Performance and Portfolio Update

  • The Pax Core Bond Fund trailed the Bloomberg Barclays US Aggregate Index (Barcap Index) in the quarter, but meaningfully outperformed the Lipper Core Bond Funds Index, its peer group benchmark. The Barcap Index contains high levels of treasuries and agencies, which historically has made it a difficult benchmark to outperform for active managers in times of market volatility.
  • Relative to the Lipper Core Bond Funds Index, the Fund’s conservative posture with respective to yield contributed to outperformance, and we expect to maintain this defensive positioning due to current market and economic uncertainty.
  • Treasuries and asset-backed securities (ABS) were the biggest detractors to performance versus the Barcap Index. The Fund’s underweight to the Treasuries sector hurt relative performance during the flight-to-quality, however longer-duration positioning in the sector partially offset the underperformance. Regarding ABS, liquidity issues caused yields on these securities to widen significantly leading to poor performance in the asset class. We continue to hold these securities with the view that the underperformance was related to a market liquidity issue rather than a credit issue.
  • The Fund’s corporate bond positioning was the primary contributor to relative performance versus the Barcap Index during the period. Due to the economic uncertainty of the COVID-19 crisis, all corporate bond sectors in the first quarter experienced spread widening, particularly within the Energy and Consumer Discretionary (airlines, hotels) sectors. The Fund’s high credit quality positioning left it less sensitive to spread widening. Also, the Fund is fossil fuel free and does not own any airlines or cruise lines, which helped mitigate some of the risk in troubled areas of the market. We expect Consumer Discretionary sectors to continue to widen as the economic impact plays out.
  • The Fund’s impact holdings held up relatively well during the downturn. Many of these securities are from high quality issuers with good credit metrics. In addition, scarcity value of the securities may have helped liquidity because generally impact bonds had been in high demand leading up to the crisis. During the course of the quarter, we sold some of our holdings due to their attractive liquidity dynamics.
  • In terms of portfolio activity in the first quarter, we took the opportunity during the drawdown to sell credits that remain relatively tight while adding credits that we believe widened more than what was justified based on fundamentals. The portfolio remains very defensively positioned though we took an opportunity to add some risk on the margin.


(as of 3/31/20)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
Core Bond Fund - Investor Class-1.602.182.187.303.81--3.97
Core Bond Fund - Institutional Class-1.582.242.247.564.07--4.23
Bloomberg Barclays US Aggregate Index-0.593.153.158.934.82--5.00
Lipper Core Bond Funds Index-2.391.061.066.924.19--4.46

Performance data quoted represent past performance, which does not guarantee future results. 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 may be lower or higher than the performance data quoted. For most recent month-end performance information call 800.767.1729 or visit

Figures include reinvested dividends, capital gains distributions and changes in principal value.

1The inception date for the Pax Core Bond Fund Institutional Class and Investor Class is December 16, 2016.

As of the 5/1/19 prospectus, total annual Core Bond Fund operating expenses, gross of any fee waivers or reimbursements (excluding Acquired Fund fees and expenses), for Investor Class and Institutional Class shares are 0.71% and 0.46%, respectively.

Performance Attribution

(as of 3/31/20)
Sector: Average Active Weights (%)
Total Relative Contribution (%)

XOther: ETFs (for short-term cash mgmt. purposes) and Cash & Equivalents. Past performance is no guarantee of future results.

Portfolio Characteristics

(as of 3/31/20)
Effective Duration5.55%5.64%
Years to Maturity14.2313.11
30 Day SEC Yield

Top 10 Holdings

(as of 3/31/20)

United States Treasury Note, 2.375%, 11/15/49 4.3%, United States Treasury Note, 1.500%, 10/31/24 4.2%, United States Treasury Note, 2.125%, 11/30/23 2.4%, United States Treasury Note, 4.375%, 11/15/39 1.4%, United States Treasury Note, 3.500%, 2/15/39 1.3% International Bank For Reconstruction & Development, 1.625%, 1/15/25 1.2%, United States Treasury Note, 2.250%, 3/31/26 1.1%, United States Treasury Note, 0.375%, 7/15/27 1.1%, United States Treasury Note, 2.375%, 3/15/21 1.1% and Freddie Mac, 3.000%, 03/01/50 0.9%. Holdings are subject to change.


Effective Duration is a measure of a security’s price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities of shorter durations.
Years to Maturity (weighted average) is the number of years until the bond matures and/or expires.
30-Day SEC Yield: An annualized yield based on the most recent 30-day period.

The statements and opinions expressed are those of the author as of the date of this report. All information is historical and not indicative of future results and subject to change. This information is not a recommendation to buy or sell any security. Past performance does not guarantee future results.

PAX009165 (7/20)

Anthony Trzcinka, CFA®

Senior Portfolio Manager

Anthony (Tony) Trzcinka is a Senior Portfolio Manager at Impax Asset Management LLC, the North American division of Impax Asset Management Group and investment adviser to Pax World Funds.

He is a Senior Portfolio Manager of the Core Bond Strategy, which includes the Pax Core Bond Fund. Tony is also a member of the Pax Sustainable Allocation Fund portfolio management team. A pioneer in sustainable fixed income investing, Tony has been managing strategies investing in impact bonds for over 10 years.

Tony has been responsible for multiple strategies since joining the firm in 2003. Before Impax, Tony spent three years as an Assistant Vice President at AEW Capital Management, where he worked in a Senior Analyst role. He began his financial services career as an analyst in 1999.

Tony is a CFA® charterholder and a member of the Boston Security Analysts Society. He holds an MBA from Northeastern University and a Bachelor of Arts from the University of Massachusetts.

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