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Brandes Investment Trust (BVNSC)

Filed: 28 Nov 18, 3:59pm
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-CSR

 

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-08614

 

 

Brandes Investment Trust

(Exact name of registrant as specified in charter)

 

 

11988 El Camino Real, Suite 600

San Diego, CA 92130

(Address of principal executive offices) (Zip code)

 

 

Michael Glazer

Morgan, Lewis & Bockius LLP

355 South Grand Ave., Suite 4400

Los Angeles, CA 90071-3106

(Name and address of agent for service)

800-331-2979

Registrant’s telephone number, including area code

Date of fiscal year end: September 30, 2018

Date of reporting period: September 30, 2018

 

 

 


Table of Contents

Item 1. Reports to Stockholders.

 


Table of Contents

LOGO

ANNUAL REPORT INTERNATIONAL EQUITY FUND GLOBAL EQUITY FUND GLOBAL EQUITY INCOME FUND GLOBAL OPPORTUNITIES VALUE FUND EMERGING MARKETS VALUE FUND INTERNATIONAL SMALL CAP EQUITY FUND SMALL CAP VALUE FUND CORE PLUS FIXED INCOME FUND For the year ended September 30, 2018 Brandes Investments trust


Table of Contents

LOGO

Table of Contents

 

 

Letter to Shareholders and Performance Graphs

   2 

Brandes International Equity Fund

   2 

Brandes Global Equity Fund

   9 

Brandes Global Equity Income Fund

   16 

Brandes Global Opportunities Value Fund

   24 

Brandes Emerging Markets Value Fund

   30 

Brandes International Small Cap Equity Fund

   38 

Brandes Small Cap Value Fund

   46 

Brandes Core Plus Fixed Income Fund

   52 

Expense Example

   60 

Schedule of Investments

   64 

Brandes International Equity Fund

   64 

Brandes Global Equity Fund

   67 

Brandes Global Equity Income Fund

   70 

Brandes Global Opportunities Value Fund

   73 

Brandes Emerging Markets Value Fund

   77 

Brandes International Small Cap Equity Fund

   83 

Brandes Small Cap Value Fund

   88 

Brandes Core Plus Fixed Income Fund

   92 

Statements of Assets and Liabilities

   98 

Statements of Operations

   100 

Statements of Changes in Net Assets

   102 

Financial Highlights

   106 

Notes to Financial Statements

   118 

Report of Independent Registered Public Accounting Firm

   142 

Additional Information

   144 

Trustees and Officers Information

   148 

 

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Brandes International Equity Fund

 

Dear Fellow Investor,

The net asset value per share of the Brandes International Equity Fund (Class I Shares) advanced 3.23% in the year ending September 30, 2018. For the same period, the MSCI EAFE Index gained 2.74%.

Share price advances among our energy holdings, including Russia-based Surgutneftegas and Lukoil, as well as Brazil’s Petrobras, aided returns in the period. These companies saw enhanced operating results in a higher oil-price environment. Additionally, Petrobras had a legal settlement that came in below market expectations. The market also welcomed the news that the Brazilian government made good on its promise to cover the losses resulting from diesel price controls and has made two cash payments to Petrobras.

Among the fund’s holdings in pharmaceuticals, the market reacted favorably to Taisho Pharmaceutical’s improved earnings and became more optimistic about Daiichi Sankyo’s drug pipeline. Additionally, Daiichi improved its operational results and continued to return excess capital to shareholders, which boosted its shares.

Share price advances for Japanese pharmaceutical Astellas also added to results. Founded in 2005 through the merger of Yamanouchi Pharmaceutical and Fujisawa Pharmaceutical, Astellas is one of Japan’s largest pharmaceutical companies. Our familiarity with Astellas dates back well over a decade, as our analyst had covered both Yamanouchi and Fujisawa before they merged. We have also owned Astellas at different times in the past 10 years when we felt that the market was providing an attractive discount to our intrinsic value estimate.

Most recently, we initiated a position in 2017 after the share price declined. Government-mandated price cuts and increased generic competition led to a tough environment for pharmaceutical firms in Japan. For Astellas, the upcoming patent expiration of two of its drugs in the United States, which accounted for about 10% of sales, presented an additional challenge.

Our analysis showed that the market appeared to give very little credit to the company’s research and development (R&D) as the stock was trading near the value of its currently marketed products. We appreciated that Astellas maintained a strong balance sheet and had a good history of returning cash to shareholders through increasing dividend payments and share buybacks. We also believed there was upside potential as the company worked on operational efficiency and improved its R&D pipeline. Moreover, it was our view that the growth in Astellas’ U.S. products would likely offset the impact of the patent expiration.

Market optimism has recently returned following the company’s strong growth in the United States and increasingly positive development in its pipeline. In the year, the shares appreciated toward our estimate of their intrinsic value and we divested our position.

 

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Brandes International Equity Fund

 

Food and staples retailers helped returns over the period with Tesco’s share price rising on the back of improved sales growth and earnings. Meanwhile, J Sainsbury saw its stock appreciate after announcing its intention to merge with its competitor, Asda, which would result in the largest grocery store in the United Kingdom. Overall, UK grocers owned in the fund have improved their operations to better compete with discount format grocers.

On a regional basis, holdings in Japan, Russia and the United Kingdom contributed to performance. In addition to Japanese pharmaceutical businesses, other contributors in Japan included automaker Honda Motor and Sumitomo Mitsui Trust (Financials).

While British food retailer’s performance was strong U.K.-based oil firm BP also saw its share prices increase after announcing a stock-buyback program.

Areas of underperformance in the fund included holdings in France, Mexico and Italy.

France-based Publicis Group, saw its share price fall on industry-wide concerns around slowing growth. Trading at less than 12x forward earnings at the end of September, Publicis remains an attractive investment opportunity for us.

Mexican real estate investment trusts Fibra Uno (FUNO) and cement producer Cemex also dragged on performance.

In late September, FUNO received approval for a shelf registration (i.e., a method for companies to register public offerings without having to sell them immediately), which allows the company to issue up to 1.5 billion shares and Mex$ 55 billion of debt within a five-year period. FUNO initiated an equity offering shortly thereafter. Even though company management acknowledges that issuing equity at the current share price is dilutive, it feels that the prevailing market environment warrants a buildup of cash, which can be used to finance large-scale real estate projects and to be reserved in anticipation of market disruptions (e.g., from the Mexican national election in 2018 and other events). Although we believed there were other preferred methods to raise capital and we voted against the shelf registration, we participated in the offering to add to our allocation as the company continued to be undervalued based on our analysis.

Diversified Telecommunication Services, Media and stock specific declines among Diversified Financial Services also detracted from returns.

Telecom Italia under-performed amid a difficult domestic competitive environment and weaker-than-expected earnings. Additionally, concerns about the fiscal discipline of the new Italian government weighed on Italian stocks, including that of Telecom Italia. While our telecom holdings have experienced challenging performance this year, they trade at what we consider very low multiples (as of September 30) and represent appealing investment opportunities with high margins of safety.

 

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Brandes International Equity Fund

 

Among media businesses held in the fund, WPP’s share price fell after the company lowered its sales growth guidance as a result of advertising budget cuts at consumer goods companies, which make up a meaningful portion of WPP’s client base. Fast-changing technology and migration to online advertising have also put pressure on WPP’s shares.

Ad agencies, including WPP, had previously been regarded as high-growth companies. However, given spending pressure and business model changes within the industry, the market has begun to anticipate lower growth potential. While we agree with this expectation, we believe the market has overreacted, especially as it relates to WPP. Trading at less than 10x forward earnings at quarter ending September 30, 2018, WPP shares offer an attractive risk/reward tradeoff in our opinion.

At the close of the period, the fund’s largest country weights were in the United Kingdom and France, and the fund’s largest industry weights were in Pharmaceuticals and Oil, Gas & Consumable Fuels. Please note that while macro conditions are considered when we determine valuation estimates for individual companies, our country and industry weightings are a by-product of bottom-up stock selection, not the result of top-down observations.

Over the year, we have trimmed our allocation to the energy sector. A number of our energy holdings have seen strong performance, resulting in lower margins of safety compared to a year or two ago, when we held nearly triple the benchmark weight to oil & gas companies.

Despite our reduced exposure, the energy sector continued to represent an overweight in the fund. Several of our holdings have enhanced their cost management and, as a result, enjoyed improved free-cash-flow generation. However, the positive development seems to be somewhat unappreciated by the market, leading us to believe there remains upside potential to these positions.

In the 40-plus years since Brandes Investment Partners was founded, our goal has remained the same: pursue above-market gains to help you move closer to your long-term investment objectives. We believe that our unwavering commitment to value investing will lead us to attractively priced, fundamentally sound companies worthy of inclusion in the fund.

Thank you for your business and continued trust.

Sincerely yours,

The Brandes International Large-Cap Investment Committee

Brandes Investment Trust

Because the values of the fund’s investments will fluctuate with market conditions, so will the value of your investment in the fund. You could lose money on your investment in the fund, or the fund could underperform other investments. The values of the fund’s investments fluctuate in response to the activities of individual companies and general stock market

 

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Brandes International Equity Fund

 

and economic conditions. In addition, the performance of foreign securities depends on the political and economic environments and other overall economic conditions in the countries where the fund invests. Emerging country markets involve greater risk and volatility than more developed markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these currencies have experienced, and may experience in the future, substantial fluctuations or a steady devaluation relative to the U.S. dollar. Value stocks typically are less volatile than growth stocks; however, issues of value stocks typically have a lower expected growth rate in earnings and sales than issues of growth stocks.

Past performance is not a guarantee of future results.

Forward Earnings:  Sell-side analysts’ consensus earnings estimates for the next fiscal year.

Free Cash Flow:  Total cash flow from operations less capital expenditures.

Margin of Safety:  The discount of a security’s market price to what the firm believes is the intrinsic value of that security.

Multiple:  A generic term for a class of many different indicators that can be used to value a stock. A multiple is simply a ratio that is calculated by dividing the market or estimated value of an asset by a specific item on the financial statement or other measure.

The declaration and payment of shareholder dividends are solely at the discretion of the issuer and are subject to change at any time.

Please refer to the Schedule of Investments in the report for complete holdings information. Fund holdings, geographic allocations and/or sector allocations are subject to change at any time and are not considered a recommendation to buy or sell any security.

The foregoing reflects the thoughts and opinions of Brandes Investment Partners® exclusively and is subject to change without notice.

Brandes Investment Partners® is a registered trademark of Brandes Investment Partners, L.P. in the United States and Canada.

Must be preceded or accompanied by a prospectus.

Index Guide

The MSCI EAFE Index with net dividends captures large and mid cap representation of developed market countries excluding the U.S. and Canada.

MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products.

 

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Brandes International Equity Fund

 

One cannot invest directly in an index.

The Brandes International Equity Fund is distributed by ALPS Distributors, Inc.

 

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Brandes International Equity Fund

 

The following chart compares the value of a hypothetical $100,000 investment in the Brandes International Equity Fund – Class I from September 30, 2008 to September 30, 2018 with the value of such an investment in the MSCI EAFE (Europe, Australasia and Far East) Index for the same period.

Value of $100,000 Investment vs MSCI EAFE (Europe, Australasia and Far East) Index (Unaudited)

 

LOGO

 

   Average Annual Total Return
Periods Ended September 30, 2018
 
   One
Year
  Five
Years
  Ten
Years
  Since
Inception(1)
 

Brandes International Equity Fund

     

Class A*

   3.02  4.31  4.03  7.75

Class A* (with maximum sales charge)

   -2.93  3.08  3.42  7.46

Class C*

   2.31  3.53  3.22  6.94

Class C* (with maximum sales charge)

   1.31  3.53  3.22  6.94

Class I

   3.23  4.51  4.22  7.99

Class R6*

   3.44  4.63  4.31  8.06

MSCI EAFE (Europe, Australasia, and Far East) Index

   2.74  4.42  5.38  4.83

 

(1) 

The inception date is January 2, 1997.

 

*

Performance shown prior to January 31, 2011 for Class A shares reflects the performance of Class I shares adjusted to reflect Class A expenses. Performance shown prior to January 31, 2013 for Class C shares reflects the performance of Class I shares adjusted to reflect Class C expenses. Performance shown prior to February 1, 2016 for Class R6 shares reflects the performance of Class I shares adjusted to reflect Class R6 expenses.

Performance data quoted represents past performance; past performance does not indicate future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or

 

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Brandes International Equity Fund

 

less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-331-2979.

The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Advisor has a fee waiver arrangement in place to limit the Fund’s annual operating expenses.

Sector Allocation as a Percentage of Total Investments as of

September 30, 2018 (Unaudited)

 

LOGO

The sector classifications represented in the graph above are in accordance with Global Industry Classification Standard (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC.

 

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Brandes Global Equity Fund

 

Dear Fellow Investor,

The net asset value per share of the Brandes Global Equity Fund (Class I Shares) increased 4.95% in the year ending September 30, 2018. For the same period, the MSCI World Index rose 11.24%.

Consumer holdings in the United Kingdom and France detracted the most from returns. Notable detractors included U.K.-based tobacco company Imperial Brands and retailer Marks & Spencer, as well as ad agencies WPP (United Kingdom) and Publicis Groupe (France).

WPP’s share price fell after it lowered sales growth guidance as a result of advertising budget cuts at consumer goods companies, which make up a meaningful portion of WPP’s client base. Fast-changing technology and migration to online advertising have also put pressure on WPP’s shares.

Ad agencies, including WPP, had previously been regarded as growth companies with fairly stable free cash flows. However, given spending pressure and business model changes within the industry, the market has begun to anticipate slower growth. While we agree with this expectation, we believe the market has overreacted, especially as it relates to WPP. Trading at less than 10x forward earnings at the end of September 2018, WPP shares offer an attractive risk/reward tradeoff, in our opinion.

A significant headwind to the fund’s relative performance was the continued strong performance of high-growth technology stocks. The top five contributors to the MSCI World Index’s 2018 year-to-date return were all technology companies (Amazon, Apple, Microsoft, Netflix and Facebook). Without the contribution from these companies, the index would have declined for the year.

Interestingly, these five U.S. technology companies now have a combined market capitalization of over $3 trillion. This figure is larger than the gross domestic product (GDP) of almost any country, with the exception of the United States and China, and is close to the GDP of Japan and Germany. While we believe these companies are attractive businesses that have been performing very well, it seems that their share prices have already captured much of the optimism about their prospects. Among the five companies, we only own a position in Microsoft as we think it offers a more appealing valuation than its peers. Even so, our allocation (as of September 30, 2018) was lower than the MSCI World Index’s significant weight to the company, which resulted from its capitalization-weighted construction.

Other drivers of underperformance included our allocation to emerging markets. Geopolitical turmoil, currency pressure and fears of economic slowdown due to trade wars and rising U.S interest rates hit emerging markets stocks over the period. While many investors have fled the asset class, we remain convinced that the region is home to many undervalued companies based on our long-term oriented analysis.

 

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Brandes Global Equity Fund

 

A question we were often asked this year was how the U.S. trade negotiations and potential for new tariffs have impacted our portfolios. In this regard, we have been closely monitoring the situation and have revisited the valuations of all holdings that can potentially be affected by President Trump’s steel and aluminum tariffs, either directly (e.g., steelmakers) or indirectly (e.g., auto companies). While the situation has garnered headlines and increased market volatility, we concluded that no material adjustments to our intrinsic value estimates were necessary at this point.

Notable positive contributors for the year ended September 30 included several health care holdings, led by pharmaceutical firms Daiichi Sankyo, Pfizer, GlaxoSmithKline and Merck, as well as hospital operator HCA Healthcare and pharmacy benefit manager Express Scripts.

We also saw positive contributions from several U.K. holdings, most notably BP, Tesco and J Sainsbury, as well as holdings in the United States, Russia and Japan. Despite the positive contribution, the United States remained our largest relative underweight position, with nearly a 30% weight difference.

In the period, the investment committee took advantage of heightened volatility to increase allocations to names such as Imperial Brands, Sanofi and Merck.

We have followed Imperial Brands (formerly Imperial Tobacco) for a long time, having owned shares at various points over the last couple of decades. The company has recently struggled with sluggish organic growth, weaker positioning in reduced-risk tobacco products compared to its peers, and increased industry regulation. Part of the growth challenge has resulted from increased pricing competition in some end markets. Additionally, Imperial Brands has been trying to refocus its business by refining its product portfolio, which should help the company enhance profitability and lower its cost base.

The market does not seem to be giving the company any credit for potential improvements in its cost structure or its investments in next-generation tobacco products. Along with its peers, Imperial Brands continues to benefit from the low price elasticity of tobacco products, which allows producers to modestly increase prices without a commensurate decline in sales volume. This has led to what we consider attractive returns on capital and free cash flow.

During the first quarter, we added to our position as the stock continued to decline and significantly underperformed the MSCI World Index. At less than 10x price/forward earnings as of March 31, Imperial Brand shares traded at its lowest multiple since the 2008 financial crisis, representing what we consider an appealing value opportunity.

We also initiated a new position in Malaysia-based Genting Berhad (Genting) in the third quarter. Operating primarily in Singapore, Malaysia and Indonesia, Genting is an investment holding company with a range of business segments including leisure and hospitality, plantation agriculture, power, property, genomic

 

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and life sciences research, as well as oil and gas. Genting was established in 1965 and the late founder’s family still owns a significant portion of the company.

Genting is generally not involved in the day-to-day operations of its subsidiaries. With the exception of its energy arm, Genting’s subsidiaries are publicly listed and have their own managements and boards of directors.

We were attracted to Genting for a number of reasons:

 

  

An investment in Genting offers indirect ownership in what we consider attractive assets in its subsidiaries (i.e., Genting Singapore, Genting Malaysia and Genting Plantations) at a discount to both the market-implied values and our intrinsic value estimates.

 

  

Genting maintains a conservative balance sheet, with potential cash-flow growth upon completion of several projects in its pipeline.

 

  

Genting shares exhibited an attractive valuation based on its price/book, which was near a 25-year low at the time of our purchase.

While the company operates in certain markets and industries that have historically exhibited above-average volatility, after thoroughly reviewing the pros and cons we believe Genting’s upside potential outweighs its risks, leading to our purchase decision.

At the close of the period, the fund’s largest country weights were in the United States and the United Kingdom, and the largest industry weights were in Oil, Gas & Consumable Fuels and Pharmaceuticals. Please note that while macro conditions are considered when we determine valuation estimates for individual companies, our country and industry weightings are a by-product of bottom-up stock selection, not the result of top-down observations.

Over the past year, the performance difference between the U.S. market and international markets has been considerable, with the S&P 500 Index up significantly while international indices, such as the MSCI EAFE Index and the MSCI Emerging Markets Index, have largely lagged behind, reflecting the longest stretch of U.S. market outperformance versus international markets (MSCI EAFE) on record, at over 10 years as of September 30.

In addition to compelling valuation multiples, we find the potential corporate-earnings improvement in international markets attractive. Consider that while U.S. corporate earnings have recovered and are significantly higher than the levels seen immediately prior to the financial crisis, many international economies have yet to see corporate earnings recover to pre-crisis levels. We believe this disparity indicates many non-U.S. companies still have potential for improvement and are not trading at all-time high multiples compared with U.S. companies. In our opinion, investors might be better off buying assets trading at low multiples on depressed or below-historical earnings — as opposed to purchasing assets trading at high multiples on earnings at unprecedented levels.

 

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Brandes Global Equity Fund

 

While we will not venture to forecast whether this trend will reverse, we know that historically markets have gone through cycles many times. Importantly, from a long-term investor’s standpoint, international markets today are trading at some of the largest valuation discounts relative to the U.S. market in nearly two decades.

Amid the constant stream of macroeconomic and geopolitical news, Brandes continues to pursue attractive businesses with stock prices below our estimates of their intrinsic value. We believe uncertainties help drive prices of fundamentally sound companies below what they are truly worth.

Looking ahead, we believe the current positioning of the Brandes Global Equity Fund bodes well for the long-term.

Thank you for your business and continued trust.

Sincerely yours,

The Brandes Global Large-Cap Investment Committee

Brandes Investment Trust

Because the values of the fund’s investments will fluctuate with market conditions, so will the value of your investment in the fund. You could lose money on your investment in the fund, or the fund could underperform other investments. The values of the fund’s investments fluctuate in response to the activities of individual companies and general stock market and economic conditions. In addition, the performance of foreign securities depends on the political and economic environments and other overall economic conditions in the countries where the fund invests. Emerging country markets involve greater risk and volatility than more developed markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these currencies have experienced, and may experience in the future, substantial fluctuations or a steady devaluation relative to the U.S. dollar. Value stocks typically are less volatile than growth stocks; however, issues of value stocks typically have a lower expected growth rate in earnings and sales than issues of growth stocks.

Past performance is not a guarantee of future results.

Forward Price/Earnings:  Price per share divided by earnings per share expected over the next 12 months.

Free Cash Flow:  Total cash flow from operations less capital expenditures.

Multiple:  A generic term for a class of many different indicators that can be used to value a stock. A multiple is simply a ratio that is calculated by dividing the market or estimated value of an asset by a specific item on the financial statement or other measure.

Price/Book:  Price per share divided by earnings per share.

 

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Brandes Global Equity Fund

 

Please refer to the Schedule of Investments in the report for complete holdings information. Fund holdings, geographic allocations and/or sector allocations are subject to change at any time and are not considered a recommendation to buy or sell any security.

The foregoing reflects the thoughts and opinions of Brandes Investment Partners® exclusively and is subject to change without notice.

Brandes Investment Partners® is a registered trademark of Brandes Investment Partners, L.P. in the United States and Canada.

Must be preceded or accompanied by a prospectus.

Index Guide

The MSCI World Index with net dividends captures large and mid cap representation of developed markets.

The MSCI EAFE Index with net dividends captures large and mid cap representation of developed market countries excluding the U.S. and Canada.

The MSCI Emerging Markets Index with net dividends captures large and mid cap representation of emerging market countries.

The S&P 500 Index with gross dividends measures equity performance of 500 of the top companies in leading industries of the U.S. economy.

MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products.

One cannot invest directly in an index.

The Brandes Global Equity Fund is distributed by ALPS Distributors, Inc.

 

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Brandes Global Equity Fund

 

The following chart compares the value of a hypothetical $100,000 investment in the Brandes Global Equity Fund – Class I from its inception (October 6, 2008) to September 30, 2018 with the value of such an investment in the MSCI World Index for the same period.

Value of $100,000 Investment vs MSCI World Index (Unaudited)

 

LOGO

 

   Average Annual Total Return
Periods Ended September 30, 2018
 
   One
Year
  Three
Years
  Five
Years
  Since
Inception(1)
 

Brandes Global Equity Fund

     

Class A*

   4.68  8.81  5.71  7.21

Class A* (with maximum sales charge)

   -1.34  6.69  4.47  6.58

Class C*

   3.88  7.98  4.93  6.39

Class C* (with maximum sales charge)

   2.88  7.98  4.93  6.39

Class I

   4.95  9.08  5.98  7.45

MSCI World Index

   11.24  13.54  9.28  9.63

 

(1) 

The inception date is October 6, 2008.

 

*

Performance shown prior to January 31, 2011 for Class A shares reflects the performance of Class I shares adjusted to reflect Class A expenses. Performance shown prior to January 31, 2013 for Class C shares reflects the performance of Class I shares adjusted to reflect Class C expenses.

Performance data quoted represents past performance; past performance does not indicate future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-331-2979.

 

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Brandes Global Equity Fund

 

The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Advisor has a fee waiver arrangement in place to limit the Fund’s annual operating expenses.

Sector Allocation as a Percentage of Total Investments as of

September 30, 2018 (Unaudited)

 

LOGO

The sector classifications represented in the graph above are in accordance with Global Industry Classification Standard (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC.

 

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Brandes Global Equity Income Fund

 

Dear Fellow Investor,

The net asset value per share of the Brandes Global Equity Income Fund (Class I Shares) gained 3.33% for the year ending September 30, 2018. For the same period, the MSCI World Index increased 11.24%.

Major detractors included emerging market holdings, led by Brazilian electric company Companhia Paranaense de Energia (COPEL), telecommunications firm Telefonica Brasil and Mexico-based commercial real estate investment trust Fibra Uno (FUNO).

In late September, FUNO received approval for a shelf registration, which allows the company to issue up to 1.5 billion shares and Mex$ 55 billion of debt within a five-year period. FUNO initiated an equity offering shortly thereafter. Even though company management acknowledges that issuing equity at the current share price is dilutive, it feels that the prevailing market environment warrants a buildup of cash, which can be used to finance large-scale real estate projects and to be reserved in anticipation of market disruptions (e.g., from the Mexican national election in 2018 and other events). Although we believed there were other preferred methods to raise capital and we voted against the shelf registration, we participated in the offering to add to our allocation as the company continued to be undervalued based on our analysis.

A number of our U.K.-domiciled consumer holdings also weighed on returns, including retailers Kingfisher and Marks & Spencer as well as tobacco company Imperial Brands.

We have followed Imperial Brands (formerly Imperial Tobacco) for a long time, having owned the shares at various points over the last few decades. The company has recently struggled with sluggish organic growth, weaker positioning in reduced-risk tobacco products compared to its peers and increased industry regulation. Part of the company’s growth challenge has resulted from increased pricing competition in some of its end markets. Additionally, Imperial Brands has been trying to refocus its business through a refined product portfolio consisting of its stronger brands, which should help the company enhance its profitability and lower its cost base.

The market does not seem to be giving the company any credit for potential improvements in its cost structure or for its investments in next-generation tobacco products. Along with its peers, Imperial Brands continues to benefit from the low price elasticity of tobacco products, which allows producers to increase prices without a proportionate decline in sales volume. This has led to what we consider to be attractive returns on capital and free-cash-flow generation.

During the period, we added to our position in the company as the stock significantly underperformed the MSCI Europe Index. Earlier in 2018, Imperial Brand stock was trading at its lowest multiple of forward earnings since the 2008 financial crisis, representing what we consider an appealing value opportunity.

 

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Brandes Global Equity Income Fund

 

Advertising agencies Publicis Group (France) and WPP (United Kingdom) hurt performance, as their share prices fell along with those of other global ad agencies due to concerns over slowing industry growth.

WPP’s share price fell after it lowered sales growth guidance as a result of advertising budget cuts at consumer goods companies, which make up a meaningful portion of WPP’s client base. Fast-changing technology and migration to online advertising have also put pressure on WPP’s share price.

Ad agencies, including WPP, had previously been regarded as growth companies with fairly predictable free cash flow. However, given spending pressure and business model changes within the industry, the market has begun to anticipate slower growth. While we agree with this expectation, we believe the market has overreacted, especially as it relates to WPP. Trading at less than 8x forward earnings as of September 30, 2018, WPP stock offers an attractive risk/reward tradeoff, in our opinion.

Several pharmaceutical company holdings boosted returns, including U.S.-based Pfizer, Merck, and Johnson & Johnson, as well as UK’s GlaxoSmithKline and Japan’s Daiichi Sankyo.

Portfolio holdings in the Oil, Gas & Consumable Fuels and Food & Staples Retailing industries were contributors to performance, as well as certain holdings in the United States, the United Kingdom and Japan. Some of the largest individual contributors to performance were Microsoft Corp. (United States – Software), BP (United Kingdom – Oil, Gas & Consumable Fuels), J Sainsbury (United Kingdom – Food & Staples Retailing) and previously mentioned pharmaceutical companies: Daiichi Sankyo (Japan) and Pfizer (United States).

Over the period, the Global Large-Cap Investment Committee purchased shares of U.S.-based financial firm Citigroup, which we believe is an undervalued bank, currently trading at a slight premium to its tangible book value.

