,062 580,647 (172)
- ---------------------------------------------------------
$ (3,631)
- ---------------------------------------------------------
CURRENCY LEGEND
CD Canadian Dollar JP Japanese Yen
CF Swiss Franc NO Norwegian Krone
EU Euro NZ New Zealand Dollar
UK British Pound Sterling SG Singapore Dollar
HK Hong Kong Dollar
- --------------------------------------------------------------------------------
16 CAUSEWAY INTERNATIONAL VALUE FUND
<page>
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
EXPENSES - Class specific expenses are borne by that class of shares. Income,
realized and unrealized gains/losses and non class specific expenses are
allocated to the respective classes on the basis of relative daily net assets.
DIVIDENDS AND DISTRIBUTIONS - Dividends, if any, from net investment income, if
any, are declared and paid on an annual basis. Any net realized capital gains on
sales of securities are distributed to shareholders at least annually.
REDEMPTION FEE - The Fund imposes a redemption fee of 2% on the original value
of any capital shares redeemed by shareholders less than 90 days after purchase.
The redemption fee does not apply to shares purchased through reinvested
distributions, shares redeemed through designated systematic withdrawal plans,
or omnibus account arrangements through financial intermediaries where the
purchase and sale orders of a number of persons are aggregated before being
communicated to the Fund.
3. INVESTMENT ADVISORY, ADMINISTRATION, SHAREHOLDER SERVICE AND
DISTRIBUTION AGREEMENTS
The Trust, on behalf of the Fund, has entered into an Investment Advisory
Agreement (the "Advisory Agreement") with Causeway Capital Management LLC (the
"Investment Adviser"). Under the Advisory Agreement, the Investment Adviser is
entitled to a monthly fee equal to an annual rate of 0.80% of the Fund's average
daily net assets. The Investment Adviser contractually agreed to waive its fee
for the fiscal year ended September 30, 2004 and, to the extent necessary,
reimburse the Fund to keep total annual operating expenses from exceeding
1.05% and 1.30% of the Institutional Class and Investor Class average daily net
assets, respectively. No waivers or reimbursements were required under the
contract for the fiscal year ended September 30, 2004.
Directed brokerage credits are used to pay for Fund expenses, which has the
effect of increasing the Fund's total return. Because the Investment Adviser has
a binding expense limit commitment to the Fund, directed brokerage credits may
not be used to increase the management fee received by the Investment Adviser
when it is waiving management fees or paying Fund expenses under the expense
limit agreement. Accordingly, the Investment Adviser's management fee waiver
and/or expense payment, if any, is calculated using expenses gross of directed
brokerage credits. The credits are then applied after the Investment Adviser's
full management fee waiver and/or expense payment.
The Trust and SEI Investments Global Funds Services (the "Administrator") have
entered into an Administration Agreement. Under the terms of the Administration
Agreement, the Administrator is entitled to an annual fee which is calculated
daily and paid monthly based on the aggregate average daily net assets of the
Fund as follows: 0.15% up to $250 million; 0.125% from $250 million to $500
million; 0.10% from $500 million to $1 billion; and 0.07% in excess of $1
billion. The Fund is subject to a minimum annual fee of $165,000 for all classes
in existence on the agreement date and $80,000 for any portfolio created
thereafter. In addition, the minimum annual fee will be increased $20,000 for
each new class added after the agreement date.
- -------------------------------------------------------------------------------
CAUSEWAY INTERNATIONAL VALUE FUND 17
<Page>
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
The Fund has adopted a Shareholder Service Plan and Agreement (the "Plan") for
Investor Class shares that allows the Fund to pay broker-dealers and other
financial intermediaries a fee of up to 0.25% per annum of average daily net
assets for services provided to Investor Class shareholders. For the fiscal year
ended September 30, 2004, the Investor Class paid 0.24% of average daily net
assets under the Plan.
The Trust and SEI Investments Distribution Co. (the "Distributor") have entered
into a Distribution Agreement. The Distributor receives no fees for its
distribution services under this agreement.
Certain Trustees and officers of the Fund are also officers of the Administrator
and/or Distributor or are members and officers of the Investment Adviser. These
persons receive no fees for serving as Trustees or officers of the Fund.
