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)
----------
11111 Santa Monica Boulevard, Suite 1500
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, 2009
DATE OF REPORTING PERIOD: SEPTEMBER 30, 2009
ITEM 1. REPORTS TO STOCKHOLDERS.
(CAUSEWAY FUNDS LOGO)
ANNUAL REPORT
CAUSEWAY
INTERNATIONAL
VALUE FUND
SEPTEMBER 30, 2009
TABLE OF CONTENTS
Letter to Shareholders 2
Schedule of Investments 7
Sector Diversification 11
Statement of Assets and Liabilities 12
Statement of Operations 13
Statement of Changes in Net Assets 14
Financial Highlights 16
Notes to Financial Statements 18
Report of Independent Registered
Public Accounting Firm 25
Notice to Shareholders 26
Trustees and Officers Information 27
Disclosure of Fund Expenses 30
Statement Regarding Basis for Approval
of Investment Advisory Agreement 32
LETTER TO SHAREHOLDERS
For the fiscal year ended September 30, 2009, the Causeway International Value
Fund Institutional Class returned 4.28% and the Investor Class returned 4.07%
compared to the MSCI EAFE(R) Index return of 3.80%. Since the Fund's inception
on October 26, 2001, its average annual total returns are 8.78% for the
Institutional Class and 8.52% for the Investor Class compared to the MSCI
EAFE(R) Index's average annual total return of 7.06% for the same period. At
fiscal year-end, the Fund had net assets of $2.1 billion including a cash
position of 3.6%.
PERFORMANCE REVIEW
What a difference a year makes. Equity market performance over the past twelve
months might best be described as bi-polar. The past year has (or for that
matter the past several years have) been extraordinary. From the last downturn
in 2003, global equity markets responded favorably to a sustained period of
loose credit, synchronized global economic expansion, and record corporate
profitability. All this ended in October 2007, and markets began to fall
precipitously. By the middle of March, 2009, investors became increasingly
concerned that the global financial system would fail. As investor confidence
unraveled, several high profile banks in the US and Europe faced bankruptcy,
government conservatorship, private takeover, or distressed sale. This caused
further de-leveraging and led to extreme investor risk aversion, which continued
to pressure global capital markets. With the MSCI World Index down almost 25% in
calendar 2009 through the March 9, 2009 low point on top of calendar 2008's
significant market retreat, investors faced the worst bear market since the
1930s. However, the unprecedented synchronized rescue by monetary and fiscal
policymakers globally saved the collapsing financial system. Investors began to
look past the vast short-term economic hurdles and instead focused on the
likelihood of economic recovery. Stock markets lead economies, and typically
discount the future in advance of the statistics confirming real improvement.
And indeed, economic indicators did begin to improve. From the March 2009 lows,
global equities rebounded tremendously; each share class of the Fund gained over
78% in the six months from the March 9, 2009 market low. Furthermore,
international returns were amplified by the strength of foreign currencies
relative to the US dollar.
Of course, monumental challenges remain. The International Monetary Fund (IMF)
expects global losses on loans and investments as a result of the financial
crisis to total $3.4 trillion, around $600 billion less than previously
estimated, but still a drag on credit creation and ensuing gross domestic
product growth. The revised forecast follows a rise in securities values and
signs of stability in financial markets as a result of massive stimulus efforts
by governments and central banks. Banks, however, have yet to recognize more
than half of their expected asset write-downs, the IMF warned. By IMF estimates,
US banks have recognized about 60% of expected write-downs, while banks in Great
Britain and the euro zone have recognized approximately 40%. Based on IMF
estimates, US and European banks need to raise another $1.3 trillion in capital,
on top of the $198 billion of
2 CAUSEWAY INTERNATIONAL VALUE FUND
additional equity capital issued by banks in the first nine months of 2009, to
restore capital to the levels of the mid-1990s. These banks must still raise
capital equal to approximately two-thirds of their outstanding equity. That
seems a stretch. If investors decide not to participate in all this equity
capital raising, banks will be forced to shrink their assets and reduce lending
even further. In that scenario, credit capacity will likely shrink for many
years ahead, exacerbated by the near demise of syndicated lending, securitized
lending, and off-balance sheet vehicles such as conduits.
The best performing economic sectors from October 1, 2008 through mid-March,
2009 (albeit all negative performers) were the traditional economically
defensive areas of equity markets: namely, healthcare, consumer staples,
utilities, and telecommunication services. Investors, fearing the worst, sought
shelter in these defensive stocks. However, once the prospect for an economic
rebound took hold, the most economically geared companies attracted investor
attention. These cyclical sectors included materials, consumer discretionary,
information technology, financials, and industrials. Meanwhile, the traditional
defensives underperformed as investors rotated out of these sectors to buy the
most cyclically exposed companies. Furthermore, much of the best performance
occurred in small-to-mid cap stocks, and in the most highly-leveraged companies
of every size.
In the fiscal year, Fund holdings in the materials, semiconductor & semi
equipment, pharmaceuticals & biotechnology, food beverage & tobacco, and
consumer durables industry groups contributed to relative outperformance
compared to the MSCI EAFE(R) Index, while holdings in the banks, diversified
financials, insurance, media and capital goods industry groups detracted from
relative performance during the period. Two of the top individual contributors
to performance this period were semiconductor equipment manufacturers, Tokyo
Electron (Japan) and ASML Holding (the Netherlands). Other notable contributors
to return included metals and mining company, Rio Tinto (UK), paint and
industrial coatings manufacturer, Akzo Nobel (the Netherlands), and energy
services firm, Technip (France). Several European and one Japanese bank topped
the list of largest individual detractors to return including ING Groep (the
Netherlands), Royal Bank of Scotland (UK), Allied Irish Banks, Unicredit (Italy)
and Mitsubishi UFJ Financial Group (Japan). Banks seemingly headed for
nationalization or massive capital raising had no place in the Fund and were
sold. We retained exposure to higher quality banks, likely beneficiaries of a
more disciplined lending environment in the years ahead. We also added a new
bank to the portfolio: the much beleaguered and highly undervalued Swiss
institution, UBS. However, we remain cautious overall on the continued capital
needs and monumental credit costs for most banks, and gave the Fund a lower
exposure to bank stocks than even a year ago. As a result, the Fund did not
participate fully in this year's rally in the financials sector.
CAUSEWAY INTERNATIONAL VALUE FUND 3
Currencies demonstrated significant volatility over the period. De-leveraging
and risk-reduction led to temporary demand for the US dollar. The US dollar
appreciated versus every major currency except the Japanese yen during the
financial crisis, only to lose strength after the March 2009 equity market lows.
Due to the Fund's relative underweight to a strong Japanese yen and Australian
dollar, and its exposure to a weak South Korean won (South Korea is not part of
the developed MSCI EAFE(R) Index), the Fund was adversely affected by currency
movements this fiscal year.
SIGNIFICANT PORTFOLIO CHANGES
Over the past year, the Fund experienced increased portfolio turnover, as
historically high levels of share price volatility offered attractive entry
costs for undervalued companies with excellent financial strength and enviable
business franchises. We used the bear market as an opportunity to trade out of
riskier holdings and buy market leaders with scale and product or technology
advantages in a variety of industries. As a result of our bottom up stock
selection process, employing risk-adjusted expected returns, the Fund's exposure
to several sectors and countries changed during the fiscal year. The weightings
in the materials, information technology, and consumer discretionary sectors
increased substantially, while weightings in the financials and consumer staples
sectors decreased. As a byproduct of changes to stocks held, country weightings
also shifted during the fiscal year. The most notable include reduced exposure
to companies in the United Kingdom (-5.2%) and France (-3.5%) and increased
exposure to companies in Japan (+7.9%) and Switzerland (+3.3%). The Japanese
equity market has been a significant laggard. However, this presents an
opportunity for the disciplined value investor. Historically, Japanese companies
traded at significant premiums to their foreign peers. But during this bear
market, we were afforded the opportunity to purchase companies that dominate
global manufacturing industries such as industrial automation, pneumatic
equipment and semiconductor production equipment. These companies boast superior
financial strength, and many have net (surplus) cash on their balance sheets.