Since the financial crisis, Citigroup has built a strong capital position and should benefit as U.S. interest rates continue to rise. Due to its strong capital position, Citigroup has increased its shareholder payout through share-buybacks and dividends over the past several years. During the second quarter, the company announced plans to return $22 billion of capital to shareholders (including a 40% dividend increase), resulting in a projected increase in its dividend yield from 1.9% (trailing 12-month as of June 30) to 2.6%. This amounts to more than a 12% total shareholder yield based on current prices. We think this capital return and potential earnings improvement make Citigroup an attractive investment, especially when combined with the fact that the company’s shares trade at attractive multiples of book value and forward earnings.

For the year ending September 30, the Investment Committee exited its positions in Japanese pharmaceutical company Daiichi Sankyo (div. yield: 1.7%), Chilean

 

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electric utility Enel Chile (div. yield: 5.1%) and U.K.-based Burberry (div. yield: 2.0%) as they reached our estimate of intrinsic value.

Daiichi Sankyo was established in 2005 through a merger between Daiichi Pharmaceutical Company and Sankyo Company. A variety of company-specific issues pressured Daiichi Sankyo’s shares over the last several years, including:

 

  

Its problematic acquisition of Indian generic pharmaceutical firm Ranbaxy in 2008, which we deemed overpriced and poorly timed

 

  

Market concerns about its research and development (R&D) pipeline

 

  

Weak growth in its domestic market

While these concerns were valid, we believed they had been more than accounted for in Daiichi Sankyo’s share price. Our analysis showed that the market did not give enough credit for Daiichi Sankyo’s R&D pipeline and the potential upside that may occur if the company could improve its bloated cost structure to bring its margins more in line with those of its peers.

We were also attracted to Daiichi Sankyo’s young product portfolio, global exposure, its strong balance sheet, as well as its cash generation. Our investment thesis involved a turnaround story that we knew would likely take some time, but we believed the stock offered an attractive risk/reward tradeoff for a patient investor.

During our holding period, India-based Sun Pharma acquired Ranbaxy from Daiichi Sankyo in an all-stock transaction. Daiichi Sankyo divested its stake in Sun Pharma in 2016, allowing it to better focus on its core business. Subsequently, the company started to enhance its margins, return excess capital to shareholders and see improved R&D pipeline results.

Over the last year, the market has begun to appreciate the company’s turnaround and now seems exceedingly optimistic about Daiichi Sankyo’s R&D pipeline, in our opinion. We divested our position as the share price reached our estimate of intrinsic value.

At the close of the period, the fund’s largest country weights were in the United States and the United Kingdom. Interestingly, our 31% U.S. allocation also represented the fund’s largest underweight compared to the MSCI World Index’s almost 62% weight as of September 30.

Over the past year, performance difference between the U.S. market and international markets has been considerable, with the S&P 500 Index up significantly while international indices, such as the MSCI EAFE Index and the MSCI Emerging Markets Index, have largely lagged behind, reflecting the longest stretch of U.S. market outperformance versus international markets (MSCI EAFE) on record, at over 10 years as of September 30.

While we will not venture to forecast whether this trend will reverse, we know that historically markets have gone through cycles many times. Importantly, from a

 

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long-term investor’s standpoint, international markets today are trading at some of the largest valuation discounts relative to the U.S. market in nearly two decades.

We also continue to find value in the United Kingdom as the market has focused on negative headlines and the persistent uncertainties surrounding the Brexit process. As of September 30, U.K. companies represented the fund’s largest country overweight, with a 23% weight vs. about 6% for the MSCI World Index.

Moreover, we continue to uncover appealing value potential in France, where our holdings remain diversified across a variety of sectors with both globally oriented and primarily Europe-facing companies.

From an industry/sector perspective, key areas of exposure were in Pharmaceuticals, Banks & Capital Markets, Oil, Gas & Consumable Fuels, Tobacco and Media. The fund maintained significantly lower allocations to Industrials, Technology and Materials sectors compared to the benchmark.

Please note that while macro conditions are considered when we determine valuation estimates for individual companies, our country and industry weightings are a by-product of bottom-up stock selection, not the result of top-down observations.

Amid the constant stream of macroeconomic and geopolitical news, Brandes continues to pursue attractive businesses with stock prices below our estimates of their intrinsic value. We believe uncertainties help drive prices of fundamentally sound companies below what they are truly worth.

We remain committed to building and holding value portfolios for our clients in all market conditions, and appreciate the trust you have placed in us to do so.

Sincerely yours,

The Brandes Global Large-Cap Investment Committee

Brandes Investment Trust

Because the values of the fund’s investments will fluctuate with market conditions, so will the value of your investment in the fund. You could lose money on your investment in the fund, or the fund could underperform other investments. The values of the fund’s investments fluctuate in response to the activities of individual companies and general stock market and economic conditions. In addition, the performance of foreign securities depends on the political and economic environments and other overall economic conditions in the countries where the fund invests. Emerging country markets involve greater risk and volatility than more developed markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these currencies have experienced, and may experience in the future, substantial fluctuations or a steady devaluation relative to the U.S. dollar. Value stocks

 

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typically are less volatile than growth stocks; however, issues of value stocks typically have a lower expected growth rate in earnings and sales than issues of growth stocks.

Past performance is not a guarantee of future results.

Forward Price/Earnings:  Price per share divided by earnings per share expected over the next 12 months.

Multiple:  A generic term for a class of many different indicators that can be used to value a stock. A multiple is simply a ratio that is calculated by dividing the market or estimated value of an asset by a specific item on the financial statement or other measure.

Price/Book:  Price per share divided by book value per share.

Free Cash Flow:  Total cash flow from operations less capital expenditures.

Tangible Book Value:  Book value minus intangible assets (e.g., goodwill).

Yield: Income from an investment (dividend, interest, etc.) divided by the investment’s current price.

Return on Capital:  Net income minus dividends divided by total capital; used to assess a company’s efficiency at allocating the capital under its control to profitable investments.

Please refer to the Schedule of Investments in the report for complete holdings information. Fund holdings, geographic allocations and/or sector allocations are subject to change at any time and are not considered a recommendation to buy or sell any security.

The foregoing reflects the thoughts and opinions of Brandes Investment Partners® exclusively and is subject to change without notice.

Brandes Investment Partners® is a registered trademark of Brandes Investment Partners, L.P. in the United States and Canada.

Must be preceded or accompanied by a prospectus.

Index Guide

The MSCI World Index with net dividends captures large and mid cap representation of developed markets.

The MSCI EAFE Index with net dividends captures large and mid cap representation of developed market countries excluding the U.S. and Canada.

The MSCI Emerging Markets Index with net dividends captures large and mid cap representation of emerging market countries.

The MSCI Europe Index with net dividends captures large and mid cap representation of developed market countries in Europe.

The S&P 500 Index with gross dividends measures equity performance of 500 of the top companies in leading industries of the U.S. economy.

 

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MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products.

One cannot invest directly in an index.

The Brandes Global Equity Income Fund is distributed by ALPS Distributors, Inc.

 

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The following chart compares the value of a hypothetical $100,000 investment in the Brandes Global Equity Income Fund – Class I from its inception (December 31, 2014) to September 30, 2018 with the value of such an investment in the MSCI World Index for the same period.

Value of $100,000 Investment vs MSCI World Index (Unaudited)

 

LOGO

 

   Average Annual
Total Return Periods
Ended September 30, 2018
 
   One
Year
  Three
Years
  Since
Inception(1)
 

Brandes Global Equity Income Fund

    

Class A

   2.66  12.70  9.32

Class A (with maximum sales charge)

   -3.24  10.48  7.60

Class C

   2.64  11.37  8.12

Class C (with maximum sales charge)

   1.66  11.37  8.12

Class I

   3.33  12.15  8.92

MSCI World Index

   11.24  13.54  8.88

 

(1) 

The inception date is December 31, 2014.

Performance data quoted represents past performance; past performance does not indicate future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-331-2979.

 

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The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Advisor has a fee waiver arrangement in place to limit the Fund’s annual operating expenses.

Sector Allocation as a Percentage of Total Investments as of September 30, 2018 (Unaudited)

 

LOGO

The sector classifications represented in the graph above are in accordance with Global Industry Classification Standard (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC.

 

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Brandes Global Opportunities Value Fund

 

Dear Fellow Investor,

The net asset value per share of the Brandes Global Opportunities Value Fund (Class I Shares) fell 3.28% in the year ending September 30, 2018. For the same period, the MSCI ACWI Index advanced 9.77%.

Positions in emerging markets weighed on returns as currency depreciation, geopolitical issues, and trade tensions heightened fear. As a result, holdings in emerging markets were the main detractors to performance, specifically Reliance Infrastructure (India – Electric Utilities), and Brazil-based companies Embraer (Aerospace & Defense), Marfrig Global Foods (Food Products), and Telefonica Brasil (Diversified Telecommunication Services).

In early July, Boeing and Embraer released a non-binding agreement to establish a new joint venture (JV) for commercial aircrafts. The deal values Embraer’s commercial aircraft business unit, which will be fully transferred to the new JV, at $4.75bn. Based on the deal terms, Boeing will own an 80% stake in the JV, while Embraer will hold the remaining 20%. Embraer will also retain control of its defense and business jet operations. The deal is expected to close by the end of 2019, subject to regulatory clearance.

Embraer’s shares fell as many investors appeared unsatisfied with the offered price. However, we believe the price was adequate, especially considering the other terms outlined in the agreement. Through its 20% stake, Embraer will be able to participate in the potential synergies that may materialize within the JV. Additionally, as the commercial aviation segment has faced increased competition, especially from Chinese, Russian and Japanese newcomers, the deal actually “neutralizes” a major long-term business threat for Embraer.

In August, Marfrig Global Foods announced that it would sell about 90% of its stake in Keystone, a fully owned subsidiary, to Tyson Foods. Keystone supplies protein to fast food chains mostly in the United States and Asia. The deal is expected to close by year-end at an enterprise value of $2.4bn, which was below the market’s initial expectations. Nevertheless, we believe Marfrig Global Foods remains undervalued. We are encouraged by the company’s continued balance sheet improvements and its efforts to streamline its business model.

Beyond emerging markets, a number of U.K.-based positions performed poorly, namely Countrywide (Real Estate Management & Development), Debenhams (Multiline Retail), and facility management firm Mitie.

Countrywide stock prices declined noticeably after it announced an equity raise to pay down its debt and improve its balance sheet. We subsequently participated in the capital raise at what we saw as an attractive price. We supported the initiative because we believe it helps reduce the company’s risk as it executes its turnaround plan. In our opinion, Countrywide has considerable capacity to improve its profitability after years of deterioration and misallocation of capital under previous management.

 

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From a relative standpoint, our underweight allocation to companies in the United States negatively impacted returns. Another significant headwind to the fund’s relative return was the continued strong performance of high-growth technology stocks.

The disappointing performance of a few of our U.K.-based holdings, which collectively represented the fund’s largest country weighting at the end of September, was partially offset by a number of solid contributors in the country. Grocers J Sainsbury, Tesco and Wm Morrison performed strongly, as did global oil company BP.

Tesco’s share prices rose on the back of improved sales growth and earnings. Meanwhile, J Sainsbury saw its stock appreciate after announcing its intention to merge with its competitor Asda, which would result in the largest grocery chain in the United Kingdom. Additionally, BP benefited from a stronger oil price environment.

Holdings in Russia, Japan and the United States contributed to performance. Three of the largest individual contributors to performance were Lukoil (Russia – Oil, Gas & Consumable Fuels), Express Scripts (United States – Health Care Providers & Services) and Sankyo (Japan – Leisure Products).

The Investment Committee initiated several new positions over the year ended September 30, including in Spanish media firm Atresmedia.

Atresmedia is the number two free-to-air television broadcaster in Spain, operating six channels. The company also has smaller operations in radio, cinema and digital activities. Overall, Atresmedia is a conservatively financed company with positive cash generation and a healthy balance sheet.

Atresmedia’s share price recently fell due to various factors. Based on our analysis, the company’s current challenges are mostly cyclical (more short-term) rather than structural (more long-term).

We believe the main short-term share-price driver will be the direction and magnitude of Spain’s economic growth. Our base case assumption is that the country’s gross domestic product will continue to grow at a moderate pace. On the structural front, we acknowledge that Atresmedia will eventually face increased competition from subscription video-on-demand providers, such as Netflix and Amazon Prime. However, we believe this threat is currently minimal and the effects will likely be delayed, especially given that Netflix’s penetration is still very low in Spain compared to other markets.

Trading at less than 9x earnings while offering a dividend yield of 7.5% as at September 30, 2018, Atresmedia shares represent an attractive risk/reward tradeoff to us.

We first purchased Willis Towers Watson (WTW) several years ago when the company was known as Willis Group and was the world’s third-largest insurance

 

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broker. At the time, WTW had significantly underperformed the broader non-U.S. market (as represented by the MSCI EAFE Index) since the onset of the global financial crisis as the market was concerned about its balance sheet.

The Brandes All-Cap Investment Committee found the valuation for WTW compelling. The insurance brokerage business was relatively stable with good cash conversion characteristics. The top three players, including WTW, had been increasing market shares through acquisitions, resulting in scale advantages and geographic diversification.

Ultimately, concerns about WTW’s balance sheet abated as credit markets began to recover and the company was able to use its cash to reduce financial leverage. In 2015, WTW merged with human resources consulting firm Towers Watson to enhance both companies’ growth prospects and gain potential scale advantages in the combined sales force. In the years since the merger, the market has become more optimistic about the company’s prospects, leading to a share-price appreciation and our subsequent decision to divest the position.

At the close of the period, the fund’s largest country weights were in the United Kingdom and the United States, and the largest industry weights were in Oil, Gas & Consumable Fuels and Food & Staples Retailing. Please note that while macro conditions are considered when we determine valuation estimates for individual companies, our country and industry weightings are a by-product of bottom-up stock selection, not the result of top-down observations.

From an industry/sector perspective, the fund held key areas of exposure in Consumer Discretionary (especially in Automobiles and Media) and Consumer Staples (mainly in Food & Staples Retailing). We maintained lower weightings to Technology, Financials and Materials than the benchmark.

Amid the constant stream of macroeconomic and geopolitical news, Brandes continues to pursue attractive businesses with stock prices below our estimates of their intrinsic value. We believe uncertainties help drive prices of fundamentally sound companies below what they are truly worth.

We remain committed to building and holding value portfolios for our clients in all market conditions, and we appreciate the trust you have placed in us. Thank you for your business and continued trust.

Sincerely yours,

The Brandes All-Cap Investment Committee

Brandes Investment Trust

Because the values of the fund’s investments will fluctuate with market conditions, so will the value of your investment in the fund. You could lose money on your investment in the fund, or the fund could underperform other investments. The values of the fund’s investments fluctuate in response to the activities of individual companies and general stock market

 

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and economic conditions. In addition, the performance of foreign securities depends on the political and economic environments and other overall economic conditions in the countries where the fund invests. Emerging country markets involve greater risk and volatility than more developed markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these currencies have experienced, and may experience in the future, substantial fluctuations or a steady devaluation relative to the U.S. dollar. Investments in small and medium capitalization companies tend to have limited liquidity and greater price volatility than investments in larger capitalization companies. Value stocks typically are less volatile than growth stocks; however, issues of value stocks typically have a lower expected growth rate in earnings and sales than issues of growth stocks.

Past performance is not a guarantee of future results.

Dividend Yield:  Dividends per share divided by price per share.

Price/Earnings:  Price per share divided by earnings per share.

Yield:  Income from an investment (dividend, interest, etc.) divided by the investment’s current price.

Please refer to the Schedule of Investments in the report for complete holdings information. Fund holdings, geographic allocations and/or sector allocations are subject to change at any time and are not considered a recommendation to buy or sell any security.

The foregoing reflects the thoughts and opinions of Brandes Investment Partners® exclusively and is subject to change without notice.

Brandes Investment Partners® is a registered trademark of Brandes Investment Partners, L.P. in the United States and Canada.

Must be preceded or accompanied by a prospectus.

Index Guide

The MSCI ACWI Index with net dividends captures large and mid cap representation of developed and emerging markets.

The MSCI EAFE Index with net dividends captures large and mid cap representation of developed market countries excluding the U.S. and Canada.

MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products.

One cannot invest directly in an index.

The Brandes Global Opportunities Value Fund is distributed by ALPS Distributors, Inc.

 

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The following chart compares the value of a hypothetical $100,000 investment in the Brandes Global Opportunities Value Fund – Class I from its inception (December 31, 2014) to September 30, 2018 with the value of such an investment in the MSCI All Country World Index for the same period.

Value of $100,000 Investment vs MSCI All Country World Index (Unaudited)

 

LOGO

 

   Average Annual
Total Return Periods
Ended September 30, 2018
 
   One
Year
  Three
Years
  Since
Inception(1)
 

Brandes Global Opportunities Value Fund

    

Class A

   -3.51  8.07  4.77

Class A (with maximum sales charge)

   -9.03  5.96  3.13

Class C

   -4.29  7.29  3.96

Class C (with maximum sales charge)

   -5.22  7.29  3.96

Class I

   -3.28  8.34  4.90

MSCI All Country World Index

   9.77  13.40  8.46

 

(1) 

The inception date is December 31, 2014.

Performance data quoted represents past performance; past performance does not indicate future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-331-2979.

The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Advisor has a fee waiver arrangement in place to limit the Fund’s annual operating expenses.

 

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Sector Allocation as a Percentage of Total Investments as of September 30, 2018 (Unaudited)

 

LOGO

The sector classifications represented in the graph above are in accordance with Global Industry Classification Standard (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC.

 

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Brandes Emerging Markets Value Fund

 

Dear Fellow Investor,

The net asset value per share of the Brandes Emerging Markets Value Fund (Class I Shares) declined 8.91% for the year ending September 30, 2018. For the same period, the MSCI Emerging Markets Index fell 0.81%.

Currency impact, geopolitical turmoil and fears of economic slowdown due to trade wars and rising U.S. interest rates were the main factors pressuring many of our holdings.

Our positions in countries with external financing vulnerabilities or current account deficits, namely Turkey, Brazil and Argentina, were the hardest hit. Currency declines in these three countries, where we were overweight relative to the MSCI Emerging Markets Index, contributed to underperformance. We believe the challenges associated with the currency fluctuations are short term in nature and we remain optimistic about the prospects of our holdings.

Notable detractors included Turkish banks Vakiflar Bank and Akbank, as well as real estate investment trust Emlak Konut. The fund’s exposure to Turkey, most notably our commercial bank holdings, hurt performance amid the country’s currency crisis. President Erdogan’s interference in monetary policy and the appointment of his son-in-law as treasury and finance minister shook investor confidence. Furthermore, weakened diplomatic relations with western partners added fuel to the lira’s tumbling. While fears of contagion momentarily spread throughout emerging markets, they have since dissipated.

As the risks of investing in the country intensified, we exited our position in bank Vakiflar Bankasi, especially given the company’s direct government control. We continuously monitor the situation in Turkey and maintain measured positions in Akbank, Garanti Bankasi and Emlak Konut.

Holdings in Brazil tended to decline over the period as the country’s upcoming election has led to increased volatility. Notable detractors included food producer Marfrig, regional jet manufacturer Embraer, health insurer Hapvida Participacoes and payment processor Cielo.

In August, Marfrig announced that it would sell about 90% of its stake in Keystone, a fully owned subsidiary, to Tyson Foods. Keystone supplies protein to fast food chains mostly in the United States and Asia. The deal is expected to close by year-end at an enterprise value of $2.4bn, which was below the market’s initial expectations. Nevertheless, we believe Marfrig remains undervalued. We are encouraged by the company’s continued balance sheet improvements and its efforts to streamline its business model.

In early July, Boeing and Embraer released a non-binding agreement to establish a new joint venture (JV) for commercial aircraft. The deal values Embraer’s commercial aircraft business unit, which will be fully transferred to the new JV, at $4.75bn. Based on the proposed terms, Boeing will own an 80% stake in the JV,

 

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while Embraer will hold the remaining 20%. Embraer will also retain control of its defense and business jet operations. The deal is expected to close by the end of 2019, subject to regulatory clearance.

Embraer’s shares fell as many investors appeared unsatisfied with the offered price. However, in our opinion, the price was adequate, especially considering the other terms outlined in the agreement. Through its 20% stake, Embraer will be able to participate in the potential synergies that may materialize within the JV. Additionally, as the commercial aviation segment has faced increased competition, particularly from Chinese, Russian and Japanese newcomers, we believe the deal actually “neutralizes” a major long-term business threat for Embraer.

Among our Brazilian holdings, education companies Kroton Educacional and Estacio Participacoes also weighed heavily on returns. Kroton and Estacio reported lower-than-expected near-term results and weak 2018 earnings guidance. The companies have also been facing regulatory policy uncertainties and a muted economic environment coupled with high unemployment in Brazil. We believe this negativity has been more than accounted for in Kroton’s and Estacio’s share prices. Our longer-term investment theses for the companies remain positive as their shares traded at attractive multiples of earnings.

Meanwhile, sizeable foreign exchange depreciation and the spillover effects from higher inflation and lower gross domestic product growth estimates hurt Argentinian shares, including those of oil & gas firm YPF. In early May, the Argentinian government announced a fuel-price freeze agreement with YPF and two other major oil companies operating in the country as part of its efforts to control consumer prices.

Share price advances among our energy holdings helped performance in the period, including Russia-based Surgutneftegas and Lukoil, as well as Brazil’s Petrobras. These companies saw enhanced operating results in a higher oil-price environment. Additionally, Petrobras had a legal settlement that came in below market expectations. The market also welcomed the news that the Brazilian government made good on its promise to cover the losses resulting from diesel price controls and has made two cash payments to Petrobras.

During the period, the Emerging Markets Investment Committee initiated positions in a number of companies that we believe are undervalued based on our long-term purview. This included a new positions in China Construction Bank.

Founded in 1954 as a state-owned lender specializing in construction and infrastructure projects, China Construction Bank (CCB) is the world’s fifth-largest and China’s second-largest bank by market capitalization. It commands an approximately 11% market share of China’s domestic loans and deposits, and has an impressive distribution network of almost 15,000 branches. CCB went public on the Hong Kong Stock Exchange in 2005.

 

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We have historically been cautious about investing in Chinese banks due to concerns about asset quality and the growth of shadow banking (i.e., unregulated investment activities). However, within the last couple of years, we have seen a growing sense of urgency within the Chinese government and from banking regulators to contain and reduce systemic financial risks. This has been demonstrated by the introduction of new regulations and initiatives, including:

 

  

Curbing the growth of wealth management products/shadow banking

 

  

Enforcing stricter rules related to the recognition of non-performing loans (NPLs) by banks

 

  

Increasing fines for illegal financing arrangements and hiding NPLs

 

  

Capping interbank borrowing to one-third of liabilities

Despite the reformation in China’s financial system, valuations for Chinese banks have declined sharply following the escalating trade dispute between the United States and China, piquing our interest.

Based on our analysis, compared to other banks in the country, China’s Big Four (i.e., CCB, ICBC, Bank of China, and Agricultural Bank of China) have higher capital ratios, less exposure to shadow banking/wealth management products, more stable funding profiles, better asset quality and stricter NPL recognition policies. We feel these strengths are underappreciated by the market. Specifically for CCB, other positive attributes include higher-than-peer exposure to mortgage and retail lending, as well as excellent management access.

Given its current valuations and the potential for further improvement in China’s financial system, we believe CCB offers an attractive risk/reward tradeoff to a discerning investor.

The Brandes Emerging Markets Investment Committee also added AsusTek Computer to the fund during the period.

A niche player in the commoditized personal computer (PC) industry, AsusTek focuses primarily on the premium and higher-growth segments of the consumer market, such as gaming PC, convertible laptops (i.e., laptops that can transform into a tablet) and detachable tablets (i.e., tablets with a removable keyboard).

The last several years have been quite challenging for AsusTek for a number of reasons:

 

  

The decline in the consumer PC market, resulting mainly from smartphone substitution and the lengthening of the PC replacement cycle, has hurt the company’s profitability.

 

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Unlike the commercial PC market, which has recently experienced a Windows 10-triggered upgrade cycle, the consumer PC market has been facing a sluggish environment.

 

  

AsusTek has experienced periodic spikes in input costs for components (e.g., liquid-crystal display or LCD panels).

We believe these headwinds have been more than accounted for in AsusTek’s share price. The market appears to overly focus on the lack of growth, while failing to acknowledge the company’s solid financial track record. Over the past decade, AsusTek has been profitable year over year and has generated positive free cash flows despite the fairly challenging consumer PC market environment. Furthermore, AsusTek is a research and development intensive company whose product mix is more attractive than that of its peers, in our opinion. Lastly, we appreciate the company’s strong balance sheet, with its net cash position representing over one-third of its market capitalization.

At the close of the period, the fund’s largest country weights were in Brazil and South Korea, and the fund’s largest industry weights were in Banks and Oil, Gas & Consumable Fuels. Please note that while macro conditions are considered when we determine valuation estimates for individual companies, our country and industry weightings are a by-product of bottom-up stock selection, not the result of top-down observations.

We have increasingly found investment opportunities in China amid the country’s trade war with the United States, coupled with increased market volatility. Thus far this year, the Emerging Markets Investment Committee has initiated positions in three Chinese companies, including the above-discussed China Construction Bank, while also averaging down on a few existing holdings.

Aside from China, the fund’s exposures have been relatively unchanged. Brazil, Russia and Mexico continued to represent overweight positions. We also maintained higher allocations to consumer discretionary and telecommunication services companies than the benchmark.

Even with the increased weighting, China remained one of our largest underweights at the end of September, along with Taiwan. From a sector perspective, we held material underweight allocations to Information Technology and Financials.

We remain convinced that the current positioning of the Brandes Emerging Markets Value Fund, which results from our careful bottom-up stock selection, bodes well for the long term.

Thank you for your business and continued trust.

Sincerely yours,

The Brandes Emerging Markets Investment Committee

Brandes Investment Trust

 

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Because the values of the fund’s investments will fluctuate with market conditions, so will the value of your investment in the fund. You could lose money on your investment in the fund, or the fund could underperform other investments. The values of the fund’s investments fluctuate in response to the activities of individual companies and general stock market and economic conditions. In addition, the performance of foreign securities depends on the political and economic environments and other overall economic conditions in the countries where the fund invests. Emerging country markets involve greater risk and volatility than more developed markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these currencies have experienced, and may experience in the future, substantial fluctuations or a steady devaluation relative to the U.S. dollar. Investments in small and medium capitalization companies tend to have limited liquidity and greater price volatility than investments in larger capitalization companies. Value stocks typically are less volatile than growth stocks; however, issues of value stocks typically have a lower expected growth rate in earnings and sales than issues of growth stocks.

Past performance is not a guarantee of future results.

Enterprise value:  Market capitalization plus debt, minority interest and preferred shares, minus total cash and cash equivalents.

Free Cash Flow:  Total cash flow from operations less capital expenditures.

Market Capitalization (cap):  The number of common shares outstanding multiplied by the current market price per common share.

Price/Earnings:  Price per share divided by earnings per share.

Please refer to the Schedule of Investments in the report for complete holdings information. Fund holdings, geographic allocations and/or sector allocations are subject to change at any time and are not considered a recommendation to buy or sell any security.

The foregoing reflects the thoughts and opinions of Brandes Investment Partners® exclusively and is subject to change without notice.

Brandes Investment Partners® is a registered trademark of Brandes Investment Partners, L.P. in the United States and Canada.

Must be preceded or accompanied by a prospectus.

Index Guide

The MSCI Emerging Markets Index with net dividends captures large and mid cap representation of emerging market countries.

 

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MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products.

One cannot invest directly in an index.

The Brandes Emerging Markets Value Fund is distributed by ALPS Distributors, Inc.