4. INVESTMENT TRANSACTIONS
The cost of security purchases and the proceeds from the sale of securities,
other than short-term investments, during the fiscal year ended September 30,
2004 for the Fund were as follows:
Investment
Securities
----------
Purchases Sales
(000) (000)
----- -----
-------------------------------------
$1,219,712 $219,839
-------------------------------------
5. RISKS OF FOREIGN INVESTING
The Fund invests in securities of foreign issuers in various countries. These
investments may involve certain considerations and risks not typically
associated with investments in the United States as a result of, among other
factors, the possibility of future political and economic developments
and the level of governmental supervision and regulation of securities markets
in different foreign countries.
6. FEDERAL TAX INFORMATION
The Fund is classified as a separate taxable entity for Federal income tax
purposes. The Fund intends to continue to qualify as a separate "regulated
investment company" under Subchapter M of the Internal Revenue Code and make the
requisite distributions to shareholders that will be sufficient to relieve it
from Federal income tax and Federal excise tax. Therefore, no Federal tax
provision is required. To the extent that distributions from net investment
income and net realized capital gains exceed amounts reported in the financial
statements, such amounts are reported separately.
The Fund may be subject to taxes imposed by countries in which it invests in
issuers existing or operating in such countries. Such taxes are generally based
on income earned. The Fund accrues such taxes when the related income is earned.
The amounts of distributions from net investment income and net realized capital
gains are determined in accordance with Federal income tax regulations, which
may differ from those amounts determined under U.S. generally accepted
accounting principles. These book/tax differences are either temporary or
permanent in nature. As of September 30, 2004, the primary book/tax differences
relate to the current taxation of unrealized gains on non-U.S. securities
determined to be passive foreign investment companies ("PFICs") and the effect
of wash sales. In addition, the Fund may use earnings and profits distributed
- --------------------------------------------------------------------------------
18 CAUSEWAY INTERNATIONAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS
(CONCLUDED)
to shareholders on redemption of shares as part of the dividends paid deduction
for income tax purposes. The character of distributions made during the year
from net investment income or net realized gains, and the timing of
distributions made during the year may differ from the year that the income or
realized gains (losses) were recorded by the Fund. To the extent these
differences are permanent, adjustments are made to the appropriate equity
accounts in the period that the differences arise.
Accordingly, the following permanent differences, which are primarily due to
realized losses on foreign currency and earnings and profits on shareholder
redemptions, have been reclassified to/from the following accounts (000):
Undistributed Accumulated
Net Investment Net Realized Paid In
Income Gain Capital
- ------------------------------------------------------
$7,449 $(8,241) $792
- ------------------------------------------------------
The tax character of dividends and distributions declared during the fiscal
years ended September 30, 2004 and September 30, 2003 were as follows (000):
Ordinary Long-Term
Income Capital Gain Total
- ------------------------------------------------------
2004 $10,677 $2,881 $13,558
2003 2,826 -- 2,826
- ------------------------------------------------------
As of September 30, 2004, the components of distributable income on a tax basis
were as follows (000):
Undistributed Undistributed Post October Other Total
Ordinary Long-Term Unrealized Currency Temporary Distributable
Income Capital Gain Appreciation Losses Differences Income
- --------------------------------------------------------------------------------
$49,371 $29,139 $164,278 $(129) $(222) $242,437
- --------------------------------------------------------------------------------
Post-October currency losses represent losses realized on currency transactions
from November 1, 2003 through September 30, 2004 that, in accordance with
Federal income tax regulations, the Fund may elect to defer and treat as having
arisen in the following fiscal year.