For the first time since inception, Japan now represents the single largest
country weight (albeit still below benchmark weight) for the Fund.
Significant purchases this year included industrial automation & robotics
manufacturer, Fanuc (Japan), metals & mining company, Rio Tinto (UK), two
semiconductor equipment manufacturers, Tokyo Electron (Japan) and ASML Holding
(the Netherlands), telecommunications equipment manufacturer, Ericsson (Sweden),
and three pharmaceutical giants, Roche Holding (Switzerland), Novartis
(Switzerland) and Sanofi-Aventis (France). The largest sales during the period
included building materials company, CRH (Ireland), power utility, Electricite
de France (France), insurer, Manulife Financial (Canada), financial services
provider, Credit Suisse Group (Switzerland), two fully integrated energy
producers, BP (UK) and Royal Dutch/Shell (UK/the Netherlands), British American
Tobacco (UK), and defense contractor, BAE Systems (UK).
INVESTMENT OUTLOOK
The fear gripping investors in late 2008/early 2009 clearly has abated and risk
appetites have increased commensurately. Abundant monetary liquidity has found
its way into securities prices. For
4 CAUSEWAY INTERNATIONAL VALUE FUND
much of this 2009 stock market recovery, bank stocks have enjoyed the greatest
amount of investor attention. As of the end of September, bank stocks represent
the same weight in equity indices that they did before the credit crisis. A herd
effect drove the banks into a near abyss, and the same momentum on the upswing
has led index-linked investors to buy banks. We are considerably more cautious
on bank stocks than the overall markets. We prefer a low-risk strategy of giving
the Fund access to global economic recovery through world class, unleveraged
companies in non-financial sectors. Major emerging markets have also attracted
investors' funds, promising growth from ever wealthier consumers, rather than
the consumption shrinkage afflicting the developed countries. China, as one
example, provides a sizable amount of the marginal growth of the developed
markets' industrial companies. We are watching potential leading indicators for
the Chinese economy and monitoring bad debts in the local banking system for
signs of over heating. We believe our disciplined value approach will have the
Fund well positioned over the coming months, quarters, and years. Causeway has
built a broadly diversified portfolio from the bottom-up, selecting undervalued
holdings with considerable upside potential, across industries and regions. We
are taking profit in cyclical stocks whose share prices have already discounted
recovery, and reinvesting in stable, highly cash generative segments of the
equity markets. Furthermore, our preference for financial strength should
provide downside protection. We believe dividends paid by portfolio holdings
will deliver a considerable component of the Fund's total return, paying the
Fund to wait for share prices to rise. Despite the recovery in global equity
markets, attractive opportunities still await those who do careful research and
understand the trends affecting industries across the globe.
We thank you for your continued confidence in 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
/s/ Jonathan P. Eng /s/ Kevin Durkin
Jonathan P. Eng Kevin Durkin
Portfolio Manager Portfolio Manager
October 14, 2009
THE ABOVE COMMENTARY EXPRESSES THE ADVISER'S 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.
CAUSEWAY INTERNATIONAL VALUE FUND 5
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN CAUSEWAY
INTERNATIONAL VALUE FUND, INSTITUTIONAL CLASS SHARES AND INVESTOR CLASS SHARES
VERSUS THE MSCI EAFE(R) INDEX
(PERFORMANCE GRAPH)
Causeway
International Causeway
Value Fund, International MSCI
Institutional Value Fund, EAFE
Class Investor Class Index
------------- -------------- -------
10/26/2001 $10,000 $10,000 $10,000
9/30/2002 $8,828 $8,805 $8,062
9/30/2003 $12,024 $11,954 $10,201
9/30/2004 $15,321 $15,201 $12,499
9/30/2005 $18,381 $18,201 $15,789
9/30/2006 $21,790 $21,527 $18,891
9/30/2007 $26,415 $26,032 $23,685
9/30/2008 $18,691 $18,380 $16,550
9/30/2009 $19,490 $19,128 $17,178
ANNUALIZED ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR 5 YEAR INCEPTION
RETURN RETURN RETURN TO DATE
-------- ---------- ---------- ----------
INSTITUTIONAL CLASS 4.28% -3.65% 4.93% 8.78%
INVESTOR CLASS 4.07% -3.86% 4.70% 8.52%
MSCI EAFE(R) INDEX 3.80% -3.12% 6.57% 7.06%
The performance in the above graph does not reflect the deduction of taxes the
shareholder will pay on Fund distributions or the redemptions of Fund shares.
The inception date of Causeway International Value Fund is October 26, 2001.
THE PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT AN INDICATION OF
FUTURE RESULTS. INVESTMENT RETURN AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH LESS THAN
THEIR ORIGINAL COST AND CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE
PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END,
PLEASE CALL 1-866-947-7000 OR VISIT www.causewayfunds.com. INVESTMENT
PERFORMANCE MAY REFLECT FEE WAIVERS. IN THE ABSENCE OF SUCH FEE WAIVERS, TOTAL
RETURN MAY BE REDUCED. TOTAL RETURNS ASSUME REINVESTMENT OF DIVIDENDS AND
CAPITAL GAINS DISTRIBUTIONS AT NET ASSET VALUE WHEN PAID. INVESTOR CLASS SHARES
PAY A SHAREHOLDER SERVICE 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 PAY NO SHAREHOLDER SERVICE FEE. IF YOUR ACCOUNT
INCURRED A REDEMPTION FEE, YOUR PERFORMANCE WILL BE LOWER THAN THE PERFORMANCE
SHOWN HERE. FOR MORE INFORMATION, PLEASE SEE THE PROSPECTUS.
THE MSCI EAFE(R) INDEX IS AN ARITHMETICAL AVERAGE WEIGHTED BY MARKET VALUE OF
THE PERFORMANCE OF APPROXIMATELY 1,000 NON-U.S. COMPANIES REPRESENTING 20 STOCK
MARKETS IN EUROPE, AUSTRALASIA, NEW ZEALAND AND THE FAR EAST. THE INDEX IS GROSS
OF WITHHOLDING TAXES AND ASSUMES REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS.
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).