 

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The following chart compares the value of a hypothetical $100,000 investment in the Brandes Emerging Markets Value Fund – Class I from September 30, 2008 to September 30, 2018 with the value of such an investment in the MSCI Emerging Markets Index for the same period.

Value of $100,000 Investment vs MSCI Emerging Markets Index (Unaudited)

 

LOGO

 

   Average Annual Total Return
Periods Ended September 30, 2018**
 
   One
Year
  Five
Years
  Ten
Years
  Since
Inception(1)
 

Brandes Emerging Markets Value Fund

     

Class A

   -9.14  0.74  6.52  7.03

Class A (with maximum sales charge)

   -14.36  -0.45  5.89  6.75

Class C*

   -9.70  0.02  5.73  6.24

Class C* (with maximum sales charge)

   -10.59  0.02  5.73  6.24

Class I

   -8.91  1.01  6.77  7.30

Class R6*

   -8.74  1.13  6.86  7.37

MSCI Emerging Markets Index

   -0.81  3.61  5.40  6.19

 

(1) 

The inception date is August 20, 1996.

 

*

Performance shown prior to January 31, 2013 for Class C shares reflects the performance of Class I shares adjusted to reflect Class C expenses. Performance shown prior to July 11, 2016 for Class R6 shares reflects the performance of Class I shares adjusted to reflect Class R6 expenses.

 

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**

Prior to January 31, 2011, the Advisor managed a private investment fund with an investment objective, investment policies and strategies that were, in all material respects, equivalent to those of the Brandes Emerging Markets Value Fund. The performance information shown for the Class I shares for periods before January 31, 2011 is that of the private investment fund and reflects the net expenses of the private investment fund. The performance of the private investment fund prior to January 31, 2011 is based on a calculation method that is different from the standardized calculation method prescribed by the SEC. The performance information shown for the Class A shares has been adjusted to reflect the differences in the net expense ratios between the Class I and A shares. The private investment fund was not registered under the Investment Company Act of 1940 (“1940 Act”) and was not subject to certain investment limitations, diversification requirements, and other restrictions imposed by the 1940 Act and the Internal Revenue Code of 1986, which, if applicable, may have adversely affected its performance.

Performance data quoted represents past performance; past performance does not indicate future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-331-2979.

The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Advisor has a fee waiver arrangement in place to limit the Fund’s annual operating expenses.

Sector Allocation as a Percentage of Total Investments as of

September 30, 2018 (Unaudited)

 

LOGO

The sector classifications represented in the graph above are in accordance with Global Industry Classification Standard (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC.

 

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Brandes International Small Cap Equity Fund

 

Dear Fellow Investor,

The net asset value per share of the Brandes International Small Cap Equity Fund (Class I Shares) fell 8.70% in the year ending September 30, 2018. For the same period, the S&P Developed Ex-U.S. SmallCap Index rose 3.48%.

The largest detractors to performance were among emerging markets holdings, companies domiciled in the United Kingdom, and specific stocks within the consumer discretionary sector, commercial services and supplies, and pharmaceuticals.

In emerging markets currency depreciation, geopolitical issues, and trade tensions continued to create headwinds for the asset class. In particular, holdings in Brazil declined as the country’s upcoming election led to increased volatility.

Notable detractors included Brazilian electric utility Companhia Paranaense de Energia (Copel), food producer Marfrig Global Foods, regional jet manufacturer Embraer, and construction firm Mills Estruturas e Servicos de Engenharia.

In August, Marfrig announced that it would sell about 90% of its stake in Keystone, a fully owned subsidiary, to Tyson Foods. Keystone supplies protein to fast food chains mainly in the United States and Asia. The deal is expected to close by year-end at an enterprise value of $2.4bn, which was below the market’s initial expectations. Nevertheless, we believe Marfrig remains undervalued. We are encouraged by the company’s continued balance sheet improvements and its efforts to streamline its business model.

In early July, Boeing and Embraer released a non-binding agreement to establish a new joint venture (JV) for commercial aircraft. The deal values Embraer’s commercial aircraft business unit, which will be fully transferred to the new JV, at $4.75bn. Based on the proposed terms, Boeing will own an 80% stake in the JV, while Embraer will hold the remaining 20%. Embraer will also retain control of its defense and business jet operations. The deal is expected to close by the end of 2019, subject to regulatory clearance.

Embraer’s shares fell as many investors appeared unsatisfied with the offered price. However, in our view, the price was adequate, especially considering the other terms outlined in the agreement. Through its 20% stake, Embraer will be able to participate in the potential synergies that may materialize within the JV. Additionally, as the commercial aviation segment has faced increased competition, particularly from Chinese, Russian and Japanese newcomers, we believe the deal actually “neutralizes” a major long-term business threat for Embraer.

Beyond emerging markets, several of our U.K. positions continued to perform poorly, notably real estate firm Countrywide, facilities management company Mitie Group and retailer Debenhams.

Countrywide declined noticeably after it announced an equity raise to pay down its debt and improve its balance sheet. We subsequently participated in the capital

 

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raise at what we saw as an attractive price. We supported the initiative because we believe it helps reduce the company’s risk as it executes its turnaround plan. In our opinion, Countrywide has considerable capacity to improve its profitability after years of deterioration and misallocation of capital under previous management.

U.K.-based money and passports printer De La Rue also hurt returns. The company, which has been around for 200 years, saw its share price slide toward the end of the first quarter following the sudden departure of its chief financial officer and an unexplained profit warning. The stock took another tumble a few days later after the U.K. government decided to award the contract for manufacturing post-Brexit British passports to De La Rue’s foreign rival. We believe the market has overreacted to the news about De La Rue’s contract loss and we continue to see upside potential in the company as it resolves its excess capacity issue.

Ireland-based Avadel Pharmaceuticals also weighed on returns. In the year, U.S. private pharmaceutical firm Ferring received an FDA approval for a drug that will compete with Avadel’s recently launched proprietary drug, Noctiva. Avadel’s shares fell on the news. We believe the competitive threat has been more than accounted for in Avadel’s stock price. We appreciate that Avadel’s net cash position accounts for over half of its market cap and that the company generates significant cash flow from its hospital products. Furthermore, we see upside potential from the commercialization opportunity of Noctiva and the success of phase III trial for Avadel’s FT-218, a drug intended for use in narcolepsy treatment.

Helping absolute returns, portfolio holdings in the Food & Staples Retailing, Communications Equipment and Leisure Products industries were positive contributors to performance, as were select holdings in Japan, South Korea, and Indonesia.

Our consumer staples holdings performed well, led by U.K. grocers J Sainsbury and Wm Morrison, and Irish beverage company C&C Group.

J Sainsbury’s shares appreciated after the company declared its intention to merge with its competitor, Asda, which would result in the largest grocer in the United Kingdom.

Meanwhile, C&C Group recovered strongly after a difficult period of performance. Founded in the 1930s, C&C manufactures and markets a number of premium brands of cider and beer, with 70% share in Ireland’s cider market and a strong footing in beer distribution in Scotland. The company’s shares rebounded as recent results were largely in line with expectations. The market also reacted favorably to C&C’s purchase of Matthew Clark Bibendum in April, which expands the company’s scale and earnings base in the United Kingdom.

U.K.-based Communications Equipment company Spirent performed well over the period. Spirent’s shift to longer-term oriented strategic priorities, combined with a focus on curtailing costs, appears to have started bearing fruit. While its legacy device-testing business continues to be under pressure, the company has

 

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enjoyed growth in its network automation, cyber security testing and 5G/internet of things (IoT) segments. Moreover, the company’s operating profit has improved, leading to a substantial increase in its free cash flow.

Canadian based Communication Equipment firm Sierra Wireless also had positive stock price performance. Share price appreciation was driven by robust revenue and earnings growth in 2018. We believe the company remains undervalued. As an important player in the ever-evolving IoT (Internet of Things) ecosystem, Sierra Wireless enjoys a quite favorable competitive landscape. Moreover, the company has started to see results from its investments in enterprise products, and the integration of its cloud and connectivity businesses.

The Small-Cap Investment Committee initiated a number of positions over the period, including Spanish media firm Atresmedia and Hong Kong-based conglomerate First Pacific.

Atresmedia is the number two free-to-air television broadcaster in Spain, operating six channels. The company also has smaller operations in radio, cinema and digital activities. Overall, Atresmedia is a conservatively financed company with positive cash generation and a healthy balance sheet.

Atresmedia’s shares recently fell due to various factors. Based on our analysis, the company’s current challenges are mostly cyclical (more short-term) rather than structural (more long-term).

The main short-term share-price driver will be the direction and magnitude of Spain’s economic growth. Our base case assumption is that the country’s gross domestic product will continue to grow at a moderate pace. On the structural front, we acknowledge that Atresmedia will eventually face an increased competition from subscription video on demand providers, such as Netflix and Amazon Prime. However, we believe this threat is currently minimal and the effects will likely be delayed, especially given that Netflix’s penetration is still very low in Spain compared to other markets.

Trading at less than 9x earnings while offering a dividend yield of 7.5% as at September 30, 2018, Atresmedia stock represents an attractive risk/reward tradeoff to us.

First Pacific is a company that we are very familiar with, as we have held it in various Brandes strategies over the past decade. The company is majority-owned (44%) by the Salim Family of Indonesia and holds investments in various sectors, including:

 

  

PLDT (26% stake), the leading telecom services provider in the Philippines

 

  

Indofood (50% stake), Indonesia’s leading processed-foods (e.g., noodles, flour) company

 

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Metro Pacific (56% stake), a Philippine-based investment holding company involved in water and electric utilities

 

  

Philex (47% stake), a gold and copper mining firm in the Philippines

Apart from First Pacific itself, we have owned PLDT and Indofood shares at various times in the past. PLDT was the main driver of First Pacific’s value from 2003 to 2007, during which the telecom services provider benefited from increasing wireless penetration in the Philippines. Meanwhile, Indofood was the main source of First Pacific’s increase in value from 2008 to 2012, as the food producer experienced volume growth and margin recovery in its noodles business.

In the last several years, the growth of First Pacific’s larger assets, including PLDT and Indofood, has moderated and the company has taken the cash flow from these maturing businesses to enter other areas. The latest push has been into infrastructure in the Philippines, power generation in Singapore, food products in Australia and to a lesser degree, toll roads in Thailand and mining in the Philippines. As a result, First Pacific’s asset mix has become more diversified and balanced. Whereas at one point the telecom segment (PLDT) accounted for about 80% of First Pacific’s net asset value (NAV), with Indofood representing almost the rest, its other assets have been gaining scale and becoming a growing share of NAV.

Although First Pacific’s market capitalization is $2.2bn, the combined market capitalization of its underlying assets sums to nearly 10 times that. First Pacific’s holdings are significant players in their respective sectors and countries, and together, they employ over 90,000 people. Considering its good asset quality and attractive valuation (it traded at high discounts to net assets value and our intrinsic value estimate at quarter end), we find First Pacific an appealing investment opportunity.

At the close of September, the fund’s largest country weights were in Japan and the United Kingdom, and the fund’s largest industry weights were in Food Products and Food & Staples Retailing. Please note that while macro conditions are considered when we determine valuation estimates for individual companies, our country and industry weightings are a by-product of bottom-up stock selection, not the result of top-down observations.

We remain optimistic about the prospects of the international small-cap equity asset class in general and the Brandes International Small Cap Equity fund in particular.

The asset class continues to represent an area where we find companies offering what we consider compelling margins of safety, enabling us to focus on a defensive portfolio. We believe this should help us seek downside protection while still supporting the fund’s ability to pursue attractive long-term risk-adjusted returns. As of September 30, the fund traded at 11.5x earnings and 74% of book value.

The majority of the companies we hold possess solid balance sheets and command long-standing competitive positions in important industries in their home markets.

 

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We have also increasingly found opportunities in highly out-of-favor areas, such as emerging markets and the United Kingdom. Additionally, the fund has a small and controlled allocation to riskier holdings that offer considerable upside if our theses hold (but the smaller allocation means the impact on the fund is limited if these do not work out).

Together, these characteristics give us confidence that the fund’s positioning bodes well for the long term. Thank you for your continued trust.

Sincerely yours,

The Brandes Small-Cap Investment Committee

Brandes Investment Trust

Because the values of the fund’s investments will fluctuate with market conditions, so will the value of your investment in the fund. You could lose money on your investment in the fund, or the fund could underperform other investments. The values of the fund’s investments fluctuate in response to the activities of individual companies and general stock market and economic conditions. In addition, the performance of foreign securities depends on the political and economic environments and other overall economic conditions in the countries where the fund invests. Emerging country markets involve greater risk and volatility than more developed markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these currencies have experienced, and may experience in the future, substantial fluctuations or a steady devaluation relative to the U.S. dollar. Investments in small and medium capitalization companies tend to have limited liquidity and greater price volatility than investments in larger capitalization companies. Value stocks typically are less volatile than growth stocks; however, issues of value stocks typically have a lower expected growth rate in earnings and sales than issues of growth stocks.

Past performance is not a guarantee of future results.

Book value:  Assets minus liabilities. Also known as shareholders’ equity.

Cash Flow:  The amount of cash generated minus the amount of cash used by a company in a given period.

Dividend Yield:  Dividends per share divided by price per share.

Enterprise Value/Sales:  Enterprise value divided by sales.

Free Cash Flow:  Total cash flow from operations less capital expenditures.

Margin of Safety:  The discount of a security’s market price to what the firm believes is the intrinsic value of that security.

Market Capitalization (cap):  The number of common shares outstanding multiplied by the current market price per common share.

 

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Net Cash:  Total cash minus total debt.

Price-to-earnings (P/E):  Price per share divided by earnings per share.

The declaration and payment of shareholder dividends are solely at the discretion of the issuer and are subject to change at any time.

Please refer to the Schedule of Investments in the report for complete holdings information. Fund holdings, geographic allocations and/or sector allocations are subject to change at any time and are not considered a recommendation to buy or sell any security.

The foregoing reflects the thoughts and opinions of Brandes Investment Partners® exclusively and is subject to change without notice.

Brandes Investment Partners® is a registered trademark of Brandes Investment Partners, L.P. in the United States and Canada.

Must be preceded or accompanied by a prospectus.

Index Guide

The S&P Developed Ex-U.S. SmallCap Index with net dividends measures the equity performance of small-capitalization companies from developed markets excluding the United States.

One cannot invest directly in an index.

The Brandes International Equity Small Cap Equity Fund is distributed by ALPS Distributors, Inc.

 

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The following chart compares the value of a hypothetical $100,000 investment in the Brandes International Small Cap Fund – Class I from September 30, 2008 to September 30, 2018 with the value of such an investment in the S&P Developed Ex-U.S. SmallCap Index for the same period.

Value of $100,000 Investment vs S&P Developed

Ex-U.S. SmallCap Index (Unaudited)

 

LOGO

 

   Average Annual Total Return
Periods Ended September 30, 2018**
 
   One
Year
  Five
Years
  Ten
Years
  Since
Inception(1)
 

Brandes International Small Cap Fund

     

Class A

   -8.88  3.40  10.58  9.05

Class A (with maximum sales charge)

   -14.12  2.18  9.93  8.76

Class C*

   -9.55  2.65  9.77  8.24

Class C* (with maximum sales charge)

   -10.39  2.65  9.77  8.24

Class I

   -8.70  3.63  10.83  9.32

Class R6*

   -8.64  3.70  10.90  9.37

S&P Developed Ex-U.S. SmallCap Index

   3.48  7.35  8.55  7.01

 

(1) 

The inception date is August 19, 1996.

 

*

Performance shown prior to January 31, 2013 for Class C shares reflects the performance of Class I shares adjusted to reflect Class C expenses. Performance shown prior to June 27, 2016 for Class R6 shares reflects the performance of Class I shares adjusted to reflect Class R6 expenses.

 

**

Prior to February 1, 2012, the Advisor managed a private investment fund with an investment objective, investment policies and strategies that were, in all material respects, equivalent to those of the Brandes International Small Cap Fund. The performance information shown for the Class I shares for periods before February 1, 2012 is that of the private investment fund and reflects the net expenses of the private investment fund. The performance of the private investment fund prior to February 1, 2012 is based on a calculation method that is different from the standardized calculation method prescribed by the SEC. The performance information shown for the Class A shares has been adjusted to reflect the differences in the net expense ratios between the Class I and A shares. The private investment fund was not registered under the Investment Company Act of 1940 (“1940 Act”) and was not subject to certain investment limitations, diversification requirements, and other restrictions imposed by the 1940 Act and the Internal Revenue Code of 1986, which, if applicable, may have adversely affected its performance.

 

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Performance data quoted represents past performance; past performance does not indicate future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-331-2979.

The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Advisor has a fee waiver arrangement in place to limit the Fund’s annual operating expenses.

Sector Allocation as a Percentage of Total Investments as of

September 30, 2018 (Unaudited)

 

LOGO

The sector classifications represented in the graph above are in accordance with Global Industry Classification Standard (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC.

 

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Brandes Small Cap Value Fund

 

Dear Fellow Investor,

The net asset value per share of the Brandes Small Cap Value Fund (Class I Shares) rose 4.65%(1) in the year ending September 30, 2018. For the same period, the Russell 2000 Index increased 15.24% while the Russell 2000 Value Index gained 9.33%.

Relative to the index, underperformance was driven by holdings in Household Durables, Healthcare Providers and Services, and Pharmaceutical companies.

Holdings in the Household Durables industry were leading detractors from performance in the period, including CSS Industries, Taylor Morrison, Beazer Homes as well as Personal Products company Edgewell Personal Care.

CSS Industries shares retreated after the company issued poor quarterly earnings results and lowered its fiscal year guidance. The fund maintains a position in CSS because the company trades at less than 80% of tangible book value, supports a history of low capital expenditure needs with good cash conversion and offers a good dividend yield.

Mini-conglomerate Dorel Industries reported weak results, especially in its sports and juvenile segments. The company also noted that the bankruptcy of Toys R Us hurt its near-term profitability. Despite these recent difficulties, we continue to believe Dorel represents an undervalued opportunity. Among small-cap companies in the industry, Dorel is unrivaled in its extensive brand offerings.

Within pharmaceuticals, Avadel Pharmaceuticals shares weighed on returns. In 2018, U.S. private pharmaceutical firm Ferring received an FDA approval for a drug that will compete with Avadel’s recently launched proprietary drug Noctiva. Avadel’s share price fell on the news. In our opinion, the competitive threat has been more than accounted for in Avadel’s stock price. We appreciate that Avadel’s net cash position accounts for over half of its market cap and that the company generates significant cash flow from its hospital products. Furthermore, we see upside potential from the commercialization opportunity of Noctiva and the success of the phase III trial for Avadel’s FT-218, a narcolepsy treatment.

On an absolute basis, the main contributors to the fund’s positive performance over the trailing twelve months were holdings in the Information Technology and Biotechnology industries.

 

 

 

(1)

Prior to January 2, 2018, the Advisor managed a private investment fund with an investment objective, investment policies and strategies that were, in all material respects, equivalent to those of the Brandes Small Cap Value Fund. The performance information shown for the Class I shares for the periods before January 2, 2018 is that of the private investment fund and reflects the net expenses of the private investment fund. The performance of the private investment fund prior to January 2, 2018 is based on a calculation method that is different from the standardized calculation method prescribed by the SEC.

 

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Among our Information Technology holdings, Electrical Equipment, Instruments & Components companies Fabrinet and Avnet, as well as IT Services company EVERTEC, led the strong performance. EVERTEC has significant exposure to Puerto Rico and has seen improved sales volume driven by local recovery and relief efforts.

Fabrinet, a new addition to the fund in the first quarter of 2018, announced an increased stock repurchase program equivalent to approximately 5% of its market cap in addition to strong earnings results.

Select companies among the fund’s health care holdings delivered strong absolute performance, with several biotechnology companies making noteworthy contributions, including: AMAG Pharmaceuticals, OPKO Health, and Eagle Pharmaceuticals as the company continues to move new medications through the late stages in its pipeline.

New additions to the fund’s portfolio during the period included Sierra Wireless and Fabrinet.

We have followed Sierra Wireless for a while, having owned its stock in other funds various times over the past five years. The company specializes in providing wireless solutions products to businesses, including wireless modems, routers and gateways. Among its client base are personal computer and tablet makers, automotive manufacturers, utilities and security services providers. More recently, we found value potential in Sierra Wireless again. While the company has made significant inroads in diversifying its product mix across segments, it still competes in an industry that is cyclical, transactional and can have commodity characteristics. Sierra Wireless has also grown its Internet of Things (IoT) business through acquisition, which poses the risk of integration issues and poor capital allocation.

These factors have worked against Sierra Wireless in recent months, providing us with an opportunity to buy its stock. Trading at just over book value and 13x earnings when purchased, and with its net cash position accounting for over one-third of its market capitalization, we believe Sierra Wireless represents an attractive risk/reward tradeoff.

Fabrinet is the world’s largest outsourced optical equipment manufacturing company. We were able to purchase the company at an attractive price as its share price had declined due to a depressed optical equipment end-market, driven by weak telecom spending, including telecom companies waiting to upgrade their networks.

We found Fabrinet to be an appealing investment given its valuation and solid fundamentals, as explained below.

 

  

Attractive valuation: Around the time of purchase, Fabrinet’s shares traded at a small premium to book value and less than 13x earnings. The company also boasted a strong net-cash balance sheet.

 

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Strong competitive position: While the optical communications market is fairly commoditized and fragmented, Fabrinet maintains a strong competitive edge. The company also enjoys a diversified and loyal customer base, given its strong customer-development partnerships, enabling the company to add value in a highly competitive industry and generate attractive returns on capital.

 

  

Solid direct relationships with the world’s largest data center customers, such as Amazon: This dynamic should strategically position the company well for future revenue growth.

Since purchasing Fabrinet shares in the fund, it was up substantially and was one of the fund’s best performing holdings over the period. On the heels of strong price appreciation we exited Fabrinet as its shares reached our estimate of intrinsic value. Other sale activity included biotech OPKO Health and bank ACNB Corporation. OPKO Health was also among the best year-to-date performers and we exited the position as the share price appreciated to our estimate of fair value.

At the close of the period, the fund’s largest industry weights were in Household Durables and Oil, Gas & Consumable Fuels. Please note that while macro conditions are considered when we determine valuation estimates for individual companies, our industry weightings are a by-product of bottom-up stock selection, not the result of top-down observations.

At the end of September, the fund exhibited more attractive valuations, in our opinion, than the Russell 2000 Index.

Our conviction for companies within the fund remains strong. Amid the constant stream of macroeconomic and geopolitical news, Brandes continues to pursue attractive businesses with stock prices below our estimates of their intrinsic value. We believe uncertainties help drive prices of fundamentally sound companies below what they are truly worth—and this opportunity bodes well for long-term oriented investors.

We remain committed to building and holding a value portfolio for the fund in all market conditions, and we appreciate the trust you have placed in us to do so. Thank you for your business and continued trust.

Sincerely yours,

The Brandes Small-Cap Investment Committee

Brandes Investment Trust

Because the values of the fund’s investments will fluctuate with market conditions, so will the value of your investment in the fund. You could lose money on your investment in the fund, or the fund could underperform other investments. The values of the fund’s investments fluctuate in response to the activities of individual companies and general stock market and economic conditions. Investments in small and medium capitalization

 

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companies tend to have limited liquidity and greater price volatility than investments in larger capitalization companies. Value stocks typically are less volatile than growth stocks; however, issues of value stocks typically have a lower expected growth rate in earnings and sales than issues of growth stocks.

Past performance is not a guarantee of future results.

Book value:  Assets minus liabilities. Also known as shareholders’ equity.

Cash Flow:  The amount of cash generated minus the amount of cash used by a company in a given period.

Dividend Yield:  Dividends per share divided by price per share.

Market Capitalization (cap):  The number of common shares outstanding multiplied by the current market price per common share.

Net Cash:  Total cash minus total debt.

Return on Capital:  Net income minus dividends divided by total capital; used to assess a company’s efficiency at allocating the capital under its control to profitable investments.

Tangible Book Value:  Book value minus intangible assets (e.g., goodwill).

Please refer to the Schedule of Investments in the report for complete holdings information. Fund holdings, geographic allocations and/or sector allocations are subject to change at any time and are not considered a recommendation to buy or sell any security.

The foregoing reflects the thoughts and opinions of Brandes Investment Partners® exclusively and is subject to change without notice.

Brandes Investment Partners® is a registered trademark of Brandes Investment Partners, L.P. in the United States and Canada.

Must be preceded or accompanied by a prospectus.

Index Guide

The Russell 2000 Index with gross dividends measures the performance of the small cap segment of the U.S. equity universe.

The Russell 2000 Value Index with gross dividends measures performance of the small cap value segment of the U.S. equity universe. Securities are categorized as growth or value based on their relative book-to-price ratios, historical sales growth, and expected earnings growth.

One cannot invest directly in an index.

The Brandes Small Cap Value Fund is distributed by ALPS Distributors, Inc.

 

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Brandes Small Cap Value Fund

 

The following chart compares the value of a hypothetical $100,000 investment in the Brandes Small Cap Value Fund – Class I from September 30, 2008 to September 30, 2018 with the value of such an investment in the Russell 2000 Total Return Index for the same period.

Value of $100,000 Investment vs Russell 2000 Total Return Index (Unaudited)

 

LOGO

 

   Average Annual Total Return
Periods Ended September 30, 2018*
 
   One
Year
  Five
Years
  Ten
Years
  Since
Inception(1)
 

Brandes Small Cap Value Fund

     

Class A

   4.40  10.60  11.10  7.06

Class A (with maximum sales charge)

   -1.60  9.30  10.44  6.76

Class I

   4.65  10.87  11.38  7.33

Class R6

   5.19  10.99  11.43  7.35

Russell 2000 Total Return Index

   15.24  11.07  11.11  7.89

 

(1) 

The inception date is September 30, 1997.

 

*

Prior to January 2, 2018, the Advisor managed a private investment fund with an investment objective, investment policies and strategies that were, in all material respects, equivalent to those of the Brandes Small Cap Value Fund. The performance information shown for the Class I shares for periods before January 2, 2018 is that of the private investment fund and reflects the net expenses of the private investment fund. The performance of the private investment fund prior to January 2, 2018 is based on a calculation method that is different from the standardized calculation method prescribed by the SEC. The performance information shown for the Class A shares has been adjusted to reflect the differences in the net expense ratios between the Class I and A shares. Performance shown prior to January 2, 2018 for Class R6 shares reflects the performance of Class I shares. The private investment fund was not registered under the Investment Company Act of 1940 (“1940 Act”) and was not subject to certain investment limitations, diversification requirements, and other restrictions imposed by the 1940 Act and the Internal Revenue Code of 1986, which, if applicable, may have adversely affected its performance.

 

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Performance data quoted represents past performance; past performance does not indicate future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-331-2979.

The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Advisor has a fee waiver arrangement in place to limit the Fund’s annual operating expenses.

Sector Allocation as a Percentage of Total Investments as of

September 30, 2018 (Unaudited)

 

LOGO

The sector classifications represented in the graph above are in accordance with Global Industry Classification Standard (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC.

 

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Brandes Core Plus Fixed Income Fund

 

Dear Fellow Investor,

The net asset value per share of the Brandes Core Plus Fixed Income Fund (Class I Shares) declined 0.85% in the year ending September 30, 2018. For the same period, the Bloomberg Barclays U.S. Aggregate Index decreased 1.22%.

After several years of calm waters, the first quarter of 2018 saw the return of volatility in both the equity and fixed income markets. Treasury rates moved higher during the trailing twelve months, with the two-year Treasury yield closing at 2.81% on September 30, the highest level in a decade. The Federal Reserve raised short-term interest rates four times during the past year, most recently in September — a decision that was well communicated and almost universally expected. After eight rate hikes since 2015, the federal funds rate is now at the highest level since October 2008, just after the collapse of Lehman Brothers.