At September 30, 2004, the total cost of securities for Federal income tax
purposes and the aggregate gross unrealized appreciation and depreciation on
investment securities for the Fund were as follows (000):
Net
Federal Appreciated Depreciated Unrealized
Tax Cost Securities Securities Appreciation
- ------------------------------------------------------
$1,599,807 $193,501 $(29,249) $164,252
- ------------------------------------------------------
7. CAPITAL SHARES ISSUED AND REDEEMED (000)
2004 2003
---- ----
INSTITUTIONAL CLASS:
Shares Sold 50,853 17,133
Shares Issued in Reinvestment
of Dividends 462 108
Shares Redeemed (2,878) (6,342)
------ -------
Increase in Shares Outstanding
Derived from Institutional
Class Transactions 48,437 10,899
------ -------
INVESTOR CLASS:
Shares Sold 32,234 28,110
Shares Issued in Reinvestment
of Dividends 570 195
Shares Redeemed (9,635) (15,828)
------ -------
Increase in Shares Outstanding
Derived from Investor
Class Transactions 23,169 12,477
------ -------
Increase in Shares
Outstanding from Capital
Share Transactions 71,606 23,376
====== =======
- --------------------------------------------------------------------------------
CAUSEWAY INTERNATIONAL VALUE FUND 19
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of
Causeway International Value Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Causeway International Value
Fund (the "Fund") at September 30, 2004, and the results of its operations, the
changes in its net assets and its financial highlights for each of the periods
presented, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
September 30, 2004 by correspondence with the custodian and brokers, provide a
reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Los Angeles, California
November 10, 2004
- --------------------------------------------------------------------------------
20 CAUSEWAY INTERNATIONAL VALUE FUND
<page>
NOTICE TO SHAREHOLDERS (Unaudited)
The information set forth below is for the Fund's fiscal year as required by
federal laws. Shareholders, however, must report distributions on a calendar
year basis for income tax purposes, which may include distributions for portions
of two fiscal years of the Fund. Accordingly, the information needed by
shareholders for income tax purposes will be sent to them in early 2005. Please
consult your tax adviser for proper treatment of this information.
For the fiscal period ended September 30, 2004, the Fund is designating the
following items with regard to distributions paid during the year:
(A) (B) (C) (D) (E) (F) (G)
Qualifying
Long Term Ordinary Dividends (1) Qualifying
Capital Gains Income Tax Exempt Total for Corporate Dividend Income Foreign
Distributions Distributions Distributions Distributions Dividends Received (15% Tax Rate Tax
(Tax Basis) (Tax Basis) (Tax Basis) (Tax Basis) Deduction for QDI) Credit
------------- ------------ ------------- ------------- ------------------ --------------- ---------
16.67% 83.33% 0.00% 100.00% 0.00% 62.75% 25.87%
Foreign taxes accrued during the fiscal year ended September 30, 2004 amounted
to $3,725,243 and are expected to be passed through to shareholders as foreign
tax credits on Form 1099 - Dividend for the year ending December 31, 2004. In
addition, for the year ended September 30, 2004, gross income derived from
sources within foreign countries amounted to $15,721,322 for the Fund.
(1) Qualifying Dividends represent dividends which qualify for the corporate
dividends received deduction.
Items (A), (B), (C), and (D)are based on a percentage of the Fund's total
distribution.
Item (E) is based on a percentage of ordinary income distributions of the Fund.
Item (F) represents the amount of "Qualifying Dividend Income" as defined in the
Jobs and Growth Tax Relief Reconciliation Act of 2003 and is reflected as a
percentage of "Ordinary Income Distributions." It is the Fund's intention to
designate the maximum amount permitted by the law.
Item (G) is based on a percentage of ordinary income distributions of the Fund.
- --------------------------------------------------------------------------------
CAUSEWAY INTERNATIONAL VALUE FUND 21
<page>
TRUSTEE AND OFFICER INFORMATION (Unaudited)
Information pertaining to the Trustees and officers of the Trust is set forth below. Trustees who are not deemed to be "interested
persons" of the Trust as defined in the 1940 Act are referred to as "Independent Board Members." Trustees who are deemed to be
"interested persons" of the Trust are referred to as "Interested Board Members." The Trust's Statement of Additional Information
("SAI") includes additional information about the Trustees and Officers. The SAI may be obtained without charge by calling
1-866-947-7000.
- -----------------------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF
OFFICE PORTFOLIOS
AND PRINCIPAL IN TRUST OTHER
NAME POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX DIRECTORSHIPS
ADDRESS, HELD WITH THE TIME DURING PAST OVERSEEN BY HELD BY
AGE1 COMPANY SERVED2 FIVE YEARS BOARD MEMBER3 BOARD MEMBER4
- -----------------------------------------------------------------------------------------------------------------------------------
INTERESTED
BOARD MEMBERS5
- --------------
Gracie V. Trustee & Since 8/01 Chief Operating Officer and 1 None
Fermelia Assistant Member of the Investment Adviser
Age: 42 Secretary (since 2001); Business Manager,
International Department, Hotchkis
and Wiley division of Merrill
Lynch Investment Managers, L.P.
("MLIM"), Los Angeles (1998 -
2001).
INDEPENDENT
BOARD MEMBERS
- -------------
Peter Graham Allen Trustee Since 2/04 President, Haven Partners (private 1 None
Age: 46 equity and financial advisory firm)
(1998 - present); Chairman
and Chief Executive
Officer, ForMyCause.com
(internet company) (2000);
Managing Director, Credit
Suisse First Boston
(investment banking firm)
(1999).