6 CAUSEWAY INTERNATIONAL VALUE FUND
SCHEDULE OF INVESTMENTS (000)*
SEPTEMBER 30, 2009
NUMBER
CAUSEWAY INTERNATIONAL VALUE FUND OF SHARES VALUE
- --------------------------------- ---------- ----------
COMMON STOCK
CANADA -- 2.4%
Precision Drilling Trust 5,328,752 $ 35,658
TELUS Corp., Class A 480,093 14,946
----------
50,604
----------
FRANCE -- 15.7%
Accor SA 292,577 16,284
AXA SA 1,757,087 47,560
BNP Paribas SA 390,679 31,210
France Telecom SA+ 1,705,429 45,425
Sanofi-Aventis SA+ 740,749 54,352
Technip SA 1,221,054 77,982
Vinci SA 1,158,706 65,540
----------
338,353
----------
GERMANY -- 12.5%
Bayer AG 534,513 37,030
Deutsche Post AG 1,875,981 35,133
E.ON AG 1,429,029 60,592
Linde AG 527,985 57,226
Siemens AG 839,325 77,709
----------
267,690
----------
GREECE -- 1.7%
OPAP SA 1,421,634 36,650
----------
HONG KONG -- 1.6%
Yue Yuen Industrial Holdings Ltd.+ 12,524,533 34,748
----------
IRELAND -- 1.1%
Smurfit Kappa Group PLC+ 3,012,955 23,716
----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAUSEWAY INTERNATIONAL VALUE FUND 7
SCHEDULE OF INVESTMENTS (000)* (CONTINUED)
SEPTEMBER 30, 2009
NUMBER
CAUSEWAY INTERNATIONAL VALUE FUND OF SHARES VALUE
- --------------------------------- ---------- ----------
ITALY -- 1.0%
Snam Rete Gas SpA 4,475,057 $ 21,770
----------
JAPAN -- 17.2%
Fanuc Ltd. 724,500 64,990
Haseko Corp. 18,773,500 18,410
Honda Motor Co. Ltd. 665,700 20,511
Mitsubishi Gas Chemical Co. Inc. 6,145,000 33,416
Mitsubishi UFJ Financial Group Inc. 5,230,600 28,094
Sankyo Co. Ltd. 602,700 37,744
Shin-Etsu Chemical Co. Ltd. 716,000 44,042
SMC Corp. 209,900 25,823
Sony Financial Holdings Inc.+ 13,514 38,837
Tokyo Electron Ltd. 910,400 58,130
----------
369,997
----------
NETHERLANDS -- 9.1%
Akzo Nobel NV 1,019,851 63,170
ASML Holding NV 1,093,133 32,147
Reed Elsevier NV 3,700,397 41,742
TNT NV 2,172,733 58,302
----------
195,361
----------
NORWAY -- 2.3%
Aker Kvaerner ASA 4,487,650 50,558
----------
SINGAPORE -- 1.4%
Singapore Airlines Ltd. 3,073,000 30,071
----------
SOUTH KOREA -- 1.9%
Hyundai Heavy Industries 264,626 40,538
----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
8 CAUSEWAY INTERNATIONAL VALUE FUND
SCHEDULE OF INVESTMENTS (000)* (CONTINUED)
SEPTEMBER 30, 2009
NUMBER
CAUSEWAY INTERNATIONAL VALUE FUND OF SHARES VALUE
- --------------------------------- ---------- ----------
SPAIN -- 3.5%
Enagas 1,038,068 $ 21,688
Telefonica SA 1,919,904 52,964
----------
74,652
----------
SWEDEN -- 2.2%
Skandinaviska Enskilda Banken AB, Class A 1,100,364 7,424
Telefonaktiebolaget LM Ericsson, Class B 3,883,933 39,029
----------
46,453
----------
SWITZERLAND -- 10.0%
Compagnie Financiere Richemont SA 1,388,233 39,227
Novartis AG 776,496 38,855
Roche Holding AG 249,517 40,334
UBS AG 2,968,449 54,344
Zurich Financial Services AG 173,097 41,178
----------
213,938
----------
UNITED KINGDOM -- 12.4%
Aviva PLC 6,143,779 43,999
British American Tobacco PLC 1,020,729 32,023
HSBC Holdings PLC 3,517,321 40,804
Michael Page International PLC 3,586,355 19,178
Rexam PLC 563,940 2,352
Rio Tinto PLC 861,286 36,732
Rolls-Royce Group PLC 2,865,322 21,560
Royal Dutch Shell PLC, Class B 745,772 20,691
Stolt-Nielsen SA 136,800 1,789
Vodafone Group PLC 21,107,997 47,297
----------
266,425
----------
TOTAL COMMON STOCK
(COST $2,070,758) -- 96.0% 2,061,524
----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAUSEWAY INTERNATIONAL VALUE FUND 9
SCHEDULE OF INVESTMENTS (000)* (CONCLUDED)
SEPTEMBER 30, 2009
NUMBER
CAUSEWAY INTERNATIONAL VALUE FUND OF SHARES VALUE
- --------------------------------- ---------- ----------
RIGHTS
FRANCE -- 0.0%
BNP Paribas
Expire 10/13/09** 390,679 $ 846
----------
TOTAL RIGHTS
(COST $--) -- 0.0% 846
----------
SHORT-TERM INVESTMENTS***
Dreyfus Cash Management,
Institutional Class, 0.227% 38,221,652 38,222
Dreyfus Cash Management Plus,
Institutional Class, 0.260% 40,000,000 40,000
----------
TOTAL SHORT-TERM INVESTMENTS
(COST $78,222) -- 3.6% 78,222
----------
TOTAL INVESTMENTS -- 99.6%
(COST $2,148,980) 2,140,592
----------
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.4% 8,135
----------
NET ASSETS -- 100.0% $2,148,727
==========
* Except for share data.
** Non-income producing security.
*** The rate reported is the 7-day effective yield as of September 30, 2009.
+ Resales of portions of these securities are subject to Rule 144A of the
Securities Act of 1933. Such securities may be sold in transactions exempt
from registration, normally on foreign exchanges or to qualified
institutional buyers.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
10 CAUSEWAY INTERNATIONAL VALUE FUND
SECTOR DIVERSIFICATION
AS OF SEPTEMBER 30, 2009, THE SECTOR DIVERSIFICATION WAS AS FOLLOWS (UNAUDITED):
CAUSEWAY INTERNATIONAL VALUE FUND % OF NET ASSETS
- --------------------------------- ---------------
COMMON STOCK
Industrials 20.5%
Financials 15.6
Materials 12.1
Consumer Discretionary 11.4
Energy 8.6
Health Care 7.9
Telecommunication Services 7.5
Information Technology 6.0
Utilities 4.9
Consumer Staples 1.5
-----
TOTAL COMMON STOCK 96.0
-----
RIGHTS 0.0
-----
SHORT-TERM INVESTMENTS 3.6
-----
EXCESS OF CASH AND RECEIVABLES OVER PAYABLES 0.4
-----
NET ASSETS 100.0%
=====
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAUSEWAY INTERNATIONAL VALUE FUND 11
STATEMENT OF ASSETS AND LIABILITIES (000)*
CAUSEWAY
INTERNATIONAL
VALUE FUND
---------------
9/30/09
---------------
ASSETS:
Investments at Value (Cost $2,148,980) $ 2,140,592
Receivable for Fund Shares Sold 16,298
Receivable for Tax Reclaims 5,635
Receivable for Dividends and Interest 3,469
Receivable for Investment Securities Sold 1,908
Foreign Currency (cost $470) 457
Prepaid Expenses 39
-----------
TOTAL ASSETS 2,168,398
-----------
LIABILITIES:
Payable for Investment Securities Purchased 10,951
Payable for Fund Shares Redeemed 6,691
Payable due to Investment Adviser 1,383
Payable for Shareholder Service Fees -- Investor Class 140
Payable due to Administrator 94
Payable for Trustees' Fees 71
Other Accrued Expenses 341
-----------
TOTAL LIABILITIES 19,671
-----------
NET ASSETS $ 2,148,727
===========
NET ASSETS:
Paid-in Capital (unlimited authorization -- no par value) $ 2,669,147
Undistributed Net Investment Income 30,807
Accumulated Net Realized Loss on Investments (543,091)
Net Unrealized Depreciation on Investments (8,388)
Net Unrealized Appreciation on Foreign Currencies and Translation of
Other Assets and Liabilities Denominated in Foreign Currencies 252
-----------
NET ASSETS $ 2,148,727
===========
NET ASSET VALUE PER SHARE (BASED ON NET ASSETS OF
$1,110,261,961 / 98,245,676 SHARES) -- INSTITUTIONAL CLASS $ 11.30
===========
NET ASSET VALUE PER SHARE (BASED ON NET ASSETS OF
$1,038,465,133 / 92,473,088 SHARES) -- INVESTOR CLASS $ 11.23
===========
* Except for Net Asset Value data.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
12 CAUSEWAY INTERNATIONAL VALUE FUND
STATEMENT OF OPERATIONS (000)
CAUSEWAY
INTERNATIONAL
VALUE FUND
---------------
10/01/08 to
9/30/09
---------------
INVESTMENT INCOME:
Dividend Income (net of foreign taxes withheld of $6,049) $ 56,279
---------
TOTAL INVESTMENT INCOME 56,279
---------
EXPENSES:
Investment Advisory Fees 13,677
Shareholder Service Fees -- Investor Class 1,808
Administration Fees 954
Custodian Fees 572
Printing Fees 475
Professional Fees 345
Transfer Agent Fees 338
Trustees' Fees 246
Registration Fees 70
Other Fees 260
---------
TOTAL EXPENSES 18,745
---------
NET INVESTMENT INCOME 37,534
---------
NET REALIZED AND UNREALIZED GAIN (L0SS) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS:
Net Realized Loss from Security Transactions (538,160)
Net Realized Loss from Foreign Currency Transactions (915)
Net Change in Unrealized Appreciation on Investments 435,775
Net Change in Unrealized Appreciation on Foreign Currency and Translation