The fund continued to benefit from a defensive tilt toward shorter-maturity corporate bonds. We have been favoring short-maturity bonds for over a year now. Longer-maturity corporate bonds underperformed shorter maturities as their longer duration left them more exposed to rising interest rates and increased level of volatility during the quarter. We continue to manage duration toward the lower end of our duration-controlled band.

Portfolio holdings in corporate bonds and asset-back securities were contributors to performance. An underweight to U.S. Agency mortgage-backed securities (MBS) was also a positive performance factor, while duration positioning was a neutral factor.

Within corporate bonds, energy holdings (Chesapeake Energy and Range Resources) and a number of bank holdings (Wells Fargo, JPMorgan Chase and USB Capital) primarily boosted returns. The fund also received a positive contribution from Avon International, which was subjected to an early call in mid-June at a premium.

Select holdings in homebuilders detracted from performance. Homebuilder bond-price and yield-spread movements were largely driven by the market’s fear of higher U.S. Treasury rates, given the assumption that as borrowing costs become more expensive, the sector will experience a slowdown. However, we believe the fundamentals for the industry — with new housing lagging household formation — and individual companies such as PulteGroup and Toll Brothers, remain strong.

Our first-lien bond holding from JC Penney hurt returns as the company experienced continued volatility. In the second quarter, JC Penney’s Chief Executive Officer (CEO) unexpectedly resigned to join Lowe’s as its CEO. Late in the third quarter, JC Penney’s Chief Financial Officer also resigned. While a leadership void at the helm of a retailer in a secularly challenged space is certainly not ideal, we remain comfortable with our holding and even added to our position. Note that JC Penney’s first-lien bond is explicitly backed by the real-estate collateral of 285 stores and nine distribution centers, which we believe covers our bonds in full.

 

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We initiated a new position in first-lien bonds from Wyndham Destinations (3.90% coupon rate, maturing March 2023 and rated Ba2/BB-), Iron Mountain (4.875% coupon rate, maturing September 2027 and rated Ba3/BB-) and VMware (3.90% coupon rate, maturing August 2027 and rated Baa2/BBB-). We also added to our JC Penney position and extended our maturity in Chesapeake Energy by selling our 2021 maturity bonds and purchasing 2025 maturity bonds.

Wyndham Destinations is the world’s largest vacation ownership and exchange company. It recently spun off the hotel operations of Wyndham Hotel & Resorts into a separate publicly traded company. In our view, Wyndham Destinations benefits from largely stable and recurring revenue (approx. 75% of revenue is recurring) and solid free-cash-flow generation. While the vacation ownership model was traditionally quite capital intensive, more recently it has been shifting to a more capital-efficient approach. In this new business model, third-party developers finance and build resort properties and Wyndham acts as a selling agent or purchases inventory from the developer in more of a just-in-time strategy (i.e., an inventory method in which materials are only ordered and received as they are needed in the production process).

Iron Mountain is the global leader in records management and physical record storage. The company provides storage and information management services to large and small clients in financial services, health care, entertainment, retail, law, government and other record-intensive industries. In addition to housing paper records, the firm offers archival services and provides digital backup and recovery solutions. The company has an annuity-like revenue stream with very little churn among customers.

VMware is the market leader in server virtualization and in the overall cloud infrastructure space, which enables cloud technology for enterprises. The company benefits from a growing business that is less cyclical than most technology companies. VMware maintains a strong balance sheet with low leverage. Despite these positive factors, in our opinion the company’s credit ratings have been constrained due to the majority ownership by Dell Corp. Specifically, VMware remains an unrestricted subsidiary of Dell. VMware has no upstream guarantees and does not own publicly traded equity. We believe that due to this constraint, VMware bonds’ credit spreads have disconnected from the company’s true underlying credit profile, thus presenting an attractive value opportunity.

In early 2018 we added two notable new positions, Pilgrim’s Pride and JC Penney.

Pilgrim’s Pride (5.875% coupon rate, maturing September 2027 and rated B1/B+) is the largest chicken producer in the United States. The company experienced weakness due to scandals at its parent JBS S.A. JBS is a Brazilian company and the largest meat processor in the world. It was implicated in a corruption investigation in the fall of 2017 involving government bribes and kickbacks. We have a positive view of Pilgrim’s Pride’s standalone credit fundamentals (apart from JBS) as well as

 

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the fundamentals of the poultry industry. We gain comfort from the fact that Pilgrim’s Pride is a publically traded subsidiary, likely reducing the risk that JBS S.A. could inappropriately lever up Pilgrim’s Pride to meet its own liquidity needs.

Finally, the bonds came under additional pricing pressure from a general softening in the high yield market along with news of a Sysco lawsuit against Pilgrim’s Pride and Tyson alleging price fixing via reducing breeder flocks. This strikes us as stretching the notion of price fixing to incorporate the normal matching of supply to anticipated demand. But, in any event, we believe the balance sheet and free cash flow characteristics of Pilgrim’s Pride are sufficient to withstand short-term negative news.

JC Penney (1st lien 5.875% coupon rate, maturing July 2023 and rated Ba3/BB-) is a department store chain with 850 locations in 49 states. We initially reviewed JC Penney in mid-2017 and anticipated potential volatility surrounding results of the critical holiday selling season, so we waited for further clarity before initiating a position. The company pre-released its holiday results early in the first quarter. The company reported positive free cash flow along with clean inventory positions (i.e., not holding excess or unwanted goods that could require large, margin-compressing markdowns to liquidate) — indications that its recent merchandising direction was being received favorably by customers, improving investor visibility into the company’s critical gross margin line.

During our review of JC Penney, we had considerable focus on the value of the company’s real estate. We initiated a position in a 1st lien issue, which would have the first claim on assets in event of a distressed situation. This gives us an additional measure of security over the company’s unsecured bonds should the company’s fundamentals remain weak, calling into question survival over the long term. Later in the quarter, JC Penney was able to come to market with a 2nd lien bond issuance — which does not affect asset coverage at our 1st lien level — with the proceeds to be used to reduce maturities in front of our holding. This refinancing should meaningfully reduce liquidity risk for the company for an extended period.

Over the period we exited our position in First Energy (7.375% coupon rate, maturing November 2031 and rated Baa3/BB+). We had owned this bond for almost a decade, initiating the position in 2009. First Energy bond yield spreads have long traded wider than our estimate of fair value due to looming bankruptcy or restructuring of the company’s unregulated generation subsidiary. Restructuring costs were anticipated to be around $1 billion, with an expected equity raise of $1.5 billion, which would have left our holding company issue at marginally investment grade credit metrics in our view.

During the period, Elliot Management, an activist investor, invested $2.5 billion equity into First Energy — a positive surprise that caused yield spreads to tighten well inside our estimate of fair value. Elliott Management made statements suggesting it might play hardball with bondholders of the unregulated generation

 

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subsidiary, raising the risk that the exit from this business could become prolonged. This in turn would create potential uncertainty that could pressure holding company bonds. Therefore, with the good news priced in and our fair value target exceeded, we took the opportunity to exit this long-term holding.

At the close of the period, the fund continues to favor short-maturity corporate bonds and those that we believe exhibit strong, tangible asset coverage. The fund is underweight agency MBS. The duration is positioned toward the shorter end of our duration-controlled range. The fund has a high allocation to U.S. Treasuries that we will look to redeploy thoughtfully and efficiently — if and when market uncertainty and volatility cause credit fundamentals to become mispriced from our estimates of intrinsic value.

We believe the current positioning of the fund bodes well for the long-term. As always, thank you for your business and continued trust.

Sincerely Yours,

The Brandes Fixed Income Investment Committee

Brandes Investment Trust

Because the values of the fund’s investments will fluctuate with market conditions, so will the value of your investment in the fund. You could lose money on your investment in the fund, or the fund could underperform other investments. The values of the fund’s investments fluctuate in response to the activities of individual companies and general bond market and economic conditions. Investments in small and medium capitalization companies tend to have limited liquidity and greater price volatility than large capitalization companies.

As with most fixed income funds, the income on and value of your shares in the fund will fluctuate along with interest rates. When interest rates rise, the market prices of the debt securities the fund owns usually decline. When interest rates fall, the prices of these securities usually increase. Generally, the longer the fund’s average portfolio maturity and the lower the average quality of its portfolio, the greater the price fluctuation. The price of any security owned by the fund may also fall in response to events affecting the issuer of the security, such as its ability to continue to make principal and interest payments or its credit rating. Below investment grade debt securities are speculative and involve a greater risk of default and price change due to changes in the issuer’s creditworthiness than higher grade debt. The market prices of these debt securities may fluctuate more than the market prices of investment grade debt securities and may decline significantly in periods of general economic difficulty.

Past performance is not a guarantee of future results.

 

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Credit ratings apply the underlying holdings of the fund, and not to the fund itself. S&P and Moody’s study the financial condition of an entity to ascertain its creditworthiness. The credit ratings reflect the rating agency’s opinion of the holdings financial condition and histories. The ratings shown are all considered investment grade and are listed by highest to lowest in percentage of what the fund holds.

A bond is considered investment grade if its credit rating is ‘BBB-‘ or higher by Standard & Poor’s or ‘Baa3’ or higher by Moody’s. Anything below this ‘BBB’ rating is considered non-investment grade. Generally investment grade are bonds that are judged by the rating agency as likely enough to meet payment obligations that banks are allowed to invest in them. A non-investment grade bond, also called a speculative bond, a high yield bond, an unsecured debenture, or a junk bond, is a bond that is considered a low quality investment because the issuer may default.

Short-term debt refers to fixed income securities set to mature more 1 to 5 years from the issue or purchase date. Long-term debt refers to fixed income securities set to mature more than 10 years from the issue or purchase date.

Asset Coverage:  A company’s ability to cover debt obligations with its assets after all liabilities have been satisfied. Source: Investopedia.com

Duration:  The weighted maturity of a fixed-income investment’s cash flows, used in the estimation of the price sensitivity of fixed-income securities for a given change in interest rates.

Federal Funds Rate:  The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution overnight.

Free Cash Flow:  Total cash flow from operations less capital expenditures.

Upstream Guarantee:  A financial guarantee in which the subsidiary guarantees its parent company’s debt.

Yield:  Annual income from the investment (dividend, interest, etc.) divided by the current market price of the investment.

Yield Curve:  A graphical comparison of the relationship between interest rates for loans of various maturities with similar credit quality. A typical yield curve slopes upward to reflect higher interest rates for longer maturities.

Yield Spread:  The difference in yield from a Treasury security and another debt security of the same maturity.

The declaration and payment of shareholder dividends are solely at the discretion of the issuer and are subject to change at any time.

Please refer to the Schedule of Investments in the report for complete holdings information. Fund holdings, geographic allocations and/or sector allocations are subject to change at any time and are not considered a recommendation to buy or sell any security.

 

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The foregoing reflects the thoughts and opinions of Brandes Investment Partners® exclusively and is subject to change without notice.

Brandes Investment Partners® is a registered trademark of Brandes Investment Partners, L.P. in the United States and Canada.

Must be preceded or accompanied by a prospectus.

Index Guide

The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. This index is a total return index which reflects the price changes and interest of each bond in the index.

One cannot invest directly in an index.

The Brandes Core Plus Fixed Income Fund is distributed by ALPS Distributors, LLC.

 

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Brandes Core Plus Fixed Income Fund

 

The following chart compares the value of a hypothetical $100,000 investment in the Brandes Core Plus Fixed Income Fund – Class I from September 30, 2008 to September 30, 2018 with the value of such an investment in the Bloomberg Barclays U.S. Aggregate Bond Index for the same period.

Value of $100,000 Investment vs Bloomberg Barclays U.S. Aggregate Bond Index (Unaudited)

 

LOGO

 

   Average Annual Total Return
Periods Ended September 30, 2018
 
   One
Year
  Five
Years
  Ten
Years
  Since
Inception(1)
 

Brandes Core Plus Fixed Income Fund

     

Class A*

   -1.08  1.94  4.53  3.26

Class A* (with maximum sales charge)

   -4.81  1.15  4.13  2.89

Class I

   -0.85  2.26  4.84  3.56

Class R6*

   0.11  2.49  4.99  3.70

Bloomberg Barclays U.S. Aggregate Bond Index

   -1.22  2.16  3.77  3.59

 

(1) 

The inception date is December 28, 2007.

 

*

Performance shown prior to January 31, 2013 for Class A shares reflects the performance of Class I shares adjusted to reflect Class A expenses. Performance shown prior to October 10, 2017 for Class R6 shares reflects the performance of Class I shares adjusted to reflect Class R6 expenses.

Performance data quoted represents past performance; past performance does not indicate future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-331-2979.

 

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The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of Fund shares. The Advisor has a fee waiver arrangement in place to limit the Fund’s annual operating expenses.

Asset Allocation as a Percentage of Total Investments as of

September 30, 2018 (Unaudited)

 

LOGO

 

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Expense Example (Unaudited)

As a shareholder of a Fund, you incur ongoing costs, including investment advisory and administrative fees and other fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from April 1, 2018 to September 30, 2018 (the “Period”).

Actual Expenses

This section provides information about actual account values and actual expenses. The “Ending Account Value” shown is derived from each Fund’s actual return. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for the Fund under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

 

  Class A 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annual
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00  $987.20   1.16%  $5.78 

Global Equity Fund

 $1,000.00  $1,017.10   1.25%  $6.32 

Global Equity Income Fund

 $1,000.00  $1,011.10   1.25%  $6.30 

Global Opportunities Value Fund

 $1,000.00  $956.57   1.40%  $6.87 

Emerging Markets Value Fund

 $1,000.00  $883.00   1.37%  $6.47 

International Small Cap Fund

 $1,000.00  $921.10   1.31%  $6.31 

Small Cap Value Fund

 $1,000.00  $1,076.40   1.15%  $5.99 

Core Plus Fixed Income Fund

 $1,000.00  $1,001.20   0.70%  $3.51 

 

  Class C 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annual
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00  $983.80   1.91%  $9.50 

Global Equity Fund

 $1,000.00  $1,013.10   2.00%  $10.09 

Global Equity Income Fund

 $1,000.00  $1,010.00   2.00%  $10.08 

Global Opportunities Value Fund

 $1,000.00  $952.62   2.15%  $10.52 

Emerging Markets Value Fund

 $1,000.00  $880.00   2.09%  $9.85 

International Small Cap Fund

 $1,000.00  $918.40   2.06%  $9.91 

 

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  Class I 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annual
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00  $988.30   0.96%  $4.78 

Global Equity Fund

 $1,000.00  $1,018.10   1.00%  $5.06 

Global Equity Income Fund

 $1,000.00  $1,012.80   1.00%  $5.05 

Global Opportunities Value Fund

 $1,000.00  $956.67   1.15%  $5.64 

Emerging Markets Value Fund

 $1,000.00  $883.90   1.12%  $5.29 

International Small Cap Fund

 $1,000.00  $922.40   1.11%  $5.35 

Small Cap Value Fund

 $1,000.00  $1,076.50   0.90%  $4.68 

Core Plus Fixed Income Fund

 $1,000.00  $1,002.40   0.50%  $2.51 

 

  Class R6 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annual
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00  $989.60   0.82%  $4.09 

Emerging Markets Value Fund

 $1,000.00  $884.70   0.97%  $4.58 

International Small Cap Fund

 $1,000.00  $922.90   1.00%  $4.82 

Small Cap Value Fund

 $1,000.00  $1,078.60   0.72%  $3.75 

Core Plus Fixed Income Fund

 $1,000.00  $1,007.30   0.35%  $1.76 

 

*

Expenses are equal to the Fund’s expense ratio for the period, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

Hypothetical Example for Comparison Purposes

This section provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which are not the Funds’ actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as brokerage commissions on purchase and sales of Fund shares. Therefore, the last column of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

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  Class A 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annual
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00  $1,019.25   1.16%  $5.87 

Global Equity Fund

 $1,000.00  $1,018.80   1.25%  $6.33 

Global Equity Income Fund

 $1,000.00  $1,018.80   1.25%  $6.33 

Global Opportunities Value Fund

 $1,000.00  $1,018.05   1.40%  $7.08 

Emerging Markets Value Fund

 $1,000.00  $1,018.20   1.37%  $6.93 

International Small Cap Fund

 $1,000.00  $1,018.55   1.31%  $6.63 

Small Cap Value Fund

 $1,000.00  $1,019.30   1.15%  $5.82 

Core Plus Fixed Income Fund

 $1,000.00  $1,021.56   0.70%  $3.55 

 

  Class C 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annual
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00  $1,015.49   1.91%  $9.65 

Global Equity Fund

 $1,000.00  $1,015.04   2.00%  $10.10 

Global Equity Income Fund

 $1,000.00  $1,015.04   2.00%  $10.10 

Global Opportunities Value Fund

 $1,000.00  $1,014.29   2.15%  $10.86 

Emerging Markets Value Fund

 $1,000.00  $1,014.54   2.09%  $10.56 

International Small Cap Fund

 $1,000.00  $1,014.79   2.06%  $10.40 

 

  Class I 

Fund

 Beginning
Account
Value
  Ending
Account
Value
  Annual
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00  $1,020.26   0.96%  $4.86 

Global Equity Fund

 $1,000.00  $1,020.05   1.00%  $5.06 

Global Equity Income Fund

 $1,000.00  $1,020.05   1.00%  $5.06 

Global Opportunities Value Fund

 $1,000.00  $1,019.30   1.15%  $5.82 

Emerging Markets Value Fund

 $1,000.00  $1,019.45   1.12%  $5.67 

International Small Cap Fund

 $1,000.00  $1,019.55   1.11%  $5.62 

Small Cap Value Fund

 $1,000.00  $1,020.56   0.90%  $4.56 

Core Plus Fixed Income Fund

 $1,000.00  $1,022.56   0.50%  $2.54 

 

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  Class R6 

Fund

 Beginning
Account

Value
  Ending
Account
Value
  Annual
Expense
Ratio
  Expenses
Paid
During
the Period*
 

International Equity Fund

 $1,000.00  $1,020.96   0.82%  $4.15 

Emerging Markets Value Fund

 $1,000.00  $1,020.21   0.97%  $4.91 

International Small Cap Fund

 $1,000.00  $1,020.05   1.00%  $5.06 

Small Cap Value Fund

 $1,000.00  $1,021.46   0.72%  $3.65 

Core Plus Fixed Income Fund

 $1,000.00  $1,023.31   0.35%  $1.78 

 

*

Expenses are equal to the Fund’s expense ratio for the period, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

 

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SCHEDULE OF INVESTMENTS — September 30, 2018

 

 

 

Shares     Value 
 COMMON STOCKS – 87.01% 
 Brazil – 1.57% 
 596,835  Embraer SA Sponsored – ADR $11,691,998 
  

 

 

 
 China – 1.49% 
 1,126,500  China Mobile Ltd.  11,075,571 
  

 

 

 
 Finland – 1.78% 
 2,371,580  Nokia OYJ  13,185,417 
  

 

 

 
 France – 16.47% 
 991,394  Carrefour SA  19,002,029 
 263,195  Compagnie de Saint-Gobain SA  11,343,955 
 1,166,485  Engie SA  17,173,272 
 926,086  Orange SA  14,735,517 
 212,016  Publicis Groupe SA  12,661,636 
 83,270  Renault SA  7,203,013 
 301,093  Sanofi  26,901,805 
 92,441  Schneider Electric SE  7,422,727 
 63,963  Societe BIC SA  5,855,731 
  

 

 

 
   122,299,685 
  

 

 

 
 Hong Kong – 0.65% 
 9,774,000  First Pacific Co. Ltd.  4,819,214 
  

 

 

 
 Ireland – 2.01% 
 172,433  CRH Plc  5,643,053 
 153,735  Shire Plc  9,288,088 
  

 

 

 
   14,931,141 
  

 

 

 
 Italy – 5.93% 
 930,813  Eni SpA  17,545,417 
 4,105,973  Intesa Sanpaolo SpA  10,461,734 
 28,353,586  Telecom Italia Rsp  15,210,346 
 1,365,052  Telecom Italia SpA(a)  825,151 
  

 

 

 
   44,042,648 
  

 

 

 
 Japan – 12.79% 
 473,600  Dai Nippon Printing Co. Ltd.  11,018,685 
 129,802  Daiichi Sankyo Co. Ltd.  5,626,645 
 367,300  Honda Motor Co. Ltd.  11,061,702 
 676,600  Mitsubishi Tanabe Pharma Corp.  11,324,056 
Shares     Value 
 2,052,500  Mitsubishi UFJ Financial Group, Inc. $12,751,552 
 353,399  MS&AD Insurance Group Holdings, Inc.  11,804,931 
 760,700  Nissan Motor Co. Ltd.  7,118,275 
 276,700  Sumitomo Mitsui Trust Holdings, Inc.  11,385,228 
 45,500  Taisho Pharmaceutical Holdings Co. Ltd.  5,566,198 
 171,600  Takeda Pharmaceutical Co. Ltd.(b)  7,337,281 
  

 

 

 
   94,994,553 
  

 

 

 
 Mexico – 3.65% 
 1,677,470  Cemex SAB de CV Sponsored – ADR(a)  11,809,389 
 11,536,733  Fibra Uno Administracion SA de CV  15,257,782 
  

 

 

 
   27,067,171 
  

 

 

 
 Netherlands – 1.40% 
 1,606,333  Aegon NV  10,425,966 
  

 

 

 
 Russia – 3.12% 
 1,349,364  Mobile TeleSystems PJSC  5,612,801 
 139,363  Oil Company LUKOIL PJSC  10,683,368 
 42,300  Oil Company LUKOIL PJSC Sponsored – ADR  3,233,412 
 1,456,315  Public Joint-Stock Co. Gazprom  3,614,819 
  

 

 

 
   23,144,400 
  

 

 

 
 South Korea – 4.82% 
 148,067  Hana Financial Group, Inc.  5,945,304 
 56,792  Hyundai Mobis Co. Ltd.  11,673,271 
 49,795  Hyundai Motor Co.  5,812,506 
 77,269  KT&G Corp.  7,244,513 
 19,278  POSCO  5,117,284 
  

 

 

 
   35,792,878 
  

 

 

 
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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SCHEDULE OF INVESTMENTS — September 30, 2018 (continued)

 

 

 

Shares     Value 
 Spain – 1.71% 
 638,721  Repsol SA $12,715,215 
  

 

 

 
 Sweden – 0.98% 
 822,078  LM Ericsson Telefon AB – Class B  7,276,042 
  

 

 

 
 Switzerland – 6.58% 
 968,864  Credit Suisse Group AG  14,538,252 
 22,029  Roche Holding AG  5,326,952 
 69,697  Swatch Group Ltd. Registered  5,428,538 
 97,168  Swiss Resources AG  8,952,705 
 923,888  UBS Group AG  14,586,930 
  

 

 

 
   48,833,377 
  

 

 

 
 Taiwan – 1.32% 
 1,130,000  Asustek Computer, Inc.  9,775,469 
  

 

 

 
 United Kingdom – 20.74% 
 4,695,256  Barclays Plc  10,414,249 
 1,741,000  BP Plc  13,344,392 
 2,860,109  G4S Plc  9,021,120 
 1,280,970  GlaxoSmithKline Plc  25,689,629 
 646,991  HSBC Holdings Plc  5,645,278 
 273,504  Imperial Brands Plc  9,517,434 
Shares     Value 
 2,287,907  J Sainsbury Plc $9,585,234 
 3,833,863  Kingfisher Plc  12,963,231 
 3,887,893  Marks & Spencer Group Plc  14,628,049 
 4,302,647  Tesco Plc  13,452,359 
 3,535,297  Wm Morrison Supermarkets Plc  11,952,826 
 1,214,169  WPP Plc  17,781,081 
  

 

 

 
   153,994,882 
  

 

 

 
 

TOTAL COMMON STOCKS
(Cost $701,879,256)

 $646,065,627 
  

 

 

 
 PREFERRED STOCKS – 3.77% 
 Brazil – 2.45% 
 1,632,800  Petroleo Brasileiro SA $8,530,804 
 879,100  Telefonica Brasil SA  8,524,237 
 120,102  Telefonica Brasil SA Sponsored – ADR  1,168,593 
  

 

 

 
   18,223,634 
  

 

 

 
 Russia – 1.32% 
 16,855,053  Surgutneftegas PJSC  9,794,825 
  

 

 

 
 

TOTAL PREFERRED STOCKS
(Cost $25,755,761)

 $28,018,459 
  

 

 

 
 
   Principal
Amount
  Value 
REPURCHASE AGREEMENTS – 8.72%  

State Street Bank and Trust Repurchase Agreement,
(Dated 09/28/18), due 10/01/18, 0.42% [Collateralized
by $45,165,000 US Treasury Bond TIPS, 2.375%, 01/15/25,
(Market Value $66,042,566)] (proceeds $64,745,354)

 $64,743,088  $64,743,088 
  

 

 

 

TOTAL REPURCHASE AGREEMENTS
(Cost $64,743,088)

  $64,743,088 
  

 

 

 

Total Investments (Cost $792,378,105) – 99.50%

  $738,827,174 

Other Assets in Excess of Liabilities – 0.50%

   3,711,667 
  

 

 

 

TOTAL NET ASSETS – 100.00%

  $742,538,841 
  

 

 

 

 

Percentages are stated as a percent of net assets.

ADR American Depositary Receipt

TIPS Treasury Inflation-Protected Security

(a)

Non-income producing security.