John A. G. Gavin Trustee Since 9/01 Partner and Managing Director, 1 Director/Trustee
Age: 73 Hicks, Muse, Tate & Furst (Latin TCW Galileo
America) (private equity Funds, Inc.,
investment firm) (1994 - 2001); TCW Convertible
Chairman, Gamma Holdings Securities Fund,
(investment holding company) Inc., Hotchkis
(since 1968); U.S. Ambassador and Wiley Funds
to Mexico (1981 - 1986). and Claxson, S.A.
Eric H. Sussman Trustee Since 9/01 Tenured Lecturer, Anderson 1 None
Age: 38 Graduate School of Management,
University of California, Los
Angeles (since 1995); President,
Amber Capital, Inc. (real estate
investment and financial planning
firm) (since 1993).
- --------------------------------------------------------------------------------
22 CAUSEWAY INTERNATIONAL VALUE FUND
<page>
TRUSTEE AND OFFICER INFORMATION (Unaudited)
(CONTINUED)
- -----------------------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF
OFFICE PORTFOLIOS
AND PRINCIPAL IN TRUST OTHER
NAME POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX DIRECTORSHIPS
ADDRESS, HELD WITH THE TIME DURING PAST OVERSEEN BY HELD BY
AGE1 COMPANY SERVED2 FIVE YEARS BOARD MEMBER3 BOARD MEMBER4
- -----------------------------------------------------------------------------------------------------------------------------------
OFFICERS
- --------
Turner Swan President and Since 8/01 General Counsel and Member of the N/A N/A
11111 Santa Secretary Investment Adviser (since 2001);
Monica Blvd., Attorney, MLIM (1997 - 2001).
Suite 1550,
Los Angeles, CA
90025
Age: 42
Peter Golden Treasurer Since 9/01 Funds Accounting Director of N/A N/A
One Freedom the Administrator (since 2001);
Valley Drive Vice President, Funds
Oaks, PA 19456 Administration, J.P. Morgan
Age: 40 Chase & Co., (2000 - 2001);
Vice President, Fund & Pension
Accounting, Chase Manhattan
Bank (1997 - 2000).
Daniel B. Heyman Chief Since 5/04 Associate, PricewaterhouseCoopers N/A N/A
11111 Santa Compliance LLP (2003 - 2004); Staff Accountant,
Monica Blvd., Officer Edward J. Heyman and Company,
Suite 1550, CPA (2000 - 2003).
Los Angeles, CA
90025
Age: 26
Timothy D. Barto Vice President Since 9/01 Vice President and Assistant N/A N/A
One Freedom and Assistant Secretary of the Administrator and
Valley Drive Secretary Distributor (since December 1999);
Oaks, PA 19456 Associate at Dechert, Price &
Age: 36 Rhoads (1997 - 1999).
- --------------------------------------------------------------------------------
CAUSEWAY INTERNATIONAL VALUE FUND 23
<page>
TRUSTEE AND OFFICER INFORMATION (Unaudited)
(CONCLUDED)
- ------------------------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF
OFFICE PORTFOLIOS
AND PRINCIPAL IN TRUST OTHER
NAME POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX DIRECTORSHIPS
ADDRESS, HELD WITH THE TIME DURING PAST OVERSEEN BY HELD BY
AGE1 COMPANY SERVED2 FIVE YEARS BOARD MEMBER3 BOARD MEMBER4
- ------------------------------------------------------------------------------------------------------------------------------------
William E. Vice President Since 9/01 Vice President and Assistant N/A N/A
Zitelli, Jr. and Assistant Secretary of the Administrator and
One Freedom Secretary Distributor (since September 2000);
Valley Drive Vice President, Merrill Lynch & Co.
Oaks, PA 19456 Asset Management Group (1998 - 2000).
Age: 36
Lydia A. Gavalis Vice President Since 9/01 Vice President and Assistant N/A N/A
One Freedom and Assistant Secretary of the Administrator and
Valley Drive Secretary Distributor (since 1998).
Oaks, PA 19456
Age: 40
Christine McCullough Vice President Since 9/01 Vice President and Assistant N/A N/A
One Freedom and Assistant Secretary of the Administrator and
Valley Drive Secretary Distributor (since November 1999);
Oaks, PA 19456 Associate at White and Williams
Age: 44 LLP (1991 - 1999).