of Other Assets and Liabilities Denominated in Foreign Currency 315
---------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS (102,985)
---------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (65,451)
=========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAUSEWAY INTERNATIONAL VALUE FUND 13
STATEMENT OF CHANGES IN NET ASSETS (000)
CAUSEWAY INTERNATIONAL VALUE FUND
---------------------------------
10/01/08 to 10/01/07 to
9/30/09 9/30/08
--------------- ---------------
OPERATIONS:
Net Investment Income $ 37,534 $ 94,831
Net Realized Gain (Loss) from Security Transactions (538,160) 99,550
Net Realized Loss from Foreign Currency Transactions (915) (2,313)
Net Change in Unrealized Appreciation (Depreciation) on Investments 435,775 (1,364,263)
Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency
and Translation of Other Assets and Liabilities Denominated
in Foreign Currency 315 (409)
----------- -----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS (65,451) (1,172,604)
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income Dividends:
Institutional Class (55,848) (60,622)
Investor Class (38,045) (31,378)
----------- -----------
Total Net Investment Income Dividends (93,893) (92,000)
----------- -----------
Net Capital Gain Distributions:
Institutional Class (49,463) (534,883)
Investor Class (36,055) (310,212)
----------- -----------
Total Net Capital Gain Distributions (85,518) (845,095)
----------- -----------
TOTAL DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS (179,411) (937,095)
----------- -----------
NET DECREASE IN NET ASSETS DERIVED
FROM CAPITAL SHARE TRANSACTIONS(1) (157,545) (203,354)
Redemption Fees(2) 119 55
----------- -----------
TOTAL DECREASE IN NET ASSETS (402,288) (2,312,998)
----------- -----------
NET ASSETS:
Beginning of Year 2,551,015 4,864,013
----------- -----------
END OF YEAR $ 2,148,727 $ 2,551,015
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME $ 30,807 $ 88,127
=========== ===========
(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.
14 CAUSEWAY INTERNATIONAL VALUE FUND
This page intentionally left blank.
FINANCIAL HIGHLIGHTS
FOR THE YEARS ENDED SEPTEMBER 30,
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
Net Realized
and
Net Asset Unrealized Dividends Distributions Total
Value, Net Gain Total from Net from Dividends
Beginning Investment (Loss) on from Investment Capital and
of Period ($) Income ($) Investments ($) Operations ($) Income ($) Gains ($) Distributions ($)
------------- ---------- --------------- -------------- ---------- ------------- -----------------
CAUSEWAY INTERNATIONAL
VALUE FUND+
INSTITUTIONAL CLASS
2009 12.14 0.20 (0.08) 0.12 (0.51) (0.45) (0.96)
2008 21.85 0.42 (5.68) (5.26) (0.45) (4.00) (4.45)
2007 19.04 0.39 3.54 3.93 (0.23) (0.89) (1.12)
2006 16.99 0.39 2.61 3.00 (0.37) (0.58) (0.95)
2005 14.80 0.34 2.56 2.90 (0.26) (0.45) (0.71)
INVESTOR CLASS
2009 12.05 0.18 (0.07) 0.11 (0.48) (0.45) (0.93)
2008 21.71 0.39 (5.64) (5.25) (0.41) (4.00) (4.41)
2007 18.93 0.33 3.53 3.86 (0.19) (0.89) (1.08)
2006 16.90 0.35 2.60 2.95 (0.34) (0.58) (0.92)
2005 14.73 0.29 2.57 2.86 (0.24) (0.45) (0.69)
+ Per share amounts calculated using average shares method.
Amounts designated as "--" are $0 or are rounded to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
16 CAUSEWAY INTERNATIONAL VALUE FUND
Ratio
Ratio of of Net
Net Assets Expenses Investment
Net Asset End of to Average Income Portfolio
Redemption Value, End Total Period Net to Average Turnover
Fees ($) of Period ($) Return (%) ($000) Assets (%) Net Assets (%) Rate (%)
- ---------- ------------- ---------- ---------- ---------- -------------- ---------
-- 11.30 4.28 1,110,262 0.99 2.29 47
-- 12.14 (29.24) 1,548,542 0.91 2.56 29
-- 21.85 21.22 3,080,040 0.90 1.89 40
-- 19.04 18.54 3,323,722 0.92 2.18 38
-- 16.99 19.98 2,817,467 0.98 2.10 22
-- 11.23 4.07 1,038,465 1.23 2.07 47
-- 12.05 (29.40) 1,002,473 1.15 2.38 29
-- 21.71 20.92 1,783,973 1.13 1.63 40
-- 18.93 18.27 1,433,361 1.15 1.97 38
-- 16.90 19.74 1,191,991 1.21 1.81 22
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
17 CAUSEWAY INTERNATIONAL VALUE FUND
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. The Trust has two
additional series, the financial statements of which are presented separately.
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 generally accepted accounting principles
("GAAP") 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 and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
SECURITY VALUATION - Except as described below, securities listed on a
securities exchange (except the NASDAQ Stock Market ("NASDAQ")) or
Over-the-Counter ("OTC") for which market quotations are available are valued at
the last reported sale price ("regular way") as of the close of regular trading
on each business day, or, if there is no such reported sale, at the last
reported bid price for long positions. For securities traded on NASDAQ, the
NASDAQ Official Closing Price will be used. Securities listed on multiple
exchanges or OTC markets are valued on the exchange or OTC market considered by
the Fund to be the primary market. 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. Investments in the Dreyfus Cash Management and the
Dreyfus Cash Management Plus money market funds are valued daily at the net
asset value per share.
Securities for which market prices are not "readily available" are valued in
accordance with fair value pricing procedures approved 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 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
18 CAUSEWAY INTERNATIONAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
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.
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 thresholds established by
the Committee. The vendor provides a fair value for foreign securities based on
factors and methodologies involving, generally, tracking valuation correlations
between the U.S. market and each non-U.S. security.
In accordance with the authoritative guidance on fair value measurements and
disclosure under GAAP, the Fund discloses fair value of its investments in a
hierarchy that prioritizes the inputs to valuation techniques used to measure
the fair value. The objective of a fair value measurement is to determine the
price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date (an
exit price). Accordingly, the fair value hierarchy gives the highest priority to
quoted prices (unadjusted) in active markets for identical assets or liabilities
(Level 1) and the lowest priority to unobservable inputs (Level 3). The guidance
establishes three levels of fair value hierarchy as follows:
- Level 1 -- Unadjusted quoted prices in active markets for identical,
unrestricted assets or liabilities that the Fund has the ability to
access at the measurement date;
- Level 2 -- Quoted prices which are not active, or inputs that are
observable (either directly or indirectly) for substantially the full
term of the asset or liability; and
- Level 3 -- Prices, inputs or exotic modeling techniques which are both
significant to the fair value measurement and unobservable (supported
by little or no market activity).
Investments are classified within the level of the lowest significant input
considered in determining fair value. Investments classified within Level 3
whose fair value measurement considers several inputs may include Level 1 or
Level 2 inputs as components of the overall fair value measurement. As of
September 30, 2009, all of the Fund's investments are Level 1. For details of
the investment classifications, reference the Schedule of Investments.
For the year ended September 30, 2009, there were no significant changes to the
Fund's fair value methodologies.
