Performance and Portfolio Update

  • The Pax Core Bond Fund outperformed the Bloomberg Barclays US Aggregate Index (Barcap Index) in Q1 2021.
  • During the quarter, two fixed income sectors meaningfully contributed to outperformance. The Fund’s government-related and Asset Backed Securities (ABS) benefited from shorter duration positioning in a rising rate environment. ABS also benefited from the latest stimulus package, which provided payments to consumers.
  • The Fund’s Treasuries sector was the largest detractor to performance versus the Barcap Index. While the Fund’s underweight to the Treasuries sector helped relative performance, longer-duration positioning within the sector more than offset that outperformance. We manage a duration-neutral portfolio and our Treasury holdings help offset shorter-duration positions in other sectors.
  • The investment grade bond market, as measured by the Barcap Index return of -3.04%, is off to the worst start of a year since 1980. The ongoing monetary and fiscal stimulus programs provided by the Federal Reserve (Fed) and the US government have pushed yields on Treasuries to the highest level in more than a year and caused the yield curve to steepen to levels not seen since 2015. The bond market is clearly more concerned about inflation than the Fed. In the face of rising rates the Fed continues to reiterate its commitment to dovish policies, which includes a strong labor market at a new maximum employment level and inflation that will be allowed to run above their 2% target for a period of time.
  • Given this backdrop, we are positioning the portfolio for what we believe will be continued improvement in the economy and slightly rising interest rates. Our approach is to maintain a duration-neutral portfolio and, as such, we do not try to predict interest rate movements. However, to blunt the potential continuing rise in interest rates, we are positioning the portfolio to be overweight credit sectors including corporate bonds and asset backed securities. Both sectors should benefit from recent monetary and fiscal stimulus and re-opening of the economy.
  • Lastly, we are pleased to report that the impact bond market continues to expand its issuance across all types of impact bonds (green, social and sustainability) and sectors. The ABS sector, in particular, has been very active in new issuance. Earlier in the quarter the Fund participated in Freddie Mac’s first sustainability bond issuance. The impact bond market issuance trend shows no signs of slowing.


(as of 3/31/21)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
Pax Core Bond Fund - Investor Class-1.03-3.24-
Pax Core Bond Fund - Institutional Class-1.01-3.18-3.181.474.35--3.58
Bloomberg Barclays US Aggregate Index-1.25-3.37-3.370.714.65--3.98
Lipper Core Bond Funds Index-1.21-3.22-

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 5/1/20 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

(12/31/20 - 3/31/21)
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. Short term performance may not be indicative of long