<FN>
- ----------------------
1 Each Trustee may be contacted by writing to the Trustee c/o Causeway Capital Management Trust, One Freedom Valley Drive,
Oaks, PA 19456.
2 Each Trustee shall hold office during the lifetime of this Trust until the election and qualification of his or her successor, or
until he or she sooner dies, resigns or is removed in accordance with the Trust's Declaration of Trust. The president, treasurer
and secretary shall hold office for a one year term and until their respective successors are chosen and qualified, or in each
case until he or she sooner dies, resigns, is removed, or becomes disqualified in accordance with the Trust's by-laws.
3 The "Trust Complex" consists of all registered investment companies for which Causeway Capital Management LLC serves as
investment adviser. As of September 30, 2004, the Trust Complex consisted of one investment company.
4 Directorships of companies required to report to the Securities and Exchange Commission under the Securities Exchange Act of 1934
(i.e., "public companies") or other investment companies registered under the 1940 Act.
5 Ms. Fermelia is considered to be an "interested" person of the Trust as defined in Section 2(a)(19) of the 1940 Act.
</FN>
- -------------------------------------------------------------------------------
24 CAUSEWAY INTERNATIONAL VALUE FUND
<page>
DISCLOSURE OF FUND EXPENSES (Unaudited)
All mutual funds have operating expenses. As a shareholder of a fund, your
investment is affected by these ongoing costs, which include (among others)
costs for portfolio management, administrative services, and shareholder reports
like this one. It is important for you to understand the impact of these costs
on your investment returns.
Operating expenses such as these are deducted from the fund's gross income and
directly reduce your final investment return. These expenses are expressed as a
percentage of the fund's average net assets; this percentage is known as the
fund's expense ratio.
The following examples use the expense ratio and are intended to help you
understand the ongoing costs (in dollars) of investing in your fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The table on the next page illustrates your fund's costs in two ways:
ACTUAL FUND RETURN. This section helps you to estimate the actual expenses after
fee waivers that your fund incurred over the period. The "Expenses Paid During
Period" column shows the actual dollar expense cost incurred by a $1,000
investment in the fund, and the "Ending Account Value" number is derived from
deducting that expense cost from the fund's gross investment return.
You can use this information, together with the actual amount you invested in
the fund, to estimate the expenses you paid over that period. Simply divide your
actual account value by $1,000 to arrive at a ratio (for example, an $8,600
account value divided by $1000 = 8.6), then multiply that ratio by the number
shown for your fund under "Expenses Paid During Period."
HYPOTHETICAL 5% RETURN. This section helps you compare your fund's costs with
those of other mutual funds. It assumes that the fund had an annual 5% return
before expenses during the year, but that the expense ratio (Column 3) for the
period is unchanged. This example is useful in making comparisons because the
Securities and Exchange Commission requires all mutual funds to make this 5%
calculation. You can assess your fund's comparative cost by comparing the
hypothetical result for your fund in the "Expense Paid During Period" column
with those that appear in the same charts in the shareholder reports for other
funds.
NOTE: Because the return is set at 5% for comparison purposes -- NOT your fund's
actual return -- the account values shown may not apply to your specific
investment.
- --------------------------------------------------------------------------------
CAUSEWAY INTERNATIONAL VALUE FUND 25
<page>
DISCLOSURE OF FUND EXPENSES
(CONCLUDED)
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
3/31/04 9/30/04 RATIOS PERIOD*
- --------------------------------------------------------------------------------
CAUSEWAY INTERNATIONAL VALUE FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,023.50 1.00% $5.06
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,020.00 1.00% $5.05
- --------------------------------------------------------------------------------
CAUSEWAY INTERNATIONAL VALUE FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Investor Class $1,000.00 $1,022.20 1.23% $6.22
HYPOTHETICAL 5% RETURN
Investor Class $1,000.00 $1,018.85 1.23% $6.21
- --------------------------------------------------------------------------------
*EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO MULTIPLIED BY THE
AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY 183/366 (TO REFLECT THE
ONE-HALF YEAR PERIOD).
- --------------------------------------------------------------------------------
26 CAUSEWAY INTERNATIONAL VALUE FUND
<page>
NOTES
<page>
- --------------------------------------------------------------------------------
INVESTMENT ADVISER:
Causeway Capital Management LLC
11111 Santa Monica Boulevard
Suite 1550
Los Angeles, CA90025
DISTRIBUTOR:
SEI Investments Distribution Co.