FEDERAL INCOME TAXES -- It is the Fund's intention to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code and
to distribute all of its taxable income. Accordingly, no provision for Federal
income taxes has been made in the financial statements.
The Fund evaluates tax positions taken or expected to be taken in the course of
preparing the Fund's tax returns to determine whether it is
"more-likely-than-not" (i.e., greater than 50-percent) that each tax position
will be sustained upon examination by a taxing authority based on the technical
merits of the position. Tax positions not deemed
CAUSEWAY INTERNATIONAL VALUE FUND 19
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
to meet the more-likely-than-not threshold are recorded as a tax benefit or
expense in the current year. The Fund did not record any tax provision in the
current period. However, management's conclusions regarding tax positions taken
may be subject to review and adjustment at a later date based on factors
including, but not limited to, examination by tax authorities (i.e., the last 3
tax year ends, as applicable), on-going analysis of and changes to tax laws,
regulations and interpretations thereof.
As of and during the year ended September 30, 2009, the Fund did not have a
liability for any unrecognized tax benefits. The Fund recognizes interest and
penalties, if any, related to unrecognized tax benefits as income tax expense in
the Statement of Operations. During the year the Fund did not incur any
significant interest or penalties.
SECURITY TRANSACTIONS AND RELATED INCOME - Security transactions are accounted
for on the date the security is purchased or sold (trade date). 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) the market value of investment securities, assets and liabilities is
converted at the current rate of exchange; and
(2) purchases and sales of investment securities, income and expenses are
converted at the relevant rates of exchange prevailing on the respective dates
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.
FOREIGN CURRENCY EXCHANGE CONTRACTS - When the Fund purchases or sells foreign
securities, it may enter into foreign currency exchange contracts to minimize
foreign exchange risk from the trade date to the settlement date of the
transaction. Losses from these transactions may arise from changes in the value
of the foreign currency or if the counterparties do not perform under the
contract's terms.
EXPENSE/CLASSES - Expenses that are directly related to one Fund of the Trust
are charged directly to that Fund. Other operating expenses of the Trust are
prorated to the Fund and the other series of the Trust on the basis of relative
daily net assets. 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 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 - Through November 2008, the Fund imposed a redemption fee of 2%
on the
20 CAUSEWAY INTERNATIONAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
original value of capital shares redeemed by shareholders less than 90 days
after purchase. Effective December 1, 2008, the redemption fee period was
reduced to 60 days. The redemption fee does not apply to shares purchased
through reinvested distributions or shares redeemed through designated
systematic withdrawal plans. The redemption fee does not normally apply to
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. However, the Fund seeks agreements with these intermediaries to
impose the Fund's redemption fee or a different redemption fee on their
customers if feasible, or to impose other appropriate restrictions on excessive
short-term trading. For the fiscal year ended September 30, 2009, the
Institutional Class and Investor Class received $105,499 and $13,694 in
redemption fees, respectively.
Brokerage commission recapture payments are credited to realized capital gains
and are included in net realized gains from security transactions on the
statement of operations. For the fiscal year ended September 30, 2009, the Fund
received commission recapture payments of $126,229.
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
"Adviser"). Under the Advisory Agreement, the Adviser is entitled to a monthly
fee equal to an annual rate of 0.80% of the Fund's average daily net assets. The
Adviser contractually agreed through September 30, 2009 to waive its fee and, to
the extent necessary, reimburse the Fund to keep total annual fund operating
expenses (excluding brokerage fees and commissions, interest, taxes, fees and
expenses of other funds in which the Fund invests, and extraordinary expenses)
from exceeding 1.05% and 1.30% of Institutional Class and Investor Class average
daily net assets, respectively. No waivers or reimbursements were required for
the year ended September 30, 2009.
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
Trust as follows: 0.06% up to $1 billion; 0.05% of the assets exceeding $1
billion up to $2 billion; 0.04% of the assets exceeding $2 billion up to $3
billion; 0.03% of the assets exceeding $3 billion up to $4 billion; and 0.02% of
the assets exceeding $4 billion. The Trust is subject to a minimum annual fee of
$165,000 for the first portfolio plus $80,000 for each additional portfolio plus
$20,000 for each additional share class (over two) in each portfolio.
The Trust has adopted a Shareholder Service Plan and Agreement for Investor
Class shares that allows the Trust 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 year ended September
30, 2009, the Investor Class paid 0.24% of average daily net assets under this
plan.
CAUSEWAY INTERNATIONAL VALUE FUND 21
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
The Trust and SEI Investments Distribution Co. (the "Distributor") have entered
into a Distribution Agreement. The Distributor receives no fees from the Fund
for its distribution services under this agreement.
The officers of the Trust are also officers or employees of the Administrator,
Distributor or Adviser. They receive no fees for serving as officers of the
Trust.
4. INVESTMENT TRANSACTIONS
The cost of security purchases and the proceeds from the sale of securities,
other than short-term investments, during the year ended September 30, 2009, for
the Fund were as follows:
Purchases Sales
(000) (000)
- --------- -----------
$813,667 $1,087,873
5. RISKS OF FOREIGN INVESTING
Because the Fund invests most of its assets in foreign securities, the Fund is
subject to further risks. For example, the value of the Fund's securities may be
affected by social, political and economic developments and U.S. and foreign
laws relating to foreign investment. Further, because the Fund invests in
securities denominated in foreign currencies, the Fund's securities may go down
in value depending on foreign exchange rates. Other risks include trading,
settlement, custodial, and other operational risks; withholding or other taxes;
and the less stringent investor protection and disclosure standards of some
foreign markets. All of these factors can make foreign securities less liquid,
more volatile and harder to value than U.S. securities. These risks are higher
for emerging markets investments.
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 dividends from net investment income
and distributions from 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.
Dividend and interest income is recorded net of non-U.S. taxes paid.
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 generally accepted accounting
principles in the United States of America. These book/tax differences are
either temporary or permanent in nature. 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.
22 CAUSEWAY INTERNATIONAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
Accordingly, the following permanent differences, which are primarily due to
realized losses on foreign currency transactions, were reclassified to/(from)
the following accounts as of September 30, 2009 (000):
Undistributed Accumulated
Net Investment Net Realized
Income Gain
- -------------- ------------
$(961) $961
These reclassifications had no impact on net assets or net asset value per
share.
The tax character of dividends and distributions declared during the fiscal
years ended September 30, 2009 and September 30, 2008, were as follows (000):
Ordinary Long-Term
Income Capital Gain Total
-------- ------------ --------
2009 $ 93,940 $ 85,471 $179,411
2008 231,396 705,699 937,095
As of September 30, 2009, the components of accumulated losses on a tax basis
were as follows (000):
Undistributed Ordinary Income $ 31,416
Capital Loss Carryforwards (45,997)
Unrealized Depreciation (22,745)
Post-October Losses (482,485)
Post-October Currency Losses (610)
Other Temporary Differences 1
---------
Total Accumulated Losses $(520,420)
=========
Post-October Losses and Post-October Currency Losses represent losses realized
on securities and currency transactions from November 1, 2008 through September
30, 2009 that, in accordance with Federal income tax regulations, the Fund may
elect to defer and treat as having arisen in the following fiscal year.
For Federal income tax purposes, capital loss carryforwards represent realized
losses that the Fund may carryforward for a maximum period of eight years and
apply against future net realized gains. The capital loss carryforwards in the
table above will expire September 30, 2017.