(b)

All or a portion of this security is on loan. See Note 2 in the Notes to Financial Statements.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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SCHEDULE OF INVESTMENTS BY INDUSTRY — September 30, 2018

 

 

 

COMMON STOCKS

  

Aerospace & Defense

   1.57

Auto Components

   1.57

Automobiles

   4.20

Banks

   7.62

Biotechnology

   1.25

Building Products

   1.53

Capital Markets

   3.92

Commercial Services & Supplies

   3.49

Communications Equipment

   2.76

Construction Materials

   2.35

Diversified Financial Services

   0.65

Diversified Telecommunication Services

   4.14

Electrical Equipment

   1.00

Equity Real Estate Investment Trusts

   2.06

Food & Staples Retailing

   7.27

Insurance

   4.20

Media

   4.10

Metals & Mining

   0.69

Multiline Retail

   1.97

Multi-Utilities

   2.31

Oil, Gas & Consumable Fuels

   8.23

Pharmaceuticals

   11.82

Specialty Retail

   1.75

Technology Hardware, Storage & Peripherals

   1.32

Textiles, Apparel & Luxury Goods

   0.73

Tobacco

   2.26

Wireless Telecommunication Services

   2.25
  

 

 

 

TOTAL COMMON STOCKS

   87.01
  

 

 

 

PREFERRED STOCKS

  

Diversified Telecommunication Services

   1.30

Oil, Gas & Consumable Fuels

   2.47
  

 

 

 

TOTAL PREFERRED STOCKS

   3.77
  

 

 

 

REPURCHASE AGREEMENTS

   8.72
  

 

 

 

TOTAL INVESTMENTS

   99.50

Other Assets in Excess of Liabilities

   0.50
  

 

 

 

TOTAL NET ASSETS

   100.00
  

 

 

 

The industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standards (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC. This information is unaudited.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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SCHEDULE OF INVESTMENTS — September 30, 2018

 

 

 

Shares     Value 
 COMMON STOCKS – 97.11% 
 Austria – 1.50% 
 24,509  Erste Group Bank AG $1,017,534 
  

 

 

 
 Brazil – 2.14% 
 265,420  Embraer SA  1,303,260 
 7,378  Embraer SA Sponsored – ADR  144,535 
  

 

 

 
   1,447,795 
  

 

 

 
 China – 1.72% 
 118,500  China Mobile Ltd.  1,165,073 
  

 

 

 
 Finland – 1.73% 
 210,503  Nokia OYJ  1,170,346 
  

 

 

 
 France – 13.15% 
 35,434  Carrefour SA  679,163 
 79,376  Engie SA  1,168,593 
 31,200  Engie SA Registered Shares  459,334 
 16,723  Publicis Groupe SA  998,701 
 28,738  Sanofi  2,567,659 
 20,792  Schneider Electric SE  1,669,534 
 20,632  Total SA  1,341,507 
  

 

 

 
   8,884,491 
  

 

 

 
 Italy – 2.72% 
 67,899  Eni SpA  1,279,866 
 1,045,481  Telecom Italia Rsp  560,851 
  

 

 

 
   1,840,717 
  

 

 

 
 Japan – 3.44% 
 37,600  Honda Motor Co. Ltd.  1,132,371 
 127,000  Nissan Motor Co. Ltd.  1,188,407 
  

 

 

 
   2,320,778 
  

 

 

 
 Malaysia – 0.94% 
 336,100  Genting Berhad  634,195 
  

 

 

 
 Mexico – 1.25% 
 638,316  Fibra Uno Administracion SA de CV  844,198 
  

 

 

 
 Russia – 3.58% 
 24,494  Oil Company LUKOIL PJSC Sponsored – ADR  1,872,321 
 220,760  Public Joint-Stock Co. Gazprom  547,964 
  

 

 

 
   2,420,285 
  

 

 

 
Shares     Value 
 South Korea – 6.05% 
 4,950  Hyundai Mobis Co. Ltd. $1,017,444 
 11,771  Hyundai Motor Co.  1,374,014 
 7,830  KT&G Corp.  734,117 
 23,100  Samsung Electronics Co. Ltd.  966,755 
  

 

 

 
   4,092,330 
  

 

 

 
 Spain – 1.53% 
 51,965  Repsol SA  1,034,483 
  

 

 

 
 
Switzerland – 5.31%
 
 94,935  Credit Suisse Group AG  1,424,543 
 7,964  Swiss Resources AG  733,774 
 90,575  UBS Group AG  1,430,056 
  

 

 

 
   3,588,373 
  

 

 

 
 United Kingdom – 19.90% 
 228,395  Barclays Plc  506,588 
 292,575  BP Plc  2,242,525 
 121,138  GlaxoSmithKline Plc  2,429,401 
 73,244  HSBC Holdings Plc  639,086 
 53,968  Imperial Brands Plc  1,877,987 
 257,470  J Sainsbury Plc  1,078,676 
 254,571  Kingfisher Plc  860,767 
 248,544  Marks & Spencer Group Plc  935,137 
 425,924  Tesco Plc  1,331,664 
 174,125  Wm Morrison Supermarkets Plc  588,716 
 65,706  WPP Plc  962,241 
  

 

 

 
   13,452,788 
  

 

 

 
 United States – 32.15% 
 20,559  American International Group, Inc.  1,094,561 
 14,491  Apache Corp.  690,786 
 45,483  Bank of America Corp.  1,339,929 
 26,440  Bank of New York Mellon Corp.  1,348,176 
 26,811  Cardinal Health, Inc.  1,447,794 
 32,175  Citigroup, Inc.  2,308,235 
 13,056  Emerson Electric Co.  999,828 
 16,092  Express Scripts Holding Co.(a)  1,528,901 
 6,333  HCA Healthcare, Inc.  881,047 
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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SCHEDULE OF INVESTMENTS — September 30, 2018 (continued)

 

 

 

Shares     Value 
 36,368  Jefferies Financial Group, Inc. $798,641 
 10,105  McKesson Corp.  1,340,428 
 24,619  Merck & Co., Inc.  1,746,472 
 4,083  Microsoft Corp.  466,973 
 4,668  PepsiCo, Inc.  521,883 
 46,673  Pfizer, Inc.  2,056,879 
Shares     Value 
 6,294  PNC Financial Services Group, Inc. $857,180 
 9,775  State Street Corp.  818,949 
 28,404  Wells Fargo & Co.  1,492,914 
  

 

 

 
   21,739,576 
  

 

 

 
 

TOTAL COMMON STOCKS
(Cost $58,293,786)

 $65,652,962 
  

 

 

 
 
   Principal
Amount
  Value 
REPURCHASE AGREEMENTS – 2.96%  

State Street Bank and Trust Repurchase Agreement,
(Dated 09/28/18), due 10/01/18, 0.42% [Collateralized
by $1,400,000 US Treasury Bond TIPS, 2.375%, 01/15/25,
(Market Value $2,047,151)] (proceeds $2,004,488)

 $2,004,418  $2,004,418 
  

 

 

 

TOTAL REPURCHASE AGREEMENTS
(Cost $2,004,418)

  $2,004,418 
  

 

 

 

Total Investments (Cost $60,298,204) – 100.07%

  $67,657,380 

Liabilities in Excess of Other Assets – (0.07)%

   (44,597
  

 

 

 

TOTAL NET ASSETS – 100.00%

  $67,612,783 
  

 

 

 

 

Percentages are stated as a percent of net assets.

ADR American Depositary Receipt

TIPS Treasury Inflation-Protected Security

(a)

Non-income producing security.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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Brandes Global Equity Fund

SCHEDULE OF INVESTMENTS BY INDUSTRY — September 30, 2018

 

 

 

COMMON STOCKS

  

Aerospace & Defense

   2.14

Auto Components

   1.51

Automobiles

   5.47

Banks

   12.07

Beverages

   0.77

Capital Markets

   7.43

Communications Equipment

   1.73

Diversified Financial Services

   1.18

Diversified Telecommunication Services

   0.83

Electrical Equipment

   3.95

Equity Real Estate Investment Trusts

   1.25

Food & Staples Retailing

   5.44

Health Care Providers & Services

   7.69

Hotels, Restaurants & Leisure

   0.94

Insurance

   2.70

Media

   2.90

Multiline Retail

   1.38

Multi-Utilities

   2.41

Oil, Gas & Consumable Fuels

   13.33

Pharmaceuticals

   13.02

Software

   0.69

Specialty Retail

   1.27

Technology Hardware, Storage & Peripherals

   1.43

Tobacco

   3.86

Wireless Telecommunication Services

   1.72
  

 

 

 

TOTAL COMMON STOCKS

   97.11
  

 

 

 

REPURCHASE AGREEMENTS

   2.96
  

 

 

 

TOTAL INVESTMENTS

   100.07

Liabilities in Excess of Other Assets

   (0.07)% 
  

 

 

 

TOTAL NET ASSETS

   100.00
  

 

 

 

The industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standards (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC. This information is unaudited.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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SCHEDULE OF INVESTMENTS — September 30, 2018

 

 

 

Shares     Value 
 COMMON STOCKS – 86.06% 
 Brazil – 4.88% 
 4,800  Companhia Paranaense de Energia $24,009 
 4,790  Telefonica Brasil SA  43,766 
  

 

 

 
   67,775 
  

 

 

 
 China – 1.77% 
 2,500  China Mobile Ltd.  24,580 
  

 

 

 
 
Finland – 1.81%
 
 4,519  Nokia OYJ  25,124 
  

 

 

 
 France – 14.24% 
 2,583  Engie SA  38,027 
 400  Engie SA Registered Shares  5,889 
 461  Publicis Groupe SA  27,531 
 551  Sanofi  49,230 
 528  Schneider Electric SE  42,397 
 530  Total SA  34,461 
  

 

 

 
   197,535 
  

 

 

 
 Italy – 2.79% 
 2,057  Eni SpA  38,774 
  

 

 

 
 Japan – 2.17% 
 1,000  Honda Motor Co. Ltd.  30,116 
  

 

 

 
 Mexico – 2.70% 
 28,379  Fibra Uno Administracion SA de CV  37,532 
  

 

 

 
 South Korea – 1.63% 
 242  KT&G Corp.  22,689 
  

 

 

 
 Switzerland – 5.69% 
 1,434  Credit Suisse Group AG  21,518 
 240  Swiss Resources AG  22,113 
 2,237  UBS Group AG  35,319 
  

 

 

 
   78,950 
  

 

 

 
 United Kingdom – 23.95% 
 5,500  BP Plc  42,156 
 279  British American Tobacco Plc  13,007 
 2,390  GlaxoSmithKline Plc  47,931 
 2,038  HSBC Holdings Plc  17,782 
 1,027  Imperial Brands Plc  35,738 
 5,103  J Sainsbury Plc  21,379 
Shares     Value 
 9,934  Kingfisher Plc $33,590 
 4,816  Marks & Spencer Group Plc  18,120 
 814  Royal Dutch Shell Plc – Class A  27,911 
 8,470  Tesco Plc  26,482 
 4,210  Wm Morrison Supermarkets Plc  14,234 
 2,330  WPP Plc  34,122 
  

 

 

 
   332,452 
  

 

 

 
 United States – 24.43% 
 280  Bank of New York Mellon Corp.  14,277 
 234  BB&T Corp.  11,358 
 847  Cardinal Health, Inc.  45,738 
 421  Citigroup, Inc.  30,203 
 305  Emerson Electric Co.  23,357 
 175  Johnson & Johnson  24,180 
 646  Merck & Co., Inc.  45,827 
 129  Microsoft Corp.  14,754 
 130  PepsiCo, Inc.  14,534 
 964  Pfizer, Inc.  42,483 
 85  PNC Financial Services Group, Inc.  11,576 
 289  Procter & Gamble Co.  24,053 
 701  Wells Fargo & Co.  36,845 
  

 

 

 
   339,185 
  

 

 

 
 

TOTAL COMMON STOCKS
(Cost $1,135,512)

 $1,194,712 
  

 

 

 
 PREFERRED STOCKS – 9.65% 
 South Korea – 1.81% 
 736  Samsung Electronics Co. Ltd. $25,103 
  

 

 

 
 United States – 7.84% 
 1,488  Bank of America Corp., 4.000% (3M LIBOR + 0.500%, minimum of 4.000%)(a)  36,382 
 1,610  Goldman Sachs Group, Inc., 3.750% (3M LIBOR + 0.750%, minimum of 3.750%)(a)  36,547 
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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Brandes Global Equity Income Fund

SCHEDULE OF INVESTMENTS — September 30, 2018 (continued)

 

 

 

Shares     Value 
 1,588  Morgan Stanley, 4.000% (3M LIBOR + 0.700%, minimum of 4.000%)(a) $35,952 
  

 

 

 
   108,881 
  

 

 

 
 

TOTAL PREFERRED STOCKS
(Cost $114,547)

 $133,984 
  

 

 

 
 

Total Investments
(Cost $1,250,059) – 95.71%

 $1,328,696 
 

Other Assets in Excess of
Liabilities – 4.29%

  59,537 
  

 

 

 
 

TOTAL NET ASSETS – 100.00%

 $1,388,233 
  

 

 

 

 

Percentages are stated as a percent of net assets.

 

LIBOR London Inter-bank Offered Rate

(a)

Variable rate security. This coupon is based on a reference index and spread.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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Brandes Global Equity Income Fund

SCHEDULE OF INVESTMENTS BY INDUSTRY — September 30, 2018

 

 

 

COMMON STOCKS

  

Automobiles

   2.17

Banks

   7.76

Beverages

   1.05

Capital Markets

   5.12

Communications Equipment

   1.81

Diversified Telecommunication Services

   3.15

Electric Utilities

   1.73

Electrical Equipment

   4.74

Equity Real Estate Investment Trusts

   2.71

Food & Staples Retailing

   4.47

Health Care Providers & Services

   3.30

Household Products

   1.73

Insurance

   1.59

Media

   4.44

Multiline Retail

   1.31

Multi-Utilities

   3.16

Oil, Gas & Consumable Fuels

   10.32

Pharmaceuticals

   15.10

Software

   1.06

Specialty Retail

   2.42

Tobacco

   5.15

Wireless Telecommunication Services

   1.77
  

 

 

 

TOTAL COMMON STOCKS

   86.06
  

 

 

 

PREFERRED STOCKS

  

Banks

   2.62

Capital Markets

   5.22

Technology Hardware, Storage & Peripherals

   1.81
  

 

 

 

TOTAL PREFERRED STOCKS

   9.65
  

 

 

 

TOTAL INVESTMENTS

   95.71

Other Assets in Excess of Liabilities

   4.29
  

 

 

 

TOTAL NET ASSETS

   100.00
  

 

 

 

The industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standards (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC. This information is unaudited.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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Brandes Global Opportunities Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2018

 

 

 

Shares     Value 
 COMMON STOCKS – 88.99% 
 Brazil – 5.98% 
 59,500  Companhia Paranaense de Energia $297,607 
 40,769  Embraer SA Sponsored – ADR  798,665 
 174,000  Marfrig Global Foods SA(a)  227,057 
 51,400  Telefonica Brasil SA  469,639 
  

 

 

 
   1,792,968 
  

 

 

 
 Canada – 1.06% 
 15,871  Sierra Wireless, Inc.(a)  319,841 
  

 

 

 
 China – 3.16% 
 80,500  China Mobile Ltd.  791,463 
 9,213  China Yuchai International Ltd.  159,109 
  

 

 

 
   950,572 
  

 

 

 
 France – 8.30% 
 30,022  Carrefour SA  575,430 
 27,748  Engie SA  408,513 
 4,400  Engie SA Registered Shares  64,778 
 7,877  Publicis Groupe SA  470,416 
 8,336  Sanofi  744,798 
 2,868  Schneider Electric SE  230,292 
  

 

 

 
   2,494,227 
  

 

 

 
 Greece – 1.00% 
 32,499  Grivalia Properties Real Estate Investment Co. SA  300,674 
  

 

 

 
 Hong Kong – 0.77% 
 471,340  First Pacific Co. Ltd.  232,401 
  

 

 

 
 Hungary – 0.76% 
 159,338  Magyar Telekom Telecommunications Plc  228,783 
  

 

 

 
 India – 1.02% 
 24,572  Reliance Infrastructure Ltd. Sponsored – GDR  305,277 
  

 

 

 
 Ireland – 1.43% 
 111,672  C&C Group Plc  429,164 
  

 

 

 
Shares     Value 
 Italy – 2.41% 
 15,841  Eni SpA $298,596 
 791,223  Telecom Italia Rsp  424,453 
  

 

 

 
   723,049 
  

 

 

 
 Japan – 6.28% 
 15,800  Honda Motor Co. Ltd.  475,837 
 12,000  Kissei Pharmaceutical Co. Ltd.  380,492 
 48,700  Nissan Motor Co. Ltd.  455,712 
 3,200  NuFlare Technology, Inc.  165,954 
 15,900  Tachi-S Co. Ltd.  237,904 
 23,600  TSI Holdings Co. Ltd.  171,965 
  

 

 

 
   1,887,864 
  

 

 

 
 Mexico – 6.78% 
 57,514  Cemex SAB de CV Sponsored – ADR(a)  404,899 
 1,623,663  Consorcio ARA SAB de CV  591,716 
 417,915  Fibra Uno Administracion SA de CV  552,709 
 407,130  Macquarie Mexico Real Estate Management SA de CV  487,973 
  

 

 

 
   2,037,297 
  

 

 

 
 Russia – 3.86% 
 4,418  Oil Company LUKOIL PJSC Sponsored – ADR  337,712 
 78,016  Public Joint-Stock Co. Gazprom Sponsored – ADR  387,740 
 98,625  Sberbank of Russia OJSC  306,091 
 960,903  Sistema PJSFC  127,610 
  

 

 

 
   1,159,153 
  

 

 

 
 South Korea – 5.22% 
 2,404  Hyundai Mobis Co. Ltd.  494,128 
 3,217  KT&G Corp.  301,616 
 202  Lotte Chilsung Beverage Co. Ltd.  253,490 
 4,296  Lotte Corp.(a)  221,151 
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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Brandes Global Opportunities Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2018 (continued)

 

 

 

Shares     Value 
 7,095  Samsung Electronics Co. Ltd. $296,932 
  

 

 

 
   1,567,317 
  

 

 

 
 Spain – 0.91% 
 43,807  Atresmedia Corp de Medios de Comunicacion SA  271,872 
  

 

 

 
 Switzerland – 3.14% 
 31,615  Credit Suisse Group AG  474,398 
 29,667  UBS Group AG  468,401 
  

 

 

 
   942,799 
  

 

 

 
 United Kingdom – 19.59% 
 124,427  Barclays Plc  275,984 
 41,817  BP Plc  320,518 
 2,076,529  Countrywide Plc(a)  317,750 
 71,882  De La Rue Plc  451,592 
 837,480  Debenhams Plc  106,756 
 35,193  GlaxoSmithKline Plc  705,789 
 14,636  Imperial Brands Plc  509,306 
 89,247  J Sainsbury Plc  373,902 
 128,503  Kingfisher Plc  434,500 
 77,968  LSL Property Services Plc  270,301 
 129,176  Marks & Spencer Group Plc  486,020 
 225,154  Mitie Group Plc  430,517 
 117,920  Tesco Plc  368,681 
 112,528  Wm Morrison Supermarkets Plc  380,457 
 30,843  WPP Plc  451,685 
  

 

 

 
   5,883,758 
  

 

 

 
 United States – 17.32% 
 5,827  American International Group, Inc.  310,229 
Shares     Value 
 27,271  Briggs & Stratton Corp. $524,421 
 9,617  Cardinal Health, Inc.  519,318 
 7,062  Citigroup, Inc.  506,629 
 7,714  Edgewell Personal Care Co.(a)  356,618 
 3,188  Express Scripts Holding Co.(a)  302,892 
 13,402  Jefferies Financial Group, Inc.  294,308 
 3,380  McKesson Corp.  448,357 
 31,323  Owens & Minor, Inc.  517,456 
 29,757  St. Joe Co.(a)  499,918 
 2,412  State Street Corp.  202,077 
 6,189  Wells Fargo & Co.  325,294 
 14,333  World Fuel Services Corp.  396,737 
  

 

 

 
   5,204,254 
  

 

 

 
 

TOTAL COMMON STOCKS
(Cost $27,648,393)

 $26,731,270 
  

 

 

 
 PREFERRED STOCKS – 5.98% 
 Brazil – 2.45% 
 15,000  Companhia Brasileira de Distribuicao $323,099 
 79,240  Petroleo Brasileiro SA  414,001 
  

 

 

 
   737,100 
  

 

 

 
 Russia – 1.63% 
 843,862  Surgutneftegas PJSC  490,386 
  

 

 

 
 South Korea – 1.90% 
 8,082  Hyundai Motor Co. Ltd.  570,445 
  

 

 

 
 

TOTAL PREFERRED STOCKS
(Cost $1,664,960)

 $1,797,931 
  

 

 

 
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

74


Table of Contents

Brandes Global Opportunities Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2018 (continued)

 

 

 

   Principal
Amount
  Value 
REPURCHASE AGREEMENTS – 4.72%  

State Street Bank and Trust Repurchase Agreement,
(Dated 09/28/18), due 10/01/18, 0.42% [Collateralized
by $990,000 US Treasury Bond TIPS, 2.375%, 01/15/25,
(Market Value $1,447,628)] (proceeds $1,417,821)

 $1,417,771  $1,417,771 
  

 

 

 

TOTAL REPURCHASE AGREEMENTS
(Cost $1,417,771)

  $1,417,771 
  

 

 

 

Total Investments (Cost $30,731,124) – 99.69%

  $29,946,972 

Other Assets in Excess of Liabilities – 0.31%

   93,249 
  

 

 

 

TOTAL NET ASSETS – 100.00%

  $30,040,221 
  

 

 

 

 

Percentages are stated as a percent of net assets.

ADR American Depositary Receipt

GDR Global Depositary Receipt

TIPS Treasury Inflation-Protected Security

(a)

Non-income producing security.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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Table of Contents

Brandes Global Opportunities Value Fund

SCHEDULE OF INVESTMENTS BY INDUSTRY — September 30, 2018

 

 

 

COMMON STOCKS

  

Aerospace & Defense

   2.66

Auto Components

   2.44

Automobiles

   3.10

Banks

   4.71

Beverages

   2.27

Capital Markets

   3.81

Commercial Services & Supplies

   2.94

Communications Equipment

   1.06

Construction Materials

   1.35

Diversified Financial Services

   1.75

Diversified Telecommunication Services

   3.74

Electric Utilities

   2.01

Electrical Equipment

   0.77

Equity Real Estate Investment Trusts

   4.46

Food & Staples Retailing

   5.65

Food Products

   0.76

Health Care Providers & Services

   5.95

Household Durables

   1.97

Industrial Conglomerates

   0.74

Insurance

   1.03

Machinery

   2.28

Media

   3.97

Multiline Retail

   1.97

Multi-Utilities

   1.58

Oil, Gas & Consumable Fuels

   5.80

Personal Products

   1.19

Pharmaceuticals

   6.09

Real Estate Management & Development

   3.62

Semiconductors & Semiconductor Equipment

   0.55

Specialty Retail

   1.45

Technology Hardware, Storage & Peripherals

   0.99

Textiles, Apparel & Luxury Goods

   0.57

Tobacco

   2.70

Wireless Telecommunication Services

   3.06
  

 

 

 

TOTAL COMMON STOCKS

   88.99
  

 

 

 

PREFERRED STOCKS

  

Automobiles

   1.90

Food & Staples Retailing

   1.07

Oil, Gas & Consumable Fuels

   3.01
  

 

 

 

TOTAL PREFERRED STOCKS

   5.98
  

 

 

 

REPURCHASE AGREEMENTS

   4.72
  

 

 

 

TOTAL INVESTMENTS

   99.69

Other Assets in Excess of Liabilities

   0.31
  

 

 

 

TOTAL NET ASSETS

   100.00
  

 

 

 

The industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standards (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC. This information is unaudited.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

76


Table of Contents

Brandes Emerging Markets Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2018

 

 

 

Shares     Value 
 COMMON STOCKS – 86.38% 
 Argentina – 3.33% 
 1,176,931  Adecoagro SA(a) $8,650,443 
 2,625,116  YPF SA Sponsored – Class D – ADR(a)  40,558,041 
  

 

 

 
   49,208,484 
  

 

 

 
 Brazil – 10.39% 
 2,764,947  AES Tiete Energia SA  6,538,298 
 5,180,100  Cielo SA  15,648,493 
 800,010  Companhia Paranaense de Energia  4,001,486 
 2,344,490  Embraer SA Sponsored – ADR  45,928,559 
 4,202,093  Estacio Participacoes SA  26,012,387 
 1,410,700  Hapvida Participacoes e Investimentos SA(a)(c)  8,383,405 
 5,600,500  Kroton Educacional SA  15,698,124 
 11,489,411  Marfrig Global Foods SA(a)  14,992,806 
 3,366,600  Petrobras Distribuidora SA  16,230,504 
  

 

 

 
   153,434,062 
  

 

 

 
 Chile – 1.28% 
 1,339,920  Empresa Nacional de Telecomunicaciones SA  11,390,140 
 1,509,388  Enel Chile SA Sponsored – ADR  7,562,034 
  

 

 

 
   18,952,174 
  

 

 

 
 China – 11.50% 
 130,305,000  Bosideng International Holdings Ltd.  18,289,356 
 16,438,000  China Construction Bank Corp.  14,368,465 
 6,940,400  China Mobile Ltd.  68,236,922 
Shares     Value 
 12,415,000  China Railway Signal & Communication Corp. Ltd.(c) $8,783,895 
 173,073  China Yuchai International Ltd.  2,988,971 
 34,409,000  Dongfeng Motor Group Co. Ltd. – Class H  35,458,739 
 22,677,000  Genertec Universal Medical Group Co. Ltd.(c)  17,391,606 
 12,307,077  Weiqiao Textile Co. Ltd. – Class H  4,323,427 
  

 

 

 
   169,841,381 
  

 

 

 
 Colombia – 1.12% 
 2,127,094  Grupo Aval Acciones y Valores Grupo Sponsored – ADR  16,506,249 
  

 

 

 
 Czech Republic – 0.66% 
 841,213  O2 Czech Republic AS  9,817,712 
  

 

 

 
 Greece – 0.91% 
 1,092,183  Hellenic Telecommunications Organization SA  13,392,141 
  

 

 

 
 Hong Kong – 4.47% 
 28,461,920  First Pacific Co. Ltd.  14,033,568 
 9,809,500  Lifestyle International Holdings Ltd.  19,236,785 
 4,316,000  Luk Fook Holdings International Ltd.  15,017,657 
 6,400,000  Yue Yuen Industrial Holdings Ltd.  17,791,899 
  

 

 

 
   66,079,909 
  

 

 

 
 India – 2.84% 
 720,318  Infosys Ltd.  7,236,192 
 6,287,001  Power Grid Corp of India Ltd.  16,353,046 
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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Table of Contents

Brandes Emerging Markets Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2018 (continued)

 

 

 

Shares     Value 
 4,433,822  Reliance Infrastructure Ltd. $18,375,662 
  

 

 

 
   41,964,900 
  

 

 

 
 Indonesia – 4.01% 
 139,220,100  Bank Rakyat Indonesia Persero Tbk PT  29,419,804 
 160,739,115  PT XL Axiata Tbk(a)  29,761,080 
  

 

 

 
   59,180,884 
  

 

 

 
 Malaysia – 1.94% 
 15,157,500  Genting Berhad  28,601,051 
  

 

 

 
 Mexico – 10.14% 
 8,397,536  Cemex SAB de CV Sponsored – ADR(a)  59,118,653 
 31,381,662  Fibra Uno Administracion SA de CV  41,503,481 
 17,287,809  Fideicomiso PLA Administradora Industrial S de RL de CV  26,549,729 
 17,197,456  Macquarie Mexico Real Estate Management SA de CV  20,612,319 
 10,242,449  Urbi Desarrollos Urbanos SA de CV(a)(d)  1,970,333 
  

 

 

 
   149,754,515 
  

 

 

 
 Pakistan – 0.59% 
 7,646,760  Nishat Mills Ltd.  8,657,256 
  

 

 

 
 Panama – 0.91% 
 644,836  Banco Latinoamericano de Comercio Exterior SA – Class E  13,489,969 
  

 

 

 
 Russia – 8.59% 
 5,841,739  Mobile TeleSystems PJSC  24,299,239 
Shares     Value 
 224,849  Oil Company LUKOIL PJSC Sponsored – ADR $17,187,458 
 5,318,206  Public Joint-Stock Co. Gazprom  13,200,681 
 3,562,742  Public Joint-Stock Co. Gazprom Sponsored – ADR  17,706,828 
 8,610,616  Sberbank of Russia OJSC  26,723,804 
 2,684,906  Sistema JSFC Sponsored – GDR  7,055,933 
 919,169  X5 Retail Group NV – GDR  20,796,599 
  

 

 

 
   126,970,542 
  

 

 

 
 South Africa – 0.93% 
 1,280,399  Absa Group Ltd.  13,732,526 
  

 

 

 
 South Korea – 11.83% 
 163,537  Hyundai Mobis Co. Ltd.  33,614,096 
 824,543  KIA Motors Corp.  26,081,892 
 460,670  KT&G Corp.  43,191,057 
 50,851  POSCO  13,498,236 
 306,830  S-1 Corp.  25,282,184 
 610,691  Samsung Electronics Co. Ltd.  25,557,953 
 185,013  Shinhan Financial Group Co. Ltd.  7,476,101 
  

 

 

 
   174,701,519 
  

 

 

 
 Spain – 0.93% 
 6,246,765  Prosegur Cash SA(c)  13,693,288 
  

 

 

 
 Taiwan – 1.57% 
 2,689,000  Asustek Computer, Inc.  23,262,155 
  

 

 

 
 Thailand – 3.80% 
 2,794,200  Bangkok Bank Plc – NVDR  18,148,376 
 50,122,400  Jasmine Broadband Internet Infrastructure – Class F  16,273,506 
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

78


Table of Contents

Brandes Emerging Markets Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2018 (continued)

 

 

 

Shares     Value 
 4,718,300  Siam Commercial Bank PCL $21,737,459 
  

 

 

 
   56,159,341 
  

 

 

 
 Turkey – 2.32% 
 7,785,133  Akbank T.A.S.  8,917,358 
 59,155,342  Emlak Konut Gayrimenkul Yatirim Ortakligi AG  17,496,998 
 6,223,640  Turkiye Garanti Bankasi Anonim Sirketi  7,934,803 
  

 

 

 
   34,349,159 
  

 

 

 
 United Kingdom – 2.32% 
 22,007,865  ITE Group Plc  20,653,350 
 8,135,315  Vivo Energy Plc(c)  13,687,162 
  

 

 

 
   34,340,512 
  

 

 

 
 

TOTAL COMMON STOCKS
(Cost $1,438,574,641)

 $1,276,089,729 
  

 

 

 
 PREFERRED STOCKS – 10.99% 
 Brazil – 6.56% 
 1,744,100  Companhia Brasileira de Distribuicao $37,567,756 
 2,073,150  Companhia Paranaense de Energia – COPEL B  10,990,614 
 2,760  Companhia Paranaense de Energia Sponsored ADR – Class B  14,545 
 4,477,000  Petroleo Brasileiro SA  23,390,747 
Shares     Value 
 995,451  Petroleo Brasileiro Sponsored – ADR $10,412,417 
 498,300  Telefonica Brasil SA  4,831,791 
 1,004,568  Telefonica Brasil SA Sponsored – ADR  9,774,446 
  

 

 

 
   96,982,316 
  

 

 

 
 Colombia – 0.43% 
 15,974,350  Grupo Aval Acciones y Valores SA  6,281,260 
  

 

 

 
 Russia – 2.02% 
 32,081,832  Surgutneftegas PJSC  18,643,426 
 1,977,282  Surgutneftegas PJSC Sponsored – ADR  11,270,507 
  

 

 

 
   29,913,933 
  

 

 

 
 South Korea – 1.98% 
 413,848  Hyundai Motor Co. Ltd.  29,210,291 
  

 

 

 
 

TOTAL PREFERRED
STOCKS
(Cost $166,114,031)

 $162,387,800 
  

 

 

 
 PARTICIPATORY NOTES – 0.94% 
 China – 0.94% 
 7,936,516  China South Publishing & Media Group Co. Ltd.(a)(b)(c)(e) $13,928,570 
  

 

 

 
 

TOTAL PARTICIPATORY
NOTES
(Cost $15,164,834)

 $13,928,570 
 

 

 

 
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

79


Table of Contents

Brandes Emerging Markets Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2018 (continued)

 

 

 

   Principal
Amount
  Value 
REPURCHASE AGREEMENTS – 1.05%  

State Street Bank and Trust Repurchase Agreement,
(Dated 09/28/18), due 10/01/18, 0.42% [Collateralized
by $10,810,000 US Treasury Bond TIPS, 2.375%, 01/15/25,
(Market Value $15,806,933)] (proceeds $15,495,191)

 $15,494,648  $15,494,648 
  

 

 

 

TOTAL REPURCHASE AGREEMENTS
(Cost $15,494,648)

  $15,494,648 
  

 

 

 

Total Investments (Cost $1,635,348,154) – 99.36%

  $1,467,900,747 

Other Assets in Excess of Liabilities – 0.64%

   9,407,278 
  

 

 

 

TOTAL NET ASSETS – 100.00%

  $1,477,308,025 
  

 

 

 

 

Percentages are stated as a percent of net assets.