One Freedom ValleyDrive
Oaks, PA 19456
TO OBTAIN MORE INFORMATION:
Call 1-866-947-7000 or visit us online
at www.causewayfunds.com
This material must be preceded or accompanied by a current prospectus.
Beginning with the fiscal quarter ended December 31, 2004, the Fund will file
its complete schedule of portfolio holdings with the Securities and Exchange
Commission for the first and third quarters of each fiscal year on Form N-Q
within sixty days after the end of the period. The Fund's Forms N-Q will be
available on the Commission's website at http://www.sec.gov, and may be reviewed
and copied at the Commission's Public Reference Room in Washington, DC.
Information on the operation of the Public Reference Room may be obtained by
calling 1-800-SEC-0330.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities, as well as information
relating to how a Fund voted proxies relating to portfolio securities during the
most recent 12-month period ended June 30, 2004, is available (i) without
charge, upon request, by calling 1-866-947-7000; and (ii) on the Commission's
website at http://www.sec.gov.
- --------------------------------------------------------------------------------
CCM-AR-001-0300
- --------------------------------------------------------------------------------
CAUSEWAY INTERNATIONAL VALUE FUND
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer and principal
accounting officer.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The registrant's board of trustees has determined that the registrant has
at least one audit committee financial expert serving on the audit committee.
(a)(2) The audit committee financial expert is Eric Sussman. Mr. Eric Sussman is
independent as defined in Form N-CSR Item 3(a)(2).
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Aggregate fees billed to the registrant for professional services rendered by
the registrant's principal accountant for fiscal years ended September 30, 2003
and 2004 were as follows:
- ----------------------------------------------------
2004 2003
- ----------------------------------------------------
(a) Audit $33,500 $30,150
Fees(1)
- ----------------------------------------------------
(b) Audit- None None
Related
Fees
- ----------------------------------------------------
(c) Tax $4,300 $4,000
Fees(2)
- ----------------------------------------------------
(d) All None None
Other
Fees
- ----------------------------------------------------
Notes:
(1) Audit fees include amounts related to the audit of the registrant's
annual financial statements and services normally provided by the
accountant in connection with statutory and regulatory filings.
(2) Tax fees include amounts related to tax return reviews.
(e)(1) The registrant's audit committee has adopted a charter that requires it
to pre-approve the engagement of auditors to (i) audit the registrant's
financial statements, (ii) provide other audit or non-audit services to the
registrant, or (iii) provide non-audit services to the registrant's investment
adviser if the engagement relates directly to the operations and financial
reporting of the registrant.
(e)(2) No services included in (b) - (d) above were approved pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) For the fiscal years ended September 30, 2003 and September 30, 2004, the
aggregate non-audit fees billed by the registrant's accountant for services
rendered to the registrant and the registrant's investment adviser were $20,700
and $37,845.
(h) The audit committee considered whether the provision of non-audit services
rendered to the registrant's investment adviser by the registrant's principal
accountant that were not pre-approved were compatible with maintaining the
principal accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not Applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
See Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end management investment companies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable to open-end management investment companies.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND
AFFILIATED PURCHASERS.
Not applicable to open-end management investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The registrant does not have procedures by which shareholders may recommend
nominees to the registrant's board of trustees.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The certifying officers, whose certifications are included herewith, have
evaluated the registrant's disclosure controls and procedures within 90 days of
the filing date of this report. In their opinion, based on their evaluation, the
registrant's disclosure controls and procedures are adequately designed, and are
operating effectively to ensure, that information required to be disclosed by
the registrant in the reports it files or submits under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's last fiscal half-year that have
materially affected, or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEMS 12. EXHIBITS.
(a)(1) Code of Ethics attached hereto.
(a)(2) Separate certifications for the principal executive officer and the
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) are filed herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(b)) also accompany this filing as an
Exhibit.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Causeway Capital Management Trust
By (Signature and Title)* /s/ Turner Swan
---------------------
Turner Swan, President
Date: 12/03/04
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Turner Swan
---------------------
Turner Swan, President
Date: 12/03/04
By (Signature and Title)* /s/ Peter Golden
----------------------
Peter Golden, Treasurer
Date: 12/03/04
* Print the name and title of each signing officer under his or her signature.