At September 30, 2009, 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 Depreciation
- ---------- ----------- ----------- ------------
$2,163,589 $262,930 $(285,927) $(22,997)
7. CAPITAL SHARES ISSUED AND REDEEMED (000)
Fiscal Year Ended Fiscal Year Ended
September 30, 2009 September 30, 2008
------------------- ---------------------
SHARES VALUE SHARES VALUE
------- --------- ------- -----------
INSTITUTIONAL CLASS:
Shares Sold 16,071 $ 142,443 17,277 $ 294,348
Shares Issued in Reinvestment of
Dividends and Distributions 11,716 94,315 30,817 502,317
Shares Redeemed (57,046) (492,439) (61,569) (1,008,640)
------- --------- ------- -----------
Decrease in Shares Outstanding Derived
from Institutional Class Transactions (29,259) (255,681) (13,475) (211,975)
------- --------- ------- -----------
CAUSEWAY INTERNATIONAL VALUE FUND 23
NOTES TO FINANCIAL STATEMENTS
(CONCLUDED)
7. CAPITAL SHARES ISSUED AND REDEEMED (000) (CONTINUED)
Fiscal Year Ended Fiscal Year Ended
September 30, 2009 September 30, 2008
------------------- -------------------
SHARES VALUE SHARES VALUE
------- --------- ------- ---------
INVESTOR CLASS:
Shares Sold 41,239 374,418 21,359 344,186
Shares Issued in Reinvestment of
Dividends and Distributions 9,176 73,500 20,830 337,658
Shares Redeemed (41,105) (349,782) (41,211) (673,223)
------- --------- ------- ---------
Increase in Shares Outstanding Derived
from Investor Class Transactions 9,310 98,136 978 8,621
------- --------- ------- ---------
Decrease in Shares Outstanding from
Capital Share Transactions (19,949) $(157,545) (12,497) $(203,354)
======= ========= ======= =========
8. RECENT ACCOUNTING PRONOUNCEMENTS
THE FINANCIAL ACCOUNTING STANDARDS BOARD ("FASB") has issued FASB ACS 105
(formerly FASB Statement No. 168), THE "FASB ACCOUNTING STANDARDS
CODIFICATION(TM)" AND THE HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
("ASC 105"). ASC 105 established the FASB Accounting Standards Codification(TM)
("Codification" or "ASC") as the single source of authoritative U.S. GAAP
recognized by the FASB to be applied by nongovernmental entities. Rules and
interpretive releases of the Securities and Exchange Commission ("SEC") under
authority of federal securities laws are also sources of authoritative GAAP for
SEC registrants. The Codification supersedes all existing non-SEC accounting and
reporting standards. All other non-grandfathered, non-SEC accounting literature
not included in the Codification will become non-authoritative.
The Trust has implemented the Codification as of September 30, 2009.
The Fund adopted amendments to authoritative guidance on disclosures about
derivative instruments and hedging activities during the year ended September
30, 2009, which require qualitative disclosures about the objectives and
strategies of derivative instruments, quantitative disclosures about the fair
value amounts of and gains and losses on derivative instruments, and disclosures
of credit-risk-related contingent features in hedging activities. The adoption
of the additional disclosure requirements did not have any impact on the Fund's
financial statements.
9. SUBSEQUENT EVENTS
As of November 25, 2009, the date the financial statements were available to be
issued, no subsequent events or transactions have occurred that would have
materially impacted the financial statements as presented.
24 CAUSEWAY INTERNATIONAL VALUE FUND
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 of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Causeway International Value Fund
(the "Fund") at September 30, 2009, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended, 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, 2009 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Los Angeles, California
November 25, 2009
CAUSEWAY INTERNATIONAL VALUE FUND 25
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 2010. Please
consult your tax adviser for proper treatment of this information.
For the fiscal year ended September 30, 2009, the Fund is designating the
following items with regard to distributions paid during the year:
(A) (B) (E)
Long Term Ordinary (C) (D) Dividends (1)
Capital Gains Income Tax Exempt Total for Corporate
Distributions Distributions Distributions Distributions Dividends Received
(Tax Basis) (Tax Basis) (Tax Basis) (Tax Basis) Deduction
- ------------- ------------- ------------- ------------- ------------------
46.04% 53.96% 0.00% 100.00% 0.00%
(I)
(F) Qualified
Qualified (G) (H) Short-Term
Dividend Income Foreign Interest Capital
(15% Tax Rate Tax Related Gain
for QDI) Credit Dividends Dividends
- --------------- ------- --------- ----------
100.00% 3.35% 1.07% 0.00%
Foreign taxes accrued during the fiscal year ended September 30, 2009, amounted
to $6,224,442 and are expected to be passed through to shareholders as foreign
tax credits on Form 1099 - Dividend for the year ending December 31, 2009. In
addition, for the fiscal year ended September 30, 2009, gross income derived
from sources within foreign countries amounted to $44,509,755 for the Fund.
(1) Qualified 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 excluding pass-through as foreign tax credit.
Item (E) is based on a percentage of ordinary income distributions of the Fund.
Item (F) represents the amount of "Qualified 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 up to 100%.
Item (G) is based on a percentage of ordinary income distributions of the Fund.
Item (H) is the amount of "Interest Related Dividends" as created by the
American Jobs Creation Act of 2004 and is reflected as a percentage of net
investment income distributions that is exempt from U.S. withholding tax when
paid to foreign investors.
Item (I) is the amount of "Qualified Short-Term Capital Gain Dividends" as
created by the American Jobs Creation Act of 2004 and is reflected as a
percentage of short-term capital gain distributions that is exempt from U.S.
withholding tax when paid to foreign investors.
26 CAUSEWAY INTERNATIONAL VALUE FUND
TRUSTEES AND OFFICERS 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
AGE(1) COMPANY SERVED(2) FIVE YEARS BOARD MEMBER(3) BOARD MEMBER(4)
- ---------------------- ----------------- ----------- ------------------------------------------ --------------- ---------------
INDEPENDENT
BOARD MEMBERS(5)
John A. G. Gavin Trustee; Trustee Chairman, Gamma Holdings 3 Director, TCW
Age: 78 Chairman since 9/01; (international consulting and Funds, Inc. and
of the Chairman investment holding company) (since TCW Strategic
Board since 10/04 1968); Senior Counselor, Hicks Income Fund,
TransAmerica Partners (private Inc.; Trustee,
equity investment firm) (since 2001). Hotchkis and
Wiley Funds
John R, Graham Trustee Since Film Composer (since 2005); Senior 3 None
Age: 48 10/08 Vice President, Corporate Financial
Development and Communications,
The Walt Disney Company (2004-
2005); Senior Vice President,
Mergers and Acquisitions, Lehman
Brothers Inc. (2000-2004).
Lawry J. Meister Trustee Since President, Steaven Jones 3 None
Age: 47 10/08 Development Company, Inc.
(real estate firm) (since 1995).
Eric H. Sussman Trustee Trustee Tenured Lecturer, Anderson 3 Trustee,
Age: 43 Chairman since 9/01; Graduate School of Management, Presidio Funds
of the Chairman University of California, Los
Audit since 10/04 Angeles (since 1995); President,
Committee Amber Capital, Inc. (real estate
investment and financial planning
firm) (since 1993).
INTERESTED
BOARD MEMBERS
Mark D. Cone Trustee Since Executive Vice President and 3 None
Age: 41 10/08 Chief Marketing Officer of the
Adviser (since 2001).
CAUSEWAY INTERNATIONAL VALUE FUND 27
TRUSTEES AND OFFICERS 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
AGE(1) COMPANY SERVED(2) FIVE YEARS BOARD MEMBER(3) BOARD MEMBER(4)
- ---------------------- ----------------- ----------- ------------------------------------------ --------------- ---------------
OFFICERS
Turner Swan President and Since 8/01 General Counsel, Secretary, and N/A N/A
11111 Santa Secretary Member of the Adviser (since 2001).
Monica Blvd.,
15th Floor
Los Angeles, CA
90025
Age: 47
Gracie V. Fermelia Chief CCO since Chief Compliance Officer of the Adviser N/A N/A
11111 Santa Compliance 7/05; Asst. (since July 2005); Chief Operating Officer
Monica Blvd., Officer and Sect. since and Member of the Adviser (since 2001).