ADR American Depositary Receipt

GDR Global Depositary Receipt

NVDR Non-Voting Depositary Receipt

TIPS Treasury Inflation-Protected Security

(a)

Non-income producing security.

(b)

The price for this security was derived from an estimate of fair market value using methods approved by the Fund’s Board of Trustees. This security represents $13,928,570 or 0.94% of the Fund’s net assets and is classified as a Level 2 security. See Note 2 in the Notes to Financial Statements.

(c)

Acquired in a transaction exempt from registration under Rule 144A or Section 4(a)(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $75,867,926, which represented 5.14% of the net assets of the Fund.

(d)

Affiliated issuer. See Note 8 in the Notes to Financial Statements.

(e)

Represents the underlying security of a participatory note with HSBC Bank Plc. China South Publishing & Media Group Co. Ltd. has a maturity date of November 23, 2021. See Note 2 in the Notes to Financial Statements.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

80


Table of Contents

Brandes Emerging Markets Value Fund

SCHEDULE OF INVESTMENTS BY INDUSTRY — September 30, 2018

 

 

 

COMMON STOCKS

  

Aerospace & Defense

   3.11

Auto Components

   2.28

Automobiles

   4.17

Banks

   11.17

Commercial Services & Supplies

   2.64

Construction Materials

   4.00

Diversified Consumer Services

   2.82

Diversified Financial Services

   1.86

Diversified Telecommunication Services

   1.57

Electric Utilities

   3.13

Electronic Equipment, Instruments & Components

   0.59

Equity Real Estate Investment Trusts

   8.29

Food & Staples Retailing

   1.41

Food Products

   1.60

Health Care Providers & Services

   1.75

Hotels, Restaurants & Leisure

   1.94

Household Durables

   0.13

Independent Power and Renewable Electricity Producers

   0.44

IT Services

   1.55

Machinery

   0.20

Media

   1.40

Metals & Mining

   0.91

Multiline Retail

   1.30

Oil, Gas & Consumable Fuels

   6.00

Specialty Retail

   3.04

Technology Hardware, Storage & Peripherals

   3.31

Textiles, Apparel & Luxury Goods

   3.32

Tobacco

   2.92

Wireless Telecommunication Services

   9.53
  

 

 

 

TOTAL COMMON STOCKS

   86.38
  

 

 

 

PREFERRED STOCKS

  

Automobiles

   1.98

Banks

   0.43

Diversified Telecommunication Services

   0.99

Electric Utilities

   0.74

Food & Staples Retailing

   2.54

Oil, Gas & Consumable Fuels

   4.31
  

 

 

 

TOTAL PREFERRED STOCKS

   10.99
  

 

 

 

PARTICIPATORY NOTES

  

Media

   0.94
  

 

 

 

TOTAL PARTICIPATORY NOTES

   0.94
  

 

 

 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

81


Table of Contents

Brandes Emerging Markets Value Fund

SCHEDULE OF INVESTMENTS BY INDUSTRY — September 30, 2018 (continued)

 

 

 

REPURCHASE AGREEMENTS

   1.05
  

 

 

 

TOTAL INVESTMENTS

   99.36

Other Assets in Excess of Liabilities

   0.64
  

 

 

 

TOTAL NET ASSETS

   100.00
  

 

 

 

The industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standards (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC. This information is unaudited.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

82


Table of Contents

Brandes International Small Cap Equity Fund

SCHEDULE OF INVESTMENTS — September 30, 2018

 

 

 

Shares     Value 
 COMMON STOCKS – 87.77% 
 Argentina – 0.49% 
 747,930  Adecoagro SA(a) $5,497,286 
  

 

 

 
 Belgium – 1.48% 
 380,483  D’Ieteren SA  16,751,519 
  

 

 

 
 Brazil – 4.62% 
 2,238,116  AES Tiete Energia SA  5,292,496 
 7,603,647  Embraer SA  37,335,261 
 4,297,724  Marfrig Global Foods SA(a)  5,608,202 
 8,911,000  Mills Estruturas e Servicos de Engenharia SA(a)(b)  4,104,062 
  

 

 

 
   52,340,021 
  

 

 

 
 Canada – 5.37% 
 557,651  Cameco Corp.  6,357,221 
 1,605,023  Celestica, Inc.(a)  17,382,399 
 1,394,763  Dorel Industries, Inc. – Class B(a)  24,717,319 
 610,675  Sierra Wireless, Inc.(a)  12,306,639 
  

 

 

 
   60,763,578 
  

 

 

 
 China – 0.96% 
 21,464,900  Boyaa Interactive International Ltd.(a)  5,131,584 
 16,341,500  Weiqiao Textile Co. Ltd. – Class H  5,740,704 
  

 

 

 
   10,872,288 
  

 

 

 
 France – 2.06% 
 67,039  Savencia SA  5,106,014 
 199,354  Societe BIC SA  18,250,604 
  

 

 

 
   23,356,618 
  

 

 

 
 Germany – 2.06% 
 156,726  Draegerwerk AG & Co. KGaA  9,357,348 
 544,923  Rhoen-Klinikum AG  14,007,587 
  

 

 

 
   23,364,935 
  

 

 

 
 Greece – 1.67% 
 638,814  GR Sarantis SA  5,502,472 
Shares     Value 
 1,450,970  Grivalia Properties Real Estate Investment Co. SA $13,424,076 
  

 

 

 
   18,926,548 
  

 

 

 
 Hong Kong – 4.14% 
 15,204,050  APT Satellite Holdings Ltd.  5,476,942 
 10,889,500  Dickson Concepts International Ltd.  4,883,505 
 194,910,000  Emperor Watch & Jewellery Ltd.  7,678,931 
 23,378,000  First Pacific Co. Ltd.  11,526,867 
 22,106,000  PAX Global Technology Ltd.  11,224,786 
 18,358,000  Sinotrans Shipping Ltd.  6,047,389 
  

 

 

 
   46,838,420 
  

 

 

 
 
Hungary – 1.85%
 
 14,543,368  Magyar Telekom Telecommunications Plc  20,881,891 
  

 

 

 
 
India – 1.21%
 
 3,300,999  Reliance Infrastructure Ltd.  13,680,757 
  

 

 

 
 
Indonesia – 0.84%
 
 51,392,000  PT XL Axiata Tbk(a)  9,515,303 
  

 

 

 
 
Ireland – 4.54%
 
 1,924,883  Avadel Pharmaceuticals Plc Sponsored – ADR(a)  8,450,236 
 11,182,473  C&C Group Plc  42,975,056 
  

 

 

 
   51,425,292 
  

 

 

 
 
Japan – 20.18%
 
 229,100  Bank of Nagoya Ltd.  7,702,509 
 173,700  Denki Kogyo Co. Ltd.  5,109,048 
 1,513,800  Funai Electric Co. Ltd.(a)  8,768,252 
 162,300  Futaba Corp.  2,920,798 
 4,349,100  Hachijuni Bank Ltd.  19,934,228 
 4,619,900  Hyakugo Bank Ltd.  18,668,960 
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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Brandes International Small Cap Equity Fund

SCHEDULE OF INVESTMENTS — September 30, 2018 (continued)

 

 

 

Shares     Value 
 639,700  Kato Sangyo Co. Ltd. $21,569,917 
 709,300  Kissei Pharmaceutical Co. Ltd.  22,490,230 
 1,947,400  Komori Corp.  24,263,301 
 309,100  Nippon Seiki Co. Ltd.  5,858,827 
 187,800  NuFlare Technology, Inc.  9,739,446 
 230,300  Oita Bank Ltd.  8,383,779 
 120,100  Sanki Engineering Co. Ltd.  1,290,270 
 706,700  Tachi-S Co. Ltd.  10,573,993 
 448,100  Torii Pharmaceutical Co. Ltd.  10,782,322 
 1,002,800  Toyo Suisan Kaisha Ltd.  38,931,129 
 812,200  TSI Holdings Co. Ltd.  5,918,218 
 283,700  Tsutsumi Jewelry Co. Ltd.  5,478,177 
  

 

 

 
   228,383,404 
  

 

 

 
 
Mexico – 5.22%
 
 40,473,212  Consorcio ARA SAB de CV  14,749,776 
 279,501,983  Desarrolladora Homex SAB de CV(a)(b)  4,450,764 
 17,444,971  Fibra Uno Administracion SA de CV  23,071,659 
 11,929,454  Macquarie Mexico Real Estate Management SA de CV  14,298,261 
 12,867,533  Urbi Desarrollos Urbanos SA de CV(a)(b)  2,475,319 
  

 

 

 
   59,045,779 
  

 

 

 
 
Philippines – 0.76%
 
 7,220,750  First Philippine Holdings Corp.  8,619,996 
  

 

 

 
 
Russia – 0.57%
 
 48,176,158  Sistema PJSFC  6,397,890 
  

 

 

 
Shares     Value 
 
South Korea – 9.36%
 
 172,998  Binggrae Co. Ltd. $11,760,082 
 1,244,944  Korean Reinsurance Co.  11,729,662 
 9,596  Lotte Chilsung Beverage Co. Ltd.  12,042,039 
 75,183  Lotte Confectionery Co. Ltd.  12,239,702 
 541,581  Lotte Corp.(a)  27,879,684 
 11,242  Namyang Dairy Products Co. Ltd.  6,567,335 
 127,829  S-1 Corp.  10,532,856 
 140,287  Samchully Co. Ltd.  13,150,652 
  

 

 

 
   105,902,012 
  

 

 

 
 Spain – 2.76% 
 2,693,152  Atresmedia Corp de Medios de Comunicacion SA  16,714,043 
 1,428,227  Lar Espana Real Estate SOCIMI SA  14,542,780 
  

 

 

 
   31,256,823 
  

 

 

 
 United Kingdom – 17.63% 
 3,028,206  Balfour Beatty Plc  10,803,013 
 114,155,463  Countrywide Plc(a)(b)  17,468,068 
 2,680,092  De La Rue Plc  16,837,470 
 55,797,888  Debenhams Plc  7,112,736 
 14,261,904  ITE Group Plc  13,384,129 
 8,098,143  J Sainsbury Plc  33,927,337 
 3,905,568  LSL Property Services Plc  13,539,888 
 10,545,222  Mitie Group Plc  20,163,500 
 15,790,851  Premier Foods Plc(a)  8,716,438 
 6,570,200  Spirent Communications Plc  11,560,921 
 5,476,326  Telit Communications Plc(a)  12,327,122 
 9,950,526  Wm Morrison Supermarkets Plc  33,642,692 
  

 

 

 
   199,483,314 
  

 

 

 
 

TOTAL COMMON STOCKS
(Cost $1,091,370,783)

 $993,303,674 
  

 

 

 
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

84


Table of Contents

Brandes International Small Cap Equity Fund

SCHEDULE OF INVESTMENTS — September 30, 2018 (continued)

 

 

 

Shares     Value 
 PREFERRED STOCKS – 2.93% 
 Brazil – 1.55% 
 3,300,349  Companhia Paranaense de Energia – COPEL B $17,496,496 
  

 

 

 
 Germany – 1.38% 
 246,073  Draegerwerk AG & Co. KGaA  15,607,961 
  

 

 

 
 

TOTAL PREFERRED
STOCKS
(Cost $42,186,147)

 $33,104,457 
  

 

 

 
 
   Principal
Amount
  Value 
REPURCHASE AGREEMENTS – 8.47%  

State Street Bank and Trust Repurchase Agreement,
(Dated 09/28/18), due 10/01/18, 0.42% [Collateralized
by $66,880,000 US Treasury Bond TIPS, 2.375%, 01/15/25,
(Market Value $97,795,347)] (proceeds $95,880,933)

 $95,877,577  $95,877,577 
  

 

 

 

TOTAL REPURCHASE AGREEMENTS
(Cost $95,877,577)

  $95,877,577 
  

 

 

 

Total Investments (Cost $1,229,434,507) – 99.17%

  $1,122,285,708 

Other Assets in Excess of Liabilities – 0.83%

   9,442,598 
  

 

 

 

TOTAL NET ASSETS – 100.00%

  $1,131,728,306 
  

 

 

 

 

Percentages are stated as a percent of net assets.

ADR American Depositary Receipt

TIPS Treasury Inflation-Protected Security

(a)

Non-income producing security.

(b)

Affiliated issuer. See Note 8 in the Notes to Financial Statements.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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Brandes International Small Cap Equity Fund

SCHEDULE OF INVESTMENTS BY INDUSTRY — September 30, 2018

 

 

 

COMMON STOCKS

  

Aerospace & Defense

   3.30

Auto Components

   1.45

Banks

   4.83

Beverages

   4.86

Commercial Services & Supplies

   5.81

Communications Equipment

   3.65

Construction & Engineering

   1.07

Distributors

   1.48

Diversified Financial Services

   1.02

Diversified Telecommunication Services

   2.33

Electric Utilities

   1.97

Electrical Equipment

   0.26

Electronic Equipment, Instruments & Components

   2.53

Equity Real Estate Investment Trusts

   5.77

Food & Staples Retailing

   7.88

Food Products

   8.34

Gas Utilities

   1.16

Health Care Equipment & Supplies

   0.83

Health Care Providers & Services

   1.24

Household Durables

   4.87

Independent Power and Renewable Electricity Producers

   0.47

Industrial Conglomerates

   2.46

Insurance

   1.04

Machinery

   2.14

Marine

   0.54

Media

   2.66

Multiline Retail

   0.63

Oil, Gas & Consumable Fuels

   0.56

Personal Products

   0.49

Pharmaceuticals

   3.69

Real Estate Management & Development

   2.74

Semiconductors & Semiconductor Equipment

   0.86

Software

   0.45

Specialty Retail

   1.11

Textiles, Apparel & Luxury Goods

   1.51

Trading Companies & Distributors

   0.36

Wireless Telecommunication Services

   1.41
  

 

 

 

TOTAL COMMON STOCKS

   87.77
  

 

 

 

PREFERRED STOCKS

  

Electric Utilities

   1.55

Health Care Equipment & Supplies

   1.38
  

 

 

 

TOTAL PREFERRED STOCKS

   2.93
  

 

 

 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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Brandes International Small Cap Equity Fund

SCHEDULE OF INVESTMENTS BY INDUSTRY — September 30, 2018 (continued)

 

 

 

REPURCHASE AGREEMENTS

   8.47
  

 

 

 

TOTAL INVESTMENTS

   99.17

Other Assets in Excess of Liabilities

   0.83
  

 

 

 

TOTAL NET ASSETS

   100.00
  

 

 

 

The industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standards (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC. This information is unaudited.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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Brandes Small Cap Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2018

 

 

 

Shares     Value 
 COMMON STOCKS – 76.41% 
 Auto Components – 1.15% 
 4,181  Cooper Tire & Rubber Co. $118,322 
  

 

 

 
 Banks – 3.28% 
 2,012  National Bankshares, Inc.  91,446 
 2,487  Northrim BanCorp, Inc.  103,335 
 2,817  Popular, Inc.  144,371 
  

 

 

 
   339,152 
  

 

 

 
 Biotechnology – 4.28% 
 1,238  Eagle Pharmaceuticals, Inc.(a)  85,830 
 135,484  PDL BioPharma, Inc.(a)  356,323 
  

 

 

 
   442,153 
  

 

 

 
 Capital Markets – 2.32% 
 9,945  Federated Investors, Inc.  239,873 
  

 

 

 
 Communications Equipment – 5.37% 
 13,387  Digi International, Inc.(a)  180,055 
 3,402  NETGEAR, Inc.(a)  213,816 
 8,009  Sierra Wireless, Inc.(a)  160,981 
  

 

 

 
   554,852 
  

 

 

 
 Construction & Engineering – 1.45% 
 19,774  Orion Group Holdings, Inc.(a)  149,294 
  

 

 

 
 
Electronic Equipment, Instruments &
Components – 1.43%
 
 
 3,304  Avnet, Inc.  147,920 
  

 

 

 
 Equity Real Estate Investment Trusts – 0.97% 
 4,391  Alexander & Baldwin, Inc.  99,632 
  

 

 

 
 Food Products – 3.46% 
 1,476  Cal-Maine Foods, Inc.  71,291 
 8,498  Seneca Foods Corp. – Class A(a)  286,382 
  

 

 

 
   357,673 
  

 

 

 
 Health Care Equipment & Supplies – 0.94% 
 6,694  Invacare Corp.  97,398 
  

 

 

 
 Health Care Providers & Services – 5.55% 
 18,729  Owens & Minor, Inc.  309,403 
 4,154  Patterson Companies, Inc.  101,565 
 8,594  Triple-S Management Corp. – Class B(a)  162,341 
  

 

 

 
   573,309 
  

 

 

 
Shares     Value 
 Hotels, Restaurants & Leisure – 1.03% 
 5,931  Speedway Motorsports, Inc. $105,868 
  

 

 

 
 Household Durables – 9.06% 
 9,634  Beazer Homes USA, Inc.(a)  101,157 
 12,248  CSS Industries, Inc.  174,289 
 12,230  Dorel Industries, Inc. – Class B  218,061 
 4,883  M.D.C. Holdings, Inc.  144,439 
 16,518  Taylor Morrison Home Corp. – Class A(a)  297,985 
  

 

 

 
   935,931 
  

 

 

 
 Insurance – 3.81% 
 1,028  American National Insurance Co.  132,910 
 498  National Western Life Group, Inc.  158,962 
 4,559  Old Republic International Corp.  102,030 
  

 

 

 
   393,902 
  

 

 

 
 IT Services – 1.02% 
 4,390  EVERTEC, Inc.  105,799 
  

 

 

 
 Machinery – 4.62% 
 24,790  Briggs & Stratton Corp.  476,712 
  

 

 

 
 Media – 0.91% 
 2,009  Scholastic Corp.  93,800 
  

 

 

 
 Oil, Gas & Consumable Fuels – 5.29% 
 26,866  Chesapeake Energy Corp.(a)  120,628 
 15,386  World Fuel Services Corp.  425,885 
  

 

 

 
   546,513 
  

 

 

 
 Personal Products – 4.05% 
 9,050  Edgewell Personal Care Co.(a)  418,381 
  

 

 

 
 Pharmaceuticals – 2.34% 
 35,308  Avadel Pharmaceuticals Plc Sponsored – ADR(a)  155,002 
 884  Taro Pharmaceutical Industries Ltd.(a)  86,897 
  

 

 

 
   241,899 
  

 

 

 
 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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Brandes Small Cap Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2018 (continued)

 

 

 

Shares     Value 
 Professional Services – 3.31% 
 20,625  Resources Connection, Inc. $342,375 
  

 

 

 
 
Real Estate Management &
Development – 2.77%
 
 
 17,006  St. Joe Co.(a)  285,701 
  

 

 

 
 Software – 2.72% 
 1,627  MicroStrategy, Inc. – Class A(a)  228,789 
 1,039  Verint Systems, Inc.(a)  52,054 
  

 

 

 
   280,843 
  

 

 

 
 Specialty Retail – 2.78% 
 19,958  Rent-A-Center, Inc.(a)  286,996 
  

 

 

 
Shares     Value 
 Thrifts & Mortgage Finance – 0.86% 
 3,021  Territorial Bancorp, Inc. $89,271 
  

 

 

 
 Trading Companies & Distributors – 1.64% 
 22,033  Houston Wire & Cable Co.(a)  169,654 
  

 

 

 
 

TOTAL COMMON STOCKS
(Cost $7,997,749)

 $7,893,223 
  

 

 

 
 PREFERRED STOCKS – 1.55% 
 Oil, Gas & Consumable Fuels – 1.55% 
 250  Chesapeake Energy Corp., 5.750% $160,250 
  

 

 

 
 

TOTAL PREFERRED STOCKS
(Cost $145,900)

 $160,250 
  

 

 

 
 
   Principal
Amount
  Value 
CORPORATE BONDS – 5.01%  
Containers & Packaging – 1.50%  

Bemis Co., Inc.
6.800%, 8/1/2019

 $150,000  $154,549 
  

 

 

 
Electric Utilities – 2.02%  

Portland General Electric Co.
6.100%, 4/15/2019

  205,000   208,630 
  

 

 

 
Household Durables – 1.21%  

Taylor Morrison Communities, Inc. / Taylor Morrison Holdings II, Inc.
5.250%, 4/15/2021(b)

  125,000   125,469 
  

 

 

 
Water Utilities – 0.28%  

California Water Service Co.
5.875%, 5/1/2019

  28,000   28,413 
  

 

 

 

TOTAL CORPORATE BONDS
(Cost $517,345)

  $517,061 
  

 

 

 
REPURCHASE AGREEMENTS – 16.39%  

State Street Bank and Trust Repurchase Agreement,
(Dated 09/28/18), due 10/01/18, 0.42% [Collateralized
by $1,185,000 US Treasury Bond TIPS, 2.375%, 01/15/25,
(Market Value $1,732,767)] (proceeds $1,692,744)

 $1,692,684  $1,692,684 
  

 

 

 

TOTAL REPURCHASE AGREEMENTS
(Cost $1,692,684)

  $1,692,684 
  

 

 

 

Total Investments (Cost $10,353,678) – 99.36%

  $10,263,218 

Other Assets in Excess of Liabilities – 0.64%

   66,617 
  

 

 

 

TOTAL NET ASSETS – 100.00%

  $10,329,835 
  

 

 

 

 

Percentages are stated as a percent of net assets.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

89


Table of Contents

Brandes Small Cap Value Fund

SCHEDULE OF INVESTMENTS — September 30, 2018 (continued)

 

 

 

ADR American Depositary Receipt

TIPS Treasury Inflation-Protected Security

(a)

Non-income producing security.

