Causeway’s AI Business Disruption Factor

Causeway’s proprietary AI disruption factor converts fundamental research into a live, cross-sector risk measure that identifies where artificial intelligence may erode or strengthen companies’ competitive positions.

• Fundamental analysts classify AI effects into four archetypes: beneficiaries, margin pass-through, value-chain migration, and terminal TAM shrinkage.
• Quantitative analysts score companies across eight dimensions using internal and broker research, filings, earnings-call transcripts, and news; each dimension is rated from 1 to 5 and combined into a weighted 0–100 score.
• Scores near 60 indicate exceptionally high disruption risk, while industry averages generally fall between approximately 10 and 30; the MSCI ACWI scored about 18.
• Software, autos, banks, and insurance ranked as the most exposed MSCI ACWI industry groups, while materials, energy, utilities, semiconductors, and consumer goods were more insulated.
• Teleperformance SE received a 60/100 score because AI alternatives were approaching offshore-labor cost parity, its moat was operational rather than proprietary, and value was accruing upstream; after its valuation multiple de-rated, Causeway sold the stock.
• At the end of the second quarter, Causeway’s international, global, and emerging-markets portfolios generally had AI-disruption exposure close to their MSCI EAFE, ACWI, and Emerging Markets benchmarks.

Takeaway: Causeway intends to use the factor to monitor every holding and prospective holding, compare portfolios with benchmarks, and identify trigger events such as autonomous-vehicle adoption, AI-designed biologics, and agentic commerce; the scores remain time-specific assessments rather than investment recommendations.