15th Floor Assistant 8/01
Los Angeles, CA Secretary
90025
Age: 48
Michael Lawson(6) Treasurer Since 7/05 Director of the Administrator's Fund N/A N/A
One Freedom Accounting department (since July 2005);
Valley Drive Manager in the Administrator's Fund
Oaks, PA 19456 Accounting department (November 1998
Age: 48 to July 2005).
Joseph M. Gallo(6) Vice President Since 7/08 Corporate Counsel of the Administrator N/A N/A
One Freedom and Assistant (since 2007); Associate Counsel, ICMA
Valley Drive Secretary Retirement Corporation (2004-2007);
Oaks, PA 19456 Federal Investigator, U.S. Department of
Age: 36 Labor (2002-2004).
Carolyn F. Mead(6) Vice President Since 7/08 Corporate Counsel of the Administrator N/A N/A
One Freedom and Assistant (since 2007); Associate Counsel,
Valley Drive Secretary Stradley, Ronan, Stevens & Young LLP
Oaks, PA 19456 (2004-2007); Counsel, ING Variable
Age: 53 Annuities (1999-2002).
28 CAUSEWAY INTERNATIONAL VALUE FUND
TRUSTEES AND OFFICERS 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
AGE(1) COMPANY SERVED(2) FIVE YEARS BOARD MEMBER(3) BOARD MEMBER(4)
- ---------------------- ----------------- ----------- ------------------------------------------ --------------- ---------------
Bernadette Sparling(6) Vice President Since 7/08 Corporate Counsel of the N/A N/A
One Freedom and Assistant Administrator (since 2005);
Valley Drive Secretary Associate Counsel, Blank Rome LLP
Oaks, PA 19456 (2001-2005).
Age: 32
- ----------
(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 holds office during the lifetime of the Trust or until his or
her sooner resignation, retirement, removal, death or incapacity in
accordance with the Trust's Declaration of Trust. The president, treasurer
and secretary each holds office at the pleasure of the Board of Trustees or
until he or she sooner resigns in accordance with the Trust's Bylaws.
(3) The "Trust Complex" consists of all registered investment companies for
which Causeway Capital Management LLC serves as investment adviser. As of
September 30, 2009, the Trust Complex consisted of one investment company
with three portfolios -- the International Value Fund, the Emerging Markets
Fund, and the Global Value Fund.
(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) On October 10, 2008, the Trust held a Special Meeting of Shareholders to
consider a proposal to elect three additional trustees to the Trust's Board
of Trustees. The three nominees, Lawry J. Meister, John R. Graham and Mark
D. Cone, were elected to the Board by a plurality of votes of shareholders
of the entire Trust. As a result of the vote, the Trust's Board is
currently comprised of five trustees. Messrs. Gavin, Sussman and Graham and
Ms. Meister are considered Independent Board Members. Mr. Cone is
considered an Interested Board Member because he is an officer of the
Adviser.
(6) These officers of the Trust also serve as officers of one or more mutual
funds for which SEI Investments Company or an affiliate acts as investment
manager, administrator or distributor.
CAUSEWAY INTERNATIONAL VALUE FUND 29
DISCLOSURE OF FUND EXPENSES (Unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including redemption fees, and (2) ongoing costs, including management
fees, shareholder service fees, and other Fund expenses. It is important for you
to understand the impact of these costs on your investment returns.
Ongoing operating expenses are deducted from a mutual fund's gross income and
directly reduce its final investment return. These expenses are expressed as a
percentage of a mutual fund's average net assets; this percentage is known as a
mutual 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 the 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 the Fund's costs in two ways:
ACTUAL FUND RETURN. This section helps you to estimate the actual expenses after
fee waivers that the 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 $1,000 = 8.6), then multiply that ratio by the number
shown under "Expenses Paid During Period."
HYPOTHETICAL 5% RETURN. This section helps you compare the 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 the Fund's comparative cost by comparing the
hypothetical result for the Fund in the "Expenses Paid During Period" column
with those that appear in the same charts in the shareholder reports for other
mutual funds.
NOTE: Because the return is set at 5% for comparison purposes -- NOT the Fund's
actual return -- the account values shown may not apply to your specific
investment.
30 CAUSEWAY INTERNATIONAL VALUE FUND
DISCLOSURE OF FUND EXPENSES (Unaudited)
(CONCLUDED)
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
4/1/09 9/30/09 RATIOS PERIOD*
---------- --------- ---------- --------
CAUSEWAY INTERNATIONAL VALUE FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,541.60 0.99% $6.31
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,020.10 0.99% $5.01
CAUSEWAY INTERNATIONAL VALUE FUND
ACTUAL FUND RETURN
Investor Class $1,000.00 $1,538.40 1.24% $7.89
HYPOTHETICAL 5% RETURN
Investor Class $1,000.00 $1,018.85 1.24% $6.28
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO MULTIPLIED BY THE
AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY 183/365 (TO REFLECT
THE ONE-HALF YEAR PERIOD).
CAUSEWAY INTERNATIONAL VALUE FUND 31
STATEMENT REGARDING BASIS FOR APPROVAL OF INVESTMENT ADVISORY AGREEMENT
(Unaudited)
Section 15(c) of the Investment Company Act of 1940, as amended (the "1940 Act")
requires the Board of Trustees (the "Board") of Causeway Capital Management
Trust (the "Trust") annually to approve the continuance of the investment
advisory agreement (the "Advisory Agreement") between the Trust and Causeway
Capital Management LLC (the "Adviser") with respect to Causeway International
Value Fund (the "Fund"). The continuance of the Advisory Agreement must be
approved by a majority of the Trustees and a majority of the independent
Trustees (i.e., Trustees who are not "interested persons" of the Trust as
defined in the 1940 Act). The Board was comprised of four independent Trustees
and one interested Trustee when the continuation of the Advisory Agreement was
considered.
INFORMATION RECEIVED. At each regular quarterly meeting, the Board reviews a
wide variety of materials relating to the nature, extent and quality of the
Adviser's services, including information concerning the Fund's performance. At
least annually, the Board is provided with additional quantitative and
qualitative information to assist it in evaluating whether to approve the
continuance of the Advisory Agreement. The Board met on August 3, 2009, to
consider whether to approve the continuance of the Advisory Agreement for an
additional one-year period. In connection with the meeting, the Trustees
received and reviewed extensive materials prepared by the Adviser relating to
the Advisory Agreement in response to information requested on the Trustees'
behalf by their independent legal counsel.
FACTORS CONSIDERED. In reviewing the Advisory Agreement, the Trustees considered
a number of factors including, but not limited to: (1) the nature, extent and
quality of the services to be provided by the Adviser, (2) the investment
performance of the Fund, (3) comparisons of the services to be rendered and the
amounts to be paid under the Advisory Agreement with those of other funds and
those of the Adviser under other investment advisory agreements with other
registered investment companies and other types of clients, (4) the costs of the
services to be provided and estimated profits to be realized by the Adviser and
its affiliates from their relationship with the Fund, (5) the extent to which
economies of scale would be realized as the Fund grows and whether fee levels
reflect these economies of scale for the benefit of Fund investors, and (6) any
other benefits derived by the Adviser from its relationship with the Fund.
First, regarding the nature, extent and quality of the services to be provided
by the Adviser, the Trustees considered, among other things, the Adviser's
personnel, experience, track record and compliance program. The Trustees
considered the qualifications, backgrounds and responsibilities of the Adviser's
principal personnel who provided services to the Fund, as well as the level of
attention those individuals provide to the Fund. The Trustees noted the
Adviser's commitment to devoting resources to staffing and technology in support
of its investment management services. They also reviewed the Adviser's
investment philosophy and processes and its compliance program, and considered
the scope of the Adviser's services. The Trustees concluded that the nature,
extent and quality of the services provided by the Adviser have benefited and
will continue to benefit the Fund and its shareholders.