(b)

Acquired in a transaction exempt from registration under Rule 144A or Section 4(a)(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $125,469, which represented 1.21% of the net assets of the Fund.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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Brandes Small Cap Value Fund

SCHEDULE OF INVESTMENTS BY COUNTRY — September 30, 2018

 

 

 

COMMON STOCKS

  

Canada

   3.67

Ireland

   1.50

Israel

   0.84

United States

   70.40
  

 

 

 

TOTAL COMMON STOCKS

   76.41
  

 

 

 

PREFERRED STOCKS

  

United States

   1.55
  

 

 

 

TOTAL PREFERRED STOCKS

   1.55
  

 

 

 

CORPORATE BONDS

  

United States

   5.01
  

 

 

 

TOTAL CORPORATE BONDS

   5.01
  

 

 

 

REPURCHASE AGREEMENTS

   16.39
  

 

 

 

TOTAL INVESTMENTS

   99.36

Other Assets in Excess of Liabilities

   0.64
  

 

 

 

TOTAL NET ASSETS

   100.00
  

 

 

 

The industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standards (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC. This information is unaudited.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

91


Table of Contents

Brandes Core Plus Fixed Income Fund

SCHEDULE OF INVESTMENTS — September 30, 2018

 

 

 

   Shares  Value 
COMMON STOCKS – 0.01%  
Household Durables – 0.01%  

Urbi Desarrollos Urbanos SA de CV(a)

  31,277  $6,017 
  

 

 

 

TOTAL COMMON STOCKS
(Cost $292,050)

  $6,017 
  

 

 

 
   Principal
Amount
  Value 
FEDERAL AND FEDERALLY SPONSORED CREDITS – 7.69%  
Federal Home Loan Mortgage Corporation – 1.96%  

Pool G1-8578, 3.000%, 12/1/2030

 $1,657,042  $1,633,331 

Pool G0-6018, 6.500%, 4/1/2039

  27,188   30,321 

Pool A9-3505, 4.500%, 8/1/2040

  125,423   130,859 
  

 

 

 
   1,794,511 
  

 

 

 
Federal National Mortgage Association – 5.73%  

Pool CA1624, 3.000%, 4/1/2033

  1,205,972   1,192,328 

Pool 934124, 5.500%, 7/1/2038

  45,813   49,201 

Pool MA0918, 4.000%, 12/1/2041

  282,565   287,486 

Pool AS6201, 3.500%, 11/1/2045

  1,155,036   1,141,569 

Pool AL9865, 3.000%, 2/1/2047

  1,931,971   1,850,227 

Pool BJ2553, 3.500%, 12/1/2047

  729,077   718,018 
  

 

 

 
   5,238,829 
  

 

 

 

TOTAL FEDERAL AND FEDERALLY SPONSORED CREDITS
(Cost $7,157,524)

  $7,033,340 
  

 

 

 
OTHER MORTGAGE RELATED SECURITIES – 0.03%  
Collateralized Mortgage Obligations – 0.00%  

Wells Fargo Mortgage Backed Securities Trust
Series 2006-AR14, 4.644%, 10/25/2036(c)

 $1,402  $1,355 
  

 

 

 
Near Prime Mortgage – 0.03%  

Bear Stearns ALT-A Trust
Series 2004-11, 2.896% (1M LIBOR + 0.680%), 11/25/2034(d)

  30,451   30,370 
  

 

 

 

TOTAL OTHER MORTGAGE RELATED SECURITIES
(Cost $30,440)

  $31,725 
  

 

 

 
US GOVERNMENTS – 49.76%  
Sovereign – 49.76%  

United States Treasury Bond
4.750%, 2/15/2037

 $4,835,000  $5,937,984 

United States Treasury Note
2.000%, 11/15/2021

  3,211,000   3,125,833 

2.000%, 2/15/2023

  6,890,000   6,624,628 

2.375%, 8/15/2024

  14,505,000   14,026,222 

2.250%, 2/15/2027

  16,800,000   15,813,656 
  

 

 

 

TOTAL US GOVERNMENTS
(Cost $47,335,594)

  $45,528,323 
  

 

 

 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

92


Table of Contents

Brandes Core Plus Fixed Income Fund

SCHEDULE OF INVESTMENTS — September 30, 2018 (continued)

 

 

 

   Principal
Amount
  Value 
ASSET BACKED SECURITIES – 2.12%  
Equipment – 0.03%  

Continental Airlines 2007-1 Class A Pass Through Trust
Series 2007-1, 5.983%, 4/19/2022

 $28,054  $29,540 
  

 

 

 
Student Loan – 2.09%  

SLM Private Credit Student Loan Trust 2004-B
Series 2004-B, 2.764% (3M LIBOR + 0.430%), 9/15/2033(d)

  300,000   288,503 

SLM Private Credit Student Loan Trust 2005-A
Series 2005-A, 2.644% (3M LIBOR + 0.310%), 12/15/2038(d)

  400,000   391,530 

SLM Private Credit Student Loan Trust 2006-A
Series 2006-A, 2.624% (3M LIBOR + 0.290%), 6/15/2039(d)

  910,560   888,376 

SLM Private Credit Student Loan Trust 2007-A
Series 2007-A, 2.574% (3M LIBOR + 0.240%), 12/16/2041(d)

  350,000   341,866 
  

 

 

 
   1,910,275 
  

 

 

 

TOTAL ASSET BACKED SECURITIES
(Cost $1,796,703)

  $1,939,815 
  

 

 

 
CORPORATE BONDS – 39.29%  
Automobiles – 1.08%  

General Motors Financial Co., Inc.
2.650%, 4/13/2020

 $1,000,000  $990,290 
  

 

 

 
Banks & Thrifts – 9.31%  

Bank of America Corp.
6.875%, 11/15/2018

  1,475,000   1,482,833 

Citibank NA
2.100%, 6/12/2020

  1,650,000   1,620,493 

Fifth Third Bancorp
8.250%, 3/1/2038

  175,000   238,658 

Goldman Sachs Group, Inc.
7.500%, 2/15/2019

  1,025,000   1,042,788 

JPMorgan Chase & Co.
5.809%, (3M LIBOR + 3.470%), Perpetual(d)

  2,285,000   2,294,711 

USB Capital IX
3.500% (3M LIBOR + 1.020%, minimum of 3.500%), Perpetual(d)

  750,000   670,313 

Wells Fargo & Co.
6.104% (3M LIBOR + 3.770%), Perpetual(d)

  1,150,000   1,165,456 
  

 

 

 
   8,515,252 
  

 

 

 
Commercial Services & Supplies – 2.30%  

ADT Corp.
3.500%, 7/15/2022

  1,830,000   1,731,638 

Iron Mountain, Inc.
4.875%, 9/15/2027(b)

  410,000   376,175 
  

 

 

 
   2,107,813 
  

 

 

 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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Brandes Core Plus Fixed Income Fund

SCHEDULE OF INVESTMENTS — September 30, 2018 (continued)

 

 

 

   Principal
Amount
  Value 
Consumer Products – 1.56%  

Avon International Operations, Inc.
7.875%, 8/15/2022(b)

 $925,000  $953,906 

Wyndham Destinations, Inc.
3.900%, 3/1/2023

  510,000   471,750 
  

 

 

 
   1,425,656 
  

 

 

 
Electric Utilities – 1.22%  

Arizona Public Service Co.
8.750%, 3/1/2019

  340,000   348,172 

Commonwealth Edison Co.
5.900%, 3/15/2036

  175,000   208,420 

Israel Electric Corp. Ltd.
7.250%, 1/15/2019(b)

  200,000   201,874 

Oncor Electric Delivery Co., LLC
7.000%, 9/1/2022

  315,000   356,157 
  

 

 

 
   1,114,623 
  

 

 

 
Food, Beverage & Tobacco – 1.63%  

Mead Johnson Nutrition Co.
4.900%, 11/1/2019

  775,000   790,090 

Pilgrim’s Pride Corp.
5.750%, 3/15/2025(b)

  725,000   697,812 
  

 

 

 
   1,487,902 
  

 

 

 
Health Care Providers & Services – 1.56%  

Tenet Healthcare Corp.
6.000%, 10/1/2020

  1,385,000   1,430,497 
  

 

 

 
Homebuilders – 1.47%  

PulteGroup, Inc.
5.500%, 3/1/2026

  620,000   616,900 

Toll Brothers Finance Corp.
4.875%, 11/15/2025

  745,000   731,963 
  

 

 

 
   1,348,863 
  

 

 

 
Insurance – 1.47%  

American International Group, Inc.
6.400%, 12/15/2020

  800,000   851,180 

CNA Financial Corp.
5.875%, 8/15/2020

  135,000   140,926 

Voya Financial, Inc.
5.500%, 7/15/2022

  335,000   354,427 
  

 

 

 
   1,346,533 
  

 

 

 
Metals & Mining – 1.56%  

Cloud Peak Energy Resources, LLC / Cloud Peak Energy Finance Corp.
12.000%, 11/1/2021

  1,030,000   1,035,140 

6.375%, 3/15/2024

  540,000   391,500 
  

 

 

 
   1,426,640 
  

 

 

 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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Brandes Core Plus Fixed Income Fund

SCHEDULE OF INVESTMENTS — September 30, 2018 (continued)

 

 

 

   Principal
Amount
  Value 
Oil, Gas & Consumable Fuels – 9.08%  

BP Capital Markets Plc
3.506%, 3/17/2025

 $810,000  $801,074 

Chesapeake Energy Corp.
8.000%, 1/15/2025

  1,245,000   1,283,906 

Chevron Corp.
2.100%, 5/16/2021

  1,150,000   1,121,744 

Exxon Mobil Corp.
2.397%, 3/6/2022

  945,000   920,080 

Ithaca Energy, Inc.
8.125%, 7/1/2019(b)

  930,000   921,862 

Kinder Morgan, Inc.
4.300%, 6/1/2025

  1,054,000   1,062,783 

Occidental Petroleum Corp.
3.500%, 6/15/2025

  555,000   550,707 

Range Resources Corp.
5.000%, 3/15/2023

  1,680,000   1,646,400 
  

 

 

 
   8,308,556 
  

 

 

 
Retail – 1.19%  

JC Penney Corp, Inc.
5.875%, 7/1/2023(b)

  1,240,000   1,091,200 
  

 

 

 
Technology – 1.24%  

Microsoft Corp.
2.400%, 2/6/2022

  1,000,000   976,843 

VMware, Inc.
3.900%, 8/21/2027

  170,000   160,834 
  

 

 

 
   1,137,677 
  

 

 

 
Telecommunications – 4.62%  

AT&T, Inc.
3.000%, 6/30/2022

  1,630,000   1,589,638 

Frontier Communications Corp.
6.250%, 9/15/2021

  1,315,000   1,163,775 

Sprint Communications, Inc.
9.000%, 11/15/2018(b)

  1,325,000   1,333,215 

Telefonica Emisiones SAU
5.462%, 2/16/2021

  135,000   140,950 
  

 

 

 
   4,227,578 
  

 

 

 

TOTAL CORPORATE BONDS
(Cost $35,754,244)

  $35,959,080 
  

 

 

 

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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Brandes Core Plus Fixed Income Fund

SCHEDULE OF INVESTMENTS — September 30, 2018 (continued)

 

 

 

   Principal
Amount
  Value 
REPURCHASE AGREEMENTS – 1.68%  

State Street Bank and Trust Repurchase Agreement,
(Dated 09/28/18), due 10/01/18, 0.42% [Collateralized
by $1,075,000 US Treasury Bond TIPS, 2.375%, 01/15/25,
(Market Value $1,571,920)] (proceeds $1,538,447)

 $1,538,393  $1,538,393 
  

 

 

 

TOTAL REPURCHASE AGREEMENTS
(Cost $1,538,393)

  $1,538,393 
  

 

 

 

Total Investments (Cost $93,904,948) – 100.58%

  $92,036,693 

Liabilities in Excess of Other Assets – (0.58)%

   (533,770
  

 

 

 

TOTAL NET ASSETS – 100.00%

  $91,502,923 
  

 

 

 

 

Percentages are stated as a percent of net assets.

TIPS Treasury Inflation-Protected Security

LIBOR London Inter-bank Offered Rate

(a)

Non-income producing security.

(b)

Acquired in a transaction exempt from registration under Rule 144A or Section 4(a)(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $5,576,044, which represented 6.09% of the net assets of the Fund.

(c)

Variable rate security. The coupon is based on an underlying pool of loans.

(d)

Variable rate security. The coupon is based on a reference index and spread index.

The industry classifications represented in the Schedule of Investments are in accordance with Global Industry Classification Standards (GICS®), which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC. This information is unaudited.

 

The accompanying notes are an integral part of these Schedules of Investments.

 

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(This Page Intentionally Left Blank.)

 

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Brandes Investment Trust

STATEMENTS OF ASSETS AND LIABILITIES — September 30, 2018

 

 

 

   Brandes
International
Equity Fund
     Brandes
Global
Equity Fund
 

ASSETS

      

Investment in securities, at value(1)

      

Unaffiliated issuers

  $738,827,174     $67,657,380 

Affiliated issuers

          

Cash

          

Foreign Currency(1)

   887,081      81,095 

Receivables:

      

Securities sold

   5,575,757       

Fund shares sold

   2,126,037      452 

Dividends and interest

   2,477,696      138,182 

Foreign currency spot trade

   15,294      32 

Tax reclaims

   421,210      27,589 

Securities lending

   1,067      1 

Due from Advisor

          

Prepaid expenses and other assets

   46,358      15,315 
  

 

 

     

 

 

 

Total Assets

   750,377,674      67,920,046 
  

 

 

     

 

 

 

LIABILITIES

      

Payables:

      

Securities purchased

   4,975,018       

Fund shares redeemed

   1,635,488      153,374 

Due to Advisor

   468,527      29,745 

12b-1 Fee

   18,165      1,677 

Trustee Fees

   17,840      4,658 

Due to Custodian

   11,093      1,419 

Dividends payable

   214,791      2,388 

Foreign tax withholding

   201,056      7,595 

Accrued expenses

   296,855      106,407 
  

 

 

     

 

 

 

Total Liabilities

   7,838,833      307,263 
  

 

 

     

 

 

 

NET ASSETS

  $742,538,841     $67,612,783 
  

 

 

     

 

 

 

COMPONENTS OF NET ASSETS

      

Paid-in capital

  $797,703,122     $57,463,601 

Undistributed net investment income (loss)

   1,537,706      (62,335

Accumulated net realized gain (loss) on investments and foreign currency

   (3,108,813     2,853,449 

Net unrealized appreciation (depreciation) on:

      

Investments

   (53,550,931     7,359,176 

Foreign currency

   (42,243     (1,108
  

 

 

     

 

 

 

Total Net Assets

  $742,538,841     $67,612,783 
  

 

 

     

 

 

 

Net asset value, offering price and redemption proceeds per share

      

Class A Shares

      

Net Assets

  $34,917,200     $3,359,099 

Shares outstanding (unlimited shares authorized without par value)

   1,971,116      136,497 

Offering and redemption price

  $17.71     $24.61 
  

 

 

     

 

 

 

Maximum offering price per share*

  $18.80     $26.11 
  

 

 

     

 

 

 

Class C Shares

      

Net Assets

  $18,261,120     $1,611,106 

Shares outstanding (unlimited shares authorized without par value)

   1,045,416      65,883 

Offering and redemption price

  $17.47     $24.45 
  

 

 

     

 

 

 

Class I Shares

      

Net Assets

  $664,707,875     $62,642,578 

Shares outstanding (unlimited shares authorized without par value)

   37,421,000      2,528,502 

Offering and redemption price

  $17.76     $24.77 
  

 

 

     

 

 

 

Class R6 Shares

      

Net Assets

  $24,652,646      N/A 

Shares outstanding (unlimited shares authorized without par value)

   1,382,915      N/A 

Offering and redemption price

  $17.83      N/A 
  

 

 

     

 

 

 

(1)  Cost of:

      

Investments in securities

      

Unaffiliated issuers

  $792,378,105     $60,298,204 

Affiliated issuers

          

Foreign currency

   893,887      81,631 

 

*

Includes a sales load of 5.75% for the International, Global, Global Equity Income, Global Opportunities Value, Emerging Markets Value, International Small Cap, and Small Cap Value Funds and 3.75% for the Core Plus Fixed Income Fund. (see Note 7 of the Notes to Financial Statements)

 

The accompanying notes to financial statements are an integral part of this statement.

 

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Brandes Investment Trust

STATEMENTS OF ASSETS AND LIABILITIES — September 30, 2018 (continued)

 

 

 

Brandes
Global Equity
Income Fund

  Brandes
Global
Opportunities
Value Fund
  Brandes
Emerging
Markets
Value Fund
  Brandes
International
Small Cap
Equity Fund
  Brandes
Small Cap
Value Fund
  Brandes
Core Plus Fixed
Income Fund
 
     
     
$1,328,696  $29,946,972  $1,465,930,414  $1,093,787,495  $10,263,218  $92,036,693 
       1,970,333   28,498,213       
 98,121                
 2,661   46,485   4,461,063   379,074       
     
    59,887   10,154,449   6,908,325   63,892    
       11,936,579   5,658,153      24,549 
 5,645   100,846   2,857,627   2,393,971   21,204   632,043 
 2   11   26,794   21,180       
 418   2,434   18,650   199,240       
                 
 14,004            15,387    
 1,957   2,350   39,112   22,011   19,763   19,441 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 1,451,504   30,158,985   1,497,395,021   1,137,867,662   10,383,464   92,712,726 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
     
 5,806      12,373,969   1,033,064      966,985 
 138   24,371   4,655,552   3,384,973   4,005   103,662 
    6,498   1,057,285   895,612      8,399 
 11   507   66,460   26,501   18   527 
 3,220   3,866   41,368   34,186   3,388   5,323 
 325   1,542   153,886   40,211   541   2,188 
 205   3,260   961,744   115,972      18,001 
 432   5,563   248,907   196,035   70    
 53,134   73,157   527,825   412,802   45,607   104,718 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 63,271   118,764   20,086,996   6,139,356   53,629   1,209,803 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
$1,388,233  $30,040,221  $1,477,308,025  $1,131,728,306  $10,329,835  $91,502,923 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
$1,266,462  $29,756,704  $1,696,603,876  $1,240,858,552  $9,543,253  $94,259,465 
 935   (40,684  (10,547,353  (11,039,962  2,480   19,107 
 42,339   1,110,206   (41,307,796  9,084,536   874,562   (907,394
     
 78,637   (784,152  (167,447,407  (107,148,799  (90,460  (1,868,255
 (140  (1,853  6,705   (26,021      

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
$1,388,233  $30,040,221  $1,477,308,025  $1,131,728,306  $10,329,835  $91,502,923 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
     
$32,825  $1,548,821  $258,776,583  $80,900,916  $52,090  $1,757,775 
 2,708   141,357   30,573,705   6,686,877   5,072   198,594 
$12.12  $10.96  $8.46  $12.10  $10.27  $8.85 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
$12.86  $11.63  $8.98  $12.84  $10.90  $9.20 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
$5,128  $273,075  $22,834,835  $14,457,025   N/A   N/A 
 439   25,001   2,706,659   1,224,437   N/A   N/A 
$11.69  $10.92  $8.44  $11.81   N/A   N/A 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
$1,350,280  $28,218,325  $1,162,052,578  $963,836,232  $5,431,139  $89,745,048 
 116,722   2,578,738   136,661,950   79,425,289   528,787   10,059,514 
$11.57  $10.94  $8.50  $12.14  $10.27  $8.92 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
 N/A   N/A  $33,644,029  $72,534,133  $4,846,606  $100 
 N/A   N/A   3,945,986   5,969,696   469,755   11 
 N/A   N/A  $8.53  $12.15  $10.32  $8.93 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
     
$1,250,059  $30,731,124  $1,623,145,989  $1,134,414,676  $10,353,678  $93,904,948 
       12,202,165   95,019,831       
 2,675   46,581   4,471,080   379,844       

 

The accompanying notes to financial statements are an integral part of this statement.

 

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Brandes Investment Trust

STATEMENTS OF OPERATIONS — For the Year Ended September 30, 2018

 

 

 

       
Brandes
International
Equity Fund
     Brandes
Global
Equity Fund
 

INVESTMENT INCOME

      

Income

      

Dividend income

  $22,440,792     $2,213,444 

Less: Foreign taxes withheld

   (2,365,714     (157,115

Interest income

   110,047      5,036 

Income from securities lending

   235,199      13,037 

Miscellaneous Income

          
  

 

 

     

 

 

 

Total Income

   20,420,324      2,074,402 
  

 

 

     

 

 

 

Expenses

      

Advisory fees (Note 3)

   5,162,468      558,110 

Custody fees

   65,811      8,328 

Administration fees (Note 3)

   146,182      18,900 

Insurance expense

   11,736      1,209 

Legal fees

   35,242      2,979 

Printing fees

   32,693      6,701 

Miscellaneous

   23,290      5,436 

Registration expense

   81,460      47,644 

Trustee fees

   63,805      8,393 

Transfer agent fees

   130,928      48,909 

12b-1 Fees – Class A

   85,171      11,873 

12b-1 Fees – Class C

   140,129      12,105 

Shareholder Service Fees – Class C

   46,710      4,035 

Sub-Transfer Agency Fees – Class I

   283,415      31,700 

Accounting fees

   78,326      58,366 

Auditing fees

   44,230      37,521 

Organizational Costs

          
  

 

 

     

 

 

 

Total expenses

   6,431,596      862,209 

Expenses waived

   (22,758     (136,624

Expenses recouped

          
  

 

 

     

 

 

 

Total net expenses

   6,408,838      725,585 
  

 

 

     

 

 

 

Net investment income

   14,011,486      1,348,817 
  

 

 

     

 

 

 

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS

      

Net realized gain (loss) on:

      

Unaffiliated investments**

   25,391,080      2,874,455 

Affiliated investments

          

Foreign currency transactions

   (210,171     (10,426
  

 

 

     

 

 

 

Net realized gain (loss)

   25,180,909      2,864,029 
  

 

 

     

 

 

 

Net change in unrealized appreciation (depreciation) on:

      

Investments

   (17,141,192     (732,898

Foreign currency transactions

   (41,489     (281
  

 

 

     

 

 

 

Net unrealized depreciation

   (17,182,681     (733,179
  

 

 

     

 

 

 

Net realized and unrealized gain (loss) on investments and foreign currency transactions

   7,998,228      2,130,850 
  

 

 

     

 

 

 

Net increase (decrease) in net assets resulting from operations

  $22,009,714     $3,479,667 
  

 

 

     

 

 

 

 

*

Commenced operations on January 2, 2018.

**

Net of foreign capital gains taxes of $2,093,525 and $172,656 in Emerging Markets Value and International Small Cap Funds, respectively.

 

The accompanying notes to financial statements are an integral part of this statement.

 

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Brandes Investment Trust

STATEMENTS OF OPERATIONS — For the Year Ended September 30, 2018 (continued)

 

 

 

Brandes
Global Equity
Income Fund

  Brandes
Global
Opportunities
Value Fund
  Brandes
Emerging
Markets
Value Fund
  Brandes
International
Small Cap
Equity Fund
  Brandes
Small Cap
Value Fund*
  Brandes
Core Plus Fixed
Income Fund
 
     
     
$46,965  $1,043,928  $58,101,687  $36,642,698  $82,889  $ 
 (3,210  (83,474  (6,236,208  (2,827,979  (1,713   
 57   4,899   71,373   329,483   11,827   3,215,317 
          1,232,206   143    
 126      38,806      75    

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 43,938   965,353   51,975,658   35,376,408   93,221   3,215,317 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
 9,481   316,399   16,486,699   14,285,919   45,577   343,319 
 1,837   8,487   868,915   259,344   1,685   13,249 
 2,575   11,441   394,789   373,359   4,394   25,166 
    486   30,301   31,869      1,812 
 48   1,205   101,483   83,038   1,452   4,369 
 3,858   5,630   118,003   93,309   6,488   8,456 
 2,543   3,325   62,165   55,802   184   4,432 
 7,130   47,611   111,331   105,908   1,743   50,415 
 5,811   8,201   171,437   147,378   2,797   12,411 
 45,131   47,065   364,630   250,791   35,071   51,944 
 57   5,995   699,223   316,238   94   6,243 
 4   2,275   203,043   171,327   N/A   N/A 
 2   758   67,681   57,109   N/A   N/A 
 581   15,302   675,965   639,690   1,952   47,797 
 56,353   60,708   96,443   93,823   37,623   59,225 
 35,913   35,955   41,873   39,384   30,689   39,419 
             51,719    

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 171,324   570,843   20,493,981   17,004,288   221,468   668,257 
 (159,353  (178,887  (300,503  (40,989  (167,436  (172,991
       110,624          

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 11,971   391,956   20,304,102   16,963,299   54,032   495,266 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 31,967   573,397   31,671,556   18,413,109   39,189   2,720,051 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
     
 53,581   1,518,371   101,866,689   81,622,688   500,680   (734,191
          (4,663,247      
 (260  (1,341  (2,992,329  (807,207      

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 53,321   1,517,030   98,874,360   76,152,234   500,680   (734,191

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
     
 (48,419  (3,226,983  (297,507,481  (212,419,367  (90,460  (2,975,754
 (171  (1,895  31,294   166,032       

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 (48,590  (3,228,878  (297,476,187  (212,253,335  (90,460  (2,975,754

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
 
    
4,731

 
  (1,711,848  (198,601,827  (136,101,101  410,220   (3,709,945

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
$36,698  $(1,138,451 $(166,930,271 $(117,687,992 $449,409  $(989,894

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

The accompanying notes to financial statements are an integral part of this statement.

 

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Brandes Investment Trust

STATEMENT OF CHANGES IN NET ASSETS

 

 

 

  Brandes International
Equity Fund
  Brandes Global
Equity Fund
 
  Year Ended
September 30,
2018
  Year Ended
September 30,
2017
  Year Ended
September 30,
2018
  Year Ended
September 30,
2017
 

INCREASE (DECREASE) IN NET ASSETS FROM:

    

OPERATIONS

    

Net investment income

 $14,011,486  $10,793,953  $1,348,817  $1,121,657 

Net realized gain (loss) on:

    

Investments

  25,391,080   8,925,814   2,874,455   2,048,371 

Redemption in-kind (Note 10)

     9,829,109       

Foreign currency transactions

  (210,171  (462,979  (10,426  3,055 

Net unrealized appreciation (depreciation) on:

    

Investments

  (17,141,192  38,310,132   (732,898  7,190,594 

Foreign currency transactions

  (41,489  2,308   (281  341 
 

 

 

  

 

 

  

 

 

  

 

 

 

Net increase in net assets resulting from operations

  22,009,714   67,398,337   3,479,667   10,364,018 
 

 

 

  

 

 

  

 

 

  

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS

    

From net investment income

    

Class A

  (569,062  (720,818  (72,745  (130,229

Class C

  (240,746  (399,711  (15,982  (19,935

Class E*

  N/A      N/A    

Class I

  (10,567,066  (15,155,210  (1,223,998  (1,152,966

Class R6

  (440,184  (1,013,114  N/A   N/A 

From net realized gains

    

Class A

        (122,959   

Class C

        (32,728   

Class E*

  N/A      N/A    

Class I

        (1,263,611   

Class R6

        N/A   N/A 
 

 

 

  

 

 

  

 

 

  

 

 

 

Decrease in net assets from distributions

  (11,817,058  (17,288,853  (2,732,023  (1,303,130
 

 

 

  

 

 

  

 

 

  

 

 

 

CAPITAL SHARE TRANSACTIONS

    

Proceeds from shares sold

  280,183,460   233,467,794   5,255,435   13,561,354 

Net asset value of shares issued on reinvestment of distributions

  11,008,451   16,063,510   2,710,260   1,295,281 

Cost of shares redeemed

  (169,897,059  (161,323,965  (10,290,630  (8,661,825

Cost of shares redeemed from Redemption in-kind (See Note 10)

     (231,178,479      
 

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets from capital share transactions

  121,294,852   (142,971,140  (2,324,935  6,194,810 
 

 

 

  

 

 

  

 

 

  

 

 

 

Total increase (decrease) in net assets

  131,487,508   (92,861,656  (1,577,291  15,255,698 
 

 

 

  

 

 

  

 

 

  

 

 

 

NET ASSETS

    

Beginning of the Period

  611,051,333   703,912,989   69,190,074   53,934,376 
 

 

 

  

 

 

  

 

 

  

 

 

 

End of the Period

 $742,538,841  $611,051,333  $67,612,783  $69,190,074 
 

 

 

  

 

 

  

 

 

  

 

 

 

Undistributed net investment income (loss)

 $1,537,706  $(3,081,120 $(62,335 $(88,001
 

 

 

  

 

 

  

 

 

  

 

 

 

 

*

Class E Shares were eliminated effective November 30, 2016 and no longer offered for sale.

 

The accompanying notes to financial statements are an integral part of this statement.

 

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Brandes Investment Trust

STATEMENT OF CHANGES IN NET ASSETS (continued)

 

 

 

  Brandes Global Equity
Income Fund
  Brandes Global Opportunities
Value Fund
 
  Year Ended
September 30,
2018
  Year Ended
September 30,
2017
  Year Ended
September 30,
2018
  Year Ended
September 30,
2017
 

INCREASE (DECREASE) IN NET ASSETS FROM:

    

OPERATIONS

    

Net investment income

 $31,967  $23,182  $573,397  $328,873 

Net realized gain (loss) on:

    

Investments

  53,581   22,900   1,518,371   480,104 

Foreign currency transactions

  (260  16   (1,341  (15,312

Net unrealized appreciation (depreciation) on:

    

Investments

  (48,419  102,220   (3,226,983  2,180,514 

Foreign currency transactions

  (171  (37  (1,895  (400
 

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets resulting from operations

  36,698   148,281   (1,138,451  2,973,779 
 

 

 

  

 

 

  

 

 

  

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS

    

From net investment income

    

Class A

  (681  (19  (47,970  (35,031

Class C

  (17  (158  (4,499  (1,185

Class I

  (30,179  (22,916  (719,259  (311,011

From net realized gains

    

Class A

  (4  (124  (22,059   

Class C

  (4  (269  (2,251   

Class I

  (34,125  (20,701  (247,267   
 

 

 

  

 

 

  

 

 

  

 

 

 

Decrease in net assets from distributions

  (65,010  (44,187  (1,043,305  (347,227
 

 

 

  

 

 

  

 

 

  

 

 

 

CAPITAL SHARE TRANSACTIONS

    

Proceeds from shares sold

  339,640   51,260   4,818,934   24,327,543 

Net asset value of shares issued on reinvestment of distributions

  62,888   42,958   1,010,828   337,089 

Cost of shares redeemed

  (28,697  (18,616  (5,250,648  (1,347,517
 

 

 

  

 

 

  

 

 

  

 

 

 

Net increase in net assets from capital share transactions

  373,831   75,602   579,114   23,317,115 
 

 

 

  

 

 

  

 

 

  

 

 

 

Total increase (decrease) in net assets

  345,519   179,696   (1,602,642  25,943,667 
 

 

 

  

 

 

  

 

 

  

 

 

 

NET ASSETS

    

Beginning of the Period

  1,042,714   863,018   31,642,863   5,699,196 
 

 

 

  

 

 

  

 

 

  

 

 

 

End of the Period

 $1,388,233  $1,042,714  $30,040,221  $31,642,863 
 

 

 

  

 

 

  

 

 

  

 

 

 

Undistributed net investment income (loss)

 $935  $105  $(40,684 $(31,587
 

 

 

  

 

 

  

 

 

  

 

 

 

 

The accompanying notes to financial statements are an integral part of this statement.