32 CAUSEWAY INTERNATIONAL VALUE FUND
STATEMENT REGARDING BASIS FOR APPROVAL OF INVESTMENT ADVISORY AGREEMENT
(unaudited) (continued)
Second, regarding the investment performance of the Fund, the Trustees reviewed
the investment results of the Fund's Institutional and Investor share classes
for the quarter-to-date, year-to-date, one-year, three-year, five-year and since
inception (10/26/01) periods ended June 30, 2009, compared to the MSCI EAFE(R)
Index (the "Index"), the mutual funds included in the Morningstar U.S. Open End
Foreign Large Value category of funds, and a peer group of nineteen
international equity funds (including the Fund) used by the Board to track
performance during the year. The Trustees noted that the Fund had satisfactorily
achieved its goal of long-term growth of capital and income for the period since
its inception and had outperformed the Index for the one-year and since
inception periods. They considered that the Fund's comparative underperformance
for other short-term periods was attributable primarily to the challenges of the
recent global financial crisis, certain market, sector and country
underweightings for certain periods, and the Fund's smaller portfolio allocation
to emerging markets securities than comparable funds. Under the circumstances,
the Trustees concluded that the Adviser's record in managing the Fund indicates
that its continued management will benefit the Fund and its shareholders.
Third, the Trustees compared the Fund's advisory fee and total expenses with
those of other similar mutual funds. They noted that the Fund's advisory fee was
the same as the average and median advisory fees charged by funds in the
Morningstar U.S. Open End Foreign Large Value category, and its expense ratios
were well below the average and median of the funds in that Morningstar
category. The Trustees also compared the Fund's advisory fee with those paid by
the Adviser's separate account and subadvised mutual fund clients in strategies
comparable to the Fund. The Trustees noted that, although these fees were
somewhat lower than those paid by the Fund, the differences appropriately
reflected the Adviser's significantly greater responsibilities with respect to
the Fund, which include the provision of many additional administrative and
shareholder services (such as services related to the Fund's disclosure
documents, financial statements, 1940 Act compliance policies and procedures,
preparation of Board and committee materials and meetings, annual Board reports
and certifications, oversight of daily valuation, regulatory examinations and
legal and compliance matters, oversight of Fund service providers, negotiation
of Fund intermediary agreements, coordination with Fund intermediaries providing
shareholder recordkeeping services, shareholder communications, and due
diligence for advisers, consultants and institutional investors). The Trustees
concluded that the Fund's advisory fee and expense ratio were reasonable and
appropriate under the circumstances.
Fourth, the Trustees considered the estimated profits realized by the Adviser
from its relationship with the Fund. They reviewed the Adviser's estimated after
tax profit margin with respect to such services and the methodology used to
generate that estimate, and noted that the cost allocation methodology presented
to the Trustees was reasonable. They noted that the Adviser's estimated profit
margin and estimated net income
CAUSEWAY INTERNATIONAL VALUE FUND 33
STATEMENT REGARDING BASIS FOR APPROVAL OF INVESTMENT ADVISORY AGREEMENT
(unaudited) (concluded)
decreased from the prior year, primarily due to decreased Fund assets. They also
observed that the Adviser's estimated profitability was within the range cited
as reasonable in various court decisions. After consideration of these matters,
the Trustees concluded that the Adviser's operating margin with respect to its
relationship with the Fund was reasonable.
Fifth, regarding economies of scale, the Trustees observed that, although the
Fund's advisory fee schedule did not contain fee breakpoints, it was difficult
to determine the existence or extent of any economies of scale. They noted that
the Adviser was sharing economies of scale by charging a low fee initially and
by devoting additional resources to technology in order to focus on and enhance
continued performance and service to the Fund's shareholders, that the Adviser
had instituted and consistently maintained expense limit agreements, requiring
fee waivers and reimbursements in the past, and that the overall level of the
advisory fees paid by the Fund was reasonable. The Trustees concluded that under
the circumstances the Adviser was sharing any economies of scale with the Fund
appropriately, and they would continue to monitor the appropriateness of fee
breakpoints in the future.
Sixth, regarding any other benefits derived by the Adviser from its relationship
with the Fund - often called "fall-out" benefits - the Trustees observed that
the Adviser does not earn common "fall-out" benefits such as affiliated custody
fees, affiliated transfer agency fees, affiliated brokerage commissions, profits
from rule 12b-1 fees, "contingent deferred sales commissions" or "float"
benefits on short-term cash. The Trustees concluded that the primary "fall-out"
benefit received by the Adviser was research services provided by brokers used
by the Fund and that this benefit was reasonable in relation to the value of the
services that the Adviser provides to the Fund.
APPROVAL. At the August 3, 2009 meeting, the Trustees discussed the information
and factors noted above and considered the approval of the Advisory Agreement
with representatives of the Adviser. The Independent Trustees also met in a
private session with independent counsel at which no representatives of the
Adviser were present. In their deliberations, the independent Trustees did not
identify any particular information or factor that was determinative or
controlling, and the foregoing summary does not detail all the matters
considered. Based on their review, the Trustees (including the independent
Trustees) unanimously concluded that the Advisory Agreement is fair and
reasonable to the Fund and its shareholders, the Fund's advisory fees are
reasonable and renewal of the Advisory Agreement is in the best interests of the
Fund and its shareholders, and the Board of Trustees approved the renewal of the
Advisory Agreement for a twelve-month period beginning September 20, 2009.
34 CAUSEWAY INTERNATIONAL VALUE FUND
INVESTMENT ADVISER:
Causeway Capital Management LLC
11111 Santa Monica Boulevard
15th Floor
Los Angeles, CA 90025
DISTRIBUTOR:
SEI Investments Distribution Co.
One Freedom Valley Drive
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.
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("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 are 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 the Trust voted proxies relating to portfolio securities during
the most recent 12-month period ended June 30, 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-001-0800
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. During the fiscal year ended September 30, 2009, there were
no material changes or waivers to the code of ethics.
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. 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 the fiscal years ended September 30,
2009 and 2008 were as follows:
2009 2008
-------- --------
(a) Audit Fees $105,700 $116,700
(b) Audit-Related None None
Fees
(c) Tax Fees(1) $ 22,200 $ 22,200
(d) All Other None None
Fees
Note:
(1) Tax fees include amounts related to tax return and excise tax calculation
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 paragraphs (b) through (d) of this Item were
approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01
of Regulation S-X.
(f) Not applicable.
(g) For the fiscal year ended September 30, 2009, the aggregate non-audit fees
billed by the registrant's accountant for services rendered to the registrant
and the registrant's investment adviser were $22,200 and $209,114, respectively.
For the fiscal year ended September 30, 2008, the aggregate non-audit fees
billed by the
registrant's accountant for services rendered to the registrant and the
registrant's investment adviser were $22,200 and $209,751, respectively.
(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 pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X was compatible with maintaining the principal
accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end management investment companies.
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 INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to open-end management investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The registrant's procedures by which shareholders may recommend nominees to
the registrant's board of trustees are as follows: The board of trustees of the
registrant has a nominating committee comprised of all of the trustees who are
not interested persons of the registrant as defined by Section 2(a)(19) of the
Investment Company Act of 1940 (the "Independent Trustees"). The purpose of the
nominating committee is to nominate persons to serve as Independent Trustees, as
needed. According to the registrant's bylaws, any shareholder of the registrant
may submit names of individuals to be considered by the nominating committee or
the board of trustees, as applicable, provided, however, (i) that such person
was a shareholder of record at the time of submission of such names and is
entitled to vote at the meeting, and (ii) that the nominating committee or the
board of trustees, as applicable, shall make the final determination of persons
to be nominated. There have been no material changes to these procedures since
the registrant's last filing on Form N-CSR.
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 second fiscal quarter of the
period covered by this report 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.
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: December 1, 2009
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: December 1, 2009
By (Signature and Title)* /s/ Michael Lawson
--------------------------------------
Michael Lawson, Treasurer
Date: December 1, 2009
* Print the name and title of each signing officer under his or her
signature.