 

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Brandes Investment Trust

STATEMENT OF CHANGES IN NET ASSETS (continued)

 

 

 

  Brandes Emerging
Markets Value Fund
  Brandes International
Small Cap Equity Fund
 
  Year Ended
September 30,
2018
  Year Ended
September 30,
2017
  Year Ended
September 30,
2018
  Year Ended
September 30,
2017
 

INCREASE (DECREASE) IN NET ASSETS FROM:

    

OPERATIONS

    

Net investment income

 $31,671,556  $20,788,874  $18,413,109  $19,665,509 

Net realized gain (loss) on:

    

Investments

  101,866,689   16,151,024   76,959,441   69,784,757 

Foreign currency transactions

  (2,992,329  (1,089,493  (807,207  (655,098

Net unrealized appreciation (depreciation) on:

    

Investments

  (297,507,481  257,439,252   (212,419,367  86,267,249 

Foreign currency transactions

  31,294   (20,053  166,032   3,940 
 

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets resulting from operations

  (166,930,271  293,269,604   (117,687,992  175,066,357 
 

 

 

  

 

 

  

 

 

  

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS

    

From net investment income

    

Class A

  (4,492,509  (5,300,042  (5,950,910  (3,926,466

Class C

  (224,759  (144,547  (957,993  (422,873

Class I

  (23,654,042  (19,639,198  (60,072,418  (36,179,079

Class R6

  (1,345,870  (1,148,940  (3,193,839  (1,360,486

From net realized gains

    

Class A

        (5,168,478  (2,808,067

Class C

        (890,995  (411,540

Class I

        (49,135,005  (25,524,016

Class R6

        (2,506,374  (794,405
 

 

 

  

 

 

  

 

 

  

 

 

 

Decrease in net assets from distributions

  (29,717,180  (26,232,727  (127,876,012  (71,426,932
 

 

 

  

 

 

  

 

 

  

 

 

 

CAPITAL SHARE TRANSACTIONS

    

Proceeds from shares sold

  532,236,709   672,663,448   400,890,576   704,614,328 

Proceeds from Transfer in-kind (Note 10)

     27,215,850       

Net asset value of shares issued on reinvestment of distributions

  26,393,702   23,465,154   123,508,821   69,455,916 

Cost of shares redeemed

  (640,989,583  (390,424,715  (971,216,787  (423,441,779
 

 

 

  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets from capital share transactions

  (82,359,172  332,919,737   (446,817,390  350,628,465 
 

 

 

  

 

 

  

 

 

  

 

 

 

Total increase (decrease) in net assets

  (279,006,623  599,956,614   (692,381,394  454,267,890 
 

 

 

  

 

 

  

 

 

  

 

 

 

NET ASSETS

    

Beginning of the Period

  1,756,314,648   1,156,358,034   1,824,109,700   1,369,841,810 
 

 

 

  

 

 

  

 

 

  

 

 

 

End of the Period

 $1,477,308,025  $1,756,314,648  $1,131,728,306  $1,824,109,700 
 

 

 

  

 

 

  

 

 

  

 

 

 

Undistributed net investment loss

 $(10,547,353 $(7,415,874 $(11,039,962 $(11,163,489
 

 

 

  

 

 

  

 

 

  

 

 

 

 

The accompanying notes to financial statements are an integral part of this statement.

 

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Brandes Investment Trust

STATEMENT OF CHANGES IN NET ASSETS (continued)

 

 

 

     Brandes Small Cap
Value Fund
  Brandes Core Plus Fixed
Income Fund
 
     Period Ended
September 30,
2018*
  Year Ended
September 30,
2018
  Year Ended
September 30,
2017
 

INCREASE (DECREASE) IN NET ASSETS FROM:

    

OPERATIONS

    

Net investment income

  $39,189  $2,720,051  $2,426,464 

Net realized gain (loss) on:

    

Investments

   500,680   (734,191  (46,369

Foreign currency transactions

          

Net unrealized depreciation on:

    

Investments

   (90,460  (2,975,754  (1,701,330

Foreign currency transactions

          
  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets resulting from operations

   449,409   (989,894  678,765 
  

 

 

  

 

 

  

 

 

 

DISTRIBUTIONS TO SHAREHOLDERS

    

From net investment income

    

Class A

   (166  (64,040  (61,261

Class E**

   N/A   N/A   (1,222

Class I

   (20,004  (2,657,099  (2,387,103

Class R6

   (19,482  (4  N/A 

From net realized gains

    

Class A

   N/A      (5,530

Class E**

   N/A   N/A   N/A 

Class I

   N/A      (253,423

Class R6

   N/A      N/A 
  

 

 

  

 

 

  

 

 

 

Decrease in net assets from distributions

   (39,652  (2,721,143  (2,708,539
  

 

 

  

 

 

  

 

 

 

CAPITAL SHARE TRANSACTIONS

    

Proceeds from shares sold

   1,813,264   34,243,797   34,413,026 

Proceeds from Transfer in-kind (Note 10)

   8,132,782       

Net asset value of shares issued on reinvestment of distributions

   39,652   2,679,959   2,665,584 

Cost of shares redeemed

   (65,620  (42,896,480  (33,404,800
  

 

 

  

 

 

  

 

 

 

Net increase (decrease) in net assets from capital share transactions

   9,920,078   (5,972,724  3,673,810 
  

 

 

  

 

 

  

 

 

 

Total increase (decrease) in net assets

   10,329,835   (9,683,761  1,644,036 
  

 

 

  

 

 

  

 

 

 

NET ASSETS

    

Beginning of the Period

      101,186,684   99,542,648 
  

 

 

  

 

 

  

 

 

 

End of the Period

  $10,329,835  $91,502,923  $101,186,684 
  

 

 

  

 

 

  

 

 

 

Undistributed net investment income

  $2,480  $19,107  $3,163 
  

 

 

  

 

 

  

 

 

 

 

*

Commenced operations on January 2, 2018.

**

Class E Shares were eliminated effective November 30, 2016 and no longer offered for sale.

 

The accompanying notes to financial statements are an integral part of this statement.

 

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Brandes Investment Trust

FINANCIAL HIGHLIGHTS For a capital share outstanding for the period ended:

 

 

 

   Net asset
value,
beginning
of period
  Net
investment
income(5)
  

Net
realized and
unrealized
gain (loss) on
investments

  Total from
investment
operations
  Dividends
from net
investment
income
 

Brandes International Equity Fund

 

    

Class A

     

9/30/2018

 $17.48   0.36   0.17   0.53   (0.30

9/30/2017

 $15.70   0.29   2.03   2.32   (0.54

9/30/2016

 $14.90   0.35   0.81   1.16   (0.36

9/30/2015

 $16.58   0.35   (1.73  (1.38  (0.30

9/30/2014

 $16.03   0.33   0.56   0.89   (0.34

Class C

     

9/30/2018

 $17.30   0.22   0.18   0.40   (0.23

9/30/2017

 $15.58   0.17   2.00   2.17   (0.45

9/30/2016

 $14.79   0.23   0.81   1.04   (0.25

9/30/2015

 $16.48   0.24   (1.73  (1.49  (0.20

9/30/2014

 $15.98   0.20   0.55   0.75   (0.25

Class I

     

9/30/2018

 $17.52   0.40   0.16   0.56   (0.32

9/30/2017

 $15.72   0.33   2.04   2.37   (0.57

9/30/2016

 $14.92   0.38   0.81   1.19   (0.39

9/30/2015

 $16.60   0.35   (1.70  (1.35  (0.33

9/30/2014

 $16.05   0.36   0.56   0.92   (0.37

Class R6

     

9/30/2018

 $17.56   0.42   0.18   0.60   (0.33

9/30/2017

 $15.74   0.35   2.04   2.39   (0.57

2/1/2016(3) – 9/30/2016

 $14.41   0.27   1.39   1.66   (0.33

 

 

(1)

Not annualized.

(2)

Annualized.

(3)

Commencement of operations.

(4)

After fees waived and expenses absorbed or recouped by the Advisor, where applicable.

(5)

Net investment income per share has been calculated based on average shares outstanding during the period.

(6)

The total return calculation does not reflect the sales loads that may be imposed on Class A or C shares (see Note 7 of the Notes to Financial Statements).

(7)

The total return figure is the since inception return for the class.

(8)

Includes expenses not covered by the Trust’s expense limitation agreement. See Note 3 for more information.

 

The accompanying notes to financial statements are an integral part of this statement.

 

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Brandes Investment Trust

FINANCIAL HIGHLIGHTS For a capital share outstanding for the period ended:

 

 

 

Net asset
value, end
of period
  Total
return(6)
  Net assets,
end of
period
(millions)
  Ratio of
net expenses
to average
net assets(4)
  Ratio of net
investment
income to
average
net assets(4)
  Ratio of
expenses (prior
to reimburse-
ments) to
average
net assets
  Ratio of net
investment
income (prior
to reimburse-
ments) to
average net
assets
  Portfolio
turnover
rate
 
       
       
$17.71   3.02 $34.9   1.16  2.00  1.16  2.00  20.37
$17.48   15.07 $31.5   1.18%(8)   1.77  1.18%(8)   1.77  33.82
$15.70   7.90 $14.3   1.18  2.30  1.18  2.30  17.60
$14.90   (8.47)%  $13.1   1.18  2.08  1.18  2.08  27.50
$16.58   5.47 $9.0   1.19  1.92  1.18  1.93  39.53
       
$17.47   2.31 $18.3   1.91  1.25  1.91  1.25  20.37
$17.30   14.19 $17.9   1.93%(8)   1.01  1.93%(8)   1.01  33.82
$15.58   7.10 $13.1   1.93  1.55  1.93  1.55  17.60
$14.79   (9.14)%  $12.0   1.93  1.43  1.93  1.43  27.50
$16.48   4.64 $4.3   1.93  1.19  1.93  1.19  39.53
       
$17.76   3.23 $664.7   0.96  2.20  0.96  2.20  20.37
$17.52   15.33 $523.1   0.98%(8)   1.96  0.98%(8)   1.96  33.82
$15.72   8.10 $648.3   1.00  2.48  0.98  2.50  17.60
$14.92   (8.30)%  $562.5   1.00  2.10  0.98  2.12  27.50
$16.60   5.61 $521.9   1.00  2.12  0.99  2.13  39.53
       
$17.83   3.44 $24.6   0.82  2.34  0.91  2.25  20.37
$17.56   15.48 $38.5   0.83%(8)   2.12  0.93%(8)   2.02  33.82
$15.74   11.60%(7)  $27.7   0.82%(2)   2.67%(2)   0.93%(2)   2.56%(2)   17.60%(1) 

 

The accompanying notes to financial statements are an integral part of this statement.

 

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FINANCIAL HIGHLIGHTS For a capital share outstanding for the period ended:

 

 

 

   Net asset
value,
beginning
of period
  Net
investment
income(2)
  

Net
realized and
unrealized
gain (loss) on
investments

  Total from
investment
operations
  Dividends
from net
investment
income
  Dividends
from net
realized
gains
 

Brandes Global Equity Fund

 

     

Class A

      

9/30/2018

 $24.42   0.43   0.69   1.12   (0.42  (0.51

9/30/2017

 $21.21   0.34   3.28   3.62   (0.41   

9/30/2016

 $21.85   0.40   0.67   1.07   (0.42  (1.29

9/30/2015

 $25.43   0.27   (1.90  (1.63  (0.33  (1.62

9/30/2014

 $24.20   0.43   2.00   2.43   (0.44  (0.76

Class C

      

9/30/2018

 $24.28   0.24   0.69   0.93   (0.25  (0.51

9/30/2017

 $21.09   0.18   3.25   3.43   (0.24   

9/30/2016

 $21.73   0.25   0.66   0.91   (0.26  (1.29

9/30/2015

 $25.31   0.16   (1.92  (1.76  (0.20  (1.62

9/30/2014

 $24.14   0.24   1.99   2.23   (0.30  (0.76

Class I

      

9/30/2018

 $24.57   0.49   0.70   1.19   (0.48  (0.51

9/30/2017

 $21.33   0.41   3.30   3.71   (0.47   

9/30/2016

 $21.95   0.46   0.67   1.13   (0.46  (1.29

9/30/2015

 $25.52   0.39   (1.97  (1.58  (0.37  (1.62

9/30/2014

 $24.26   0.50   2.00   2.50   (0.48  (0.76

 

 

(1)

After fees waived and expenses absorbed or recouped by the Advisor, where applicable.

(2)

Net investment income per share has been calculated based on average shares outstanding during the period.

(3)

The total return calculation does not reflect the sales loads that may be imposed on Class A or C shares (see Note 7 of the Notes to Financial Statements).

(4)

Includes expenses not covered by the Trust’s expense limitation agreement. See Note 3 for more information.

 

The accompanying notes to financial statements are an integral part of this statement.

 

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FINANCIAL HIGHLIGHTS For a capital share outstanding for the period ended:

 

 

 

Net asset
value, end
of period
  Total
return(3)
  Net assets,
end of
period
(millions)
  Ratio of
net expenses
to average
net assets(1)
  Ratio of net
investment
income to
average
net assets(1)
  Ratio of
expenses (prior
to reimburse-
ments) to
average
net assets
  Ratio of net
investment
income (prior
to reimburse-
ments) to
average
net assets
  Portfolio
turnover
rate
 
       
       
$24.61   4.68 $3.4   1.25  1.72  1.40  1.57  8.89
$24.42   17.20 $5.8   1.26%(4)   1.52�� 1.45%(4)   1.33  17.42
$21.21   5.01 $4.6   1.25  1.95  1.58  1.62  15.68
$21.85   (6.99)%  $1.8   1.25  1.15  1.66  0.74  25.06
$25.43   10.18 $1.2   1.25  1.67  1.71  1.21  30.33
       
$24.45   3.88 $1.6   2.00  0.97  2.15  0.82  8.89
$24.28   16.31 $1.7   2.01%(4)   0.77  2.21%(4)   0.57  17.42
$21.09   4.20 $2.0   2.00  1.20  2.32  0.88  15.68
$21.73   (7.62)%  $2.4   2.00  0.66  2.42  0.24  25.06
$25.31   9.34 $1.1   2.00  0.92  2.46  0.46  30.33
       
$24.77   4.95 $62.6   1.00  1.97  1.20  1.77  8.89
$24.57   17.48 $61.7   1.01%(4)   1.77  1.26%(4)   1.52  17.42
$21.33   5.26 $47.3   1.00  2.20  1.38  1.82  15.68
$21.95   (6.75)%  $46.0   1.00  1.61  1.47  1.14  25.06
$25.52   10.46 $45.9   1.00  1.93  1.53  1.40  30.33

 

The accompanying notes to financial statements are an integral part of this statement.

 

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FINANCIAL HIGHLIGHTS For a capital share outstanding for the period ended:

 

 

 

   Net asset
value,
beginning
of period
  Net
investment
income(5)
  

Net
realized and
unrealized
gain (loss) on
investments

  Total from
investment
operations
  Dividends
from net
investment
income
  Dividends
from net
realized
gains
 

Brandes Global Equity Income Fund

 

    

Class A

      

9/30/2018

 $12.46   0.30   0.02   0.32   (0.26  (0.40

9/30/2017

 $10.79   0.24   1.73   1.97   (0.04  (0.26

9/30/2016

 $9.62   0.28   1.35   1.63   (0.26  (0.20

12/31/2014(3) – 9/30/2015

 $10.00   0.23   (0.46  (0.23  (0.15   

Class C

      

9/30/2018

 $11.97   0.20   0.11   0.31   (0.19  (0.40

9/30/2017

 $10.72   0.16   1.50   1.66   (0.15  (0.26

9/30/2016

 $9.60   0.20   1.31   1.51   (0.19  (0.20

12/31/2014(3) – 9/30/2015

 $10.00   0.23   (0.52  (0.29  (0.11   

Class I

      

9/30/2018

 $11.87   0.32   0.06   0.38   (0.28  (0.40

9/30/2017

 $10.68   0.27   1.45   1.72   (0.27  (0.26

9/30/2016

 $9.57   0.29   1.30   1.59   (0.28  (0.20

12/31/2014(3) – 9/30/2015

 $10.00   0.23   (0.45  (0.22  (0.21   

Brandes Global Opportunities Value Fund

 

    

Class A

      

9/30/2018

 $11.70   0.17   (0.57  (0.40  (0.24  (0.10

9/30/2017

 $10.17   0.15   1.53   1.68   (0.15   

9/30/2016

 $9.36   0.15   0.96   1.11   (0.21  (0.09

12/31/2014(3) – 9/30/2015

 $10.00   0.12   (0.68  (0.56  (0.08   

Class C

      

9/30/2018

 $11.67   0.09   (0.58  (0.49  (0.16  (0.10

9/30/2017

 $10.15   0.07   1.53   1.60   (0.08   

9/30/2016

 $9.33   0.07   0.98   1.05   (0.14  (0.09

12/31/2014(3) – 9/30/2015

 $10.00   0.12   (0.75  (0.63  (0.04   

Class I

      

9/30/2018

 $11.68   0.20   (0.57  (0.37  (0.27  (0.10

9/30/2017

 $10.15   0.19   1.52   1.71   (0.18   

9/30/2016

 $9.33   0.17   0.97   1.14   (0.23  (0.09

12/31/2014(3) – 9/30/2015

 $10.00   0.12   (0.71  (0.59  (0.08   

 

 

(1)

Not annualized.

(2)

Annualized.

(3)

Commencement of operations.

(4)

After fees waived and expenses absorbed or recouped by the Advisor, where applicable.

(5)

Net investment income per share has been calculated based on average shares outstanding during the period.

(6)

The total return calculation does not reflect the sales loads that may be imposed on Class A or C shares (see Note 7 of the Notes to Financial Statements).

(7)

The total return figure is the since inception return for the class.

(8)

Amount is less than $50,000.

(9)

Includes expenses not covered by the Trust’s expense limitation agreement. See Note 3 for more information.

 

The accompanying notes to financial statements are an integral part of this statement.

 

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FINANCIAL HIGHLIGHTS For a capital share outstanding for the period ended:

 

 

 

Net asset
value, end
of period
  Total
return(6)
  Net assets,
end of
period
(millions)
  Ratio of
net expenses
to average
net assets(4)
  Ratio of net
investment
income to
average
net assets(4)
  Ratio of
expenses (prior
to reimburse-
ments) to
average
net assets
  Ratio of net
investment
income (prior
to reimburse-
ments) to
average
net assets
  Portfolio
turnover
rate
 
       
       
$12.12   2.66 $(8)    1.25  2.47  13.81  (10.09)%   16.42
$12.46   18.81 $(8)    1.27%(9)   2.17  18.00%(9)   (14.56)%   12.97
$10.79   17.35 $(8)    1.25  2.67  20.41  (16.49)%   22.38
$9.62   (2.44)%(7)  $(8)    1.25%(2)   2.90%(2)   570.42%(2)   (566.27)%(2)   16.78%(1) 
       
$11.69   2.64 $(8)    2.00  1.68  15.76  (12.08)%   16.42
$11.97   16.01 $(8)    2.00%(9)   1.44  17.88%(9)   (14.44)%   12.97
$10.72   16.01 $(8)    2.00  1.91  21.51  (17.60)%   22.38
$9.60   (2.99)%(7)  $(8)    2.00%(2)   2.90%(2)   572.75%(2)   (567.85)%(2)   16.78%(1) 
       
$11.57   3.33 $1.4   1.00  2.70  14.47  (10.77)%   16.42
$11.87   16.71 $1.0   1.00%(9)   2.45  16.88%(9)   (13.43)%   12.97
$10.68   16.98 $0.9   1.00  2.91  24.04  (20.13)%   22.38
$9.57   (2.36)%(7)  $0.6   1.00%(2)   2.90%(2)   37.61%(2)   (33.71)%(2)   16.78%(1) 
       
       
$10.96   (3.51)%  $1.5   1.40  1.50  1.88  1.02  29.12
$11.70   16.66 $2.8   1.40%(9)   1.36  2.43%(9)   0.33  11.49
$10.17   12.13 $0.6   1.40  1.53  4.57  (1.64)%   71.20
$9.36   (5.66)%(7)  $0.3   1.40%(2)   1.29%(2)   9.85%(2)   (7.16)%(2)   15.12%(1) 
       
$10.92   (4.29)%  $0.3   2.15  0.75  2.64  0.26  29.12
$11.67   15.80 $0.2   2.15%(9)   0.62  3.16%(9)   (0.39)%   11.49
$10.15   11.42 $(8)    2.15  0.78  5.32  (2.39)%   71.20
$9.33   (6.33)%(7)  $(8)    2.15%(2)   1.86%(2)   13.79%(2)   (9.78)%(2)   15.12%(1) 
       
$10.94   (3.28)%  $28.2   1.15  1.75  1.69  1.21  29.12
$11.68   16.91 $28.6   1.15%(9)   1.62  2.05%(9)   0.72  11.49
$10.15   12.45 $5.1   1.15  1.78  4.25  (1.32)%   71.20
$9.33   (5.92)%(7)  $3.0   1.15%(2)   1.55%(2)   11.77%(2)   (9.07)%(2)   15.12%(1) 

 

The accompanying notes to financial statements are an integral part of this statement.

 

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FINANCIAL HIGHLIGHTS For a capital share outstanding for the period ended:

 

 

 

   Net asset
value,
beginning
of period
  Net
investment
income(5)
  

Net
realized and
unrealized
gain (loss) on
investments

  Total from
investment
operations
  Dividends
from net
investment
income
  Dividends
from net
realized
gains
 

Brandes Emerging Markets Value Fund

 

    

Class A

      

9/30/2018

 $9.47   0.15   (1.01  (0.86  (0.15   

9/30/2017

 $7.91   0.10   1.60   1.70   (0.14   

9/30/2016

 $6.19   0.12   1.69   1.81   (0.09   

9/30/2015

 $9.56   0.11   (3.12  (3.01  (0.13  (0.23

9/30/2014

 $9.23   0.11   0.53   0.64   (0.10  (0.21

Class C

      

9/30/2018

 $9.43   0.08   (0.99  (0.91  (0.08   

9/30/2017

 $7.86   0.05   1.58   1.63   (0.06   

9/30/2016

 $6.15   0.07   1.67   1.74   (0.03   

9/30/2015

 $9.51   0.05   (3.10  (3.05  (0.08  (0.23

9/30/2014

 $9.19   0.03   0.54   0.57   (0.04  (0.21

Class I

      

9/30/2018

 $9.51   0.17   (1.01  (0.84  (0.17   

9/30/2017

 $7.94   0.13   1.60   1.73   (0.16   

9/30/2016

 $6.21   0.14   1.70   1.84   (0.11   

9/30/2015

 $9.58   0.13   (3.12  (2.99  (0.15  (0.23

9/30/2014

 $9.24   0.13   0.54   0.67   (0.12  (0.21

Class R6

      

9/30/2018

 $9.53   0.19   (1.02  (0.83  (0.17   

9/30/2017

 $7.93   0.15   1.62   1.77   (0.17   

7/11/2016(3) – 9/30/2016

 $7.54   0.04   0.38   0.42   (0.03   

 

 

(1)

Not annualized.

(2)

Annualized.

(3)

Commencement of operations.

(4)

After fees waived and expenses absorbed or recouped by the Advisor, where applicable.

(5)

Net investment income per share has been calculated based on average shares outstanding during the period.

(6)

The total return calculation does not reflect the sales loads that may be imposed on Class A or C shares (see Note 7 of the Notes to Financial Statements).

(7)

The total return figure is the since inception return for the class.

(8)

Amount is less than $50,000.

(9)

Includes expenses not covered by the Trust’s expense limitation agreement. See Note 3 for more information.

 

The accompanying notes to financial statements are an integral part of this statement.

 

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FINANCIAL HIGHLIGHTS For a capital share outstanding for the period ended:

 

 

 

Net asset
value, end
of period
  Total
return(6)
  Net assets,
end of
period
(millions)
  Ratio of
net expenses
to average
net assets(4)
  Ratio of net
investment
income to
average
net assets(4)
  Ratio of
expenses (prior
to reimburse-
ments) to
average
net assets
  Ratio of net
investment
income (prior
to reimburse-
ments) to
average net
assets
  Portfolio
turnover
rate
 
       
       
$8.46   (9.14)%  $258.8   1.37  1.62  1.34  1.65  37.66
$9.47   21.78 $319.2   1.42%(9)   1.27  1.40%(9)   1.29  23.67
$7.91   29.38 $305.0   1.37  1.74  1.39  1.72  26.48
$6.19   (32.32)%  $295.6   1.37  1.46  1.40  1.43  35.02
$9.56   7.09 $266.9   1.37  1.10  1.37  1.10  22.54
       
$8.44   (9.70)%  $22.8   2.10  0.89  2.09  0.90  37.66
$9.43   20.83 $28.2   2.17%(9)   0.52  2.14%(9)   0.55  23.67
$7.86   28.38 $22.4   2.12  0.99  2.14  0.97  26.48
$6.15   (32.83)%  $18.4   2.12  0.62  2.14  0.60  35.02
$9.51   6.38 $25.3   2.12  0.35  2.13  0.34  22.54
       
$8.50   (8.91)%  $1,162.1   1.12  1.88  1.14  1.86  37.66
$9.51   22.07 $1,311.5   1.17%(9)   1.51  1.20%(9)   1.48  23.67
$7.94   29.70 $829.0   1.12  1.99  1.19  1.92  26.48
$6.21   (32.13)%  $725.1   1.12  1.58  1.19  1.51  35.02
$9.58   7.41 $1,144.3   1.12  1.34  1.18  1.28  22.54
       
$8.53   (8.74)%  $33.6   0.97  2.02  1.08  1.91  37.66
$9.53   22.53 $97.4   1.02%(9)   1.68  1.17%(9)   1.53  23.67
$7.93   5.59%(7)  $(8)    0.97%(2)   2.14%(2)   1.14%(2)   1.97%(2)   26.48%(1) 

 

The accompanying notes to financial statements are an integral part of this statement.

 

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FINANCIAL HIGHLIGHTS For a capital share outstanding for the period ended:

 

 

 

   Net asset
value,
beginning
of period
  Net
investment
income
(loss)(5)
  

Net
realized and
unrealized
gain (loss) on
investments

  Total from
investment
operations
  Dividends
from net
investment
income
  Dividends
from net
realized
gains
 

Brandes International Small Cap Fund

 

    

Class A

      

9/30/2018

 $14.30   0.14   (1.32  (1.18  (0.54  (0.48

9/30/2017

 $13.46   0.14   1.32   1.46   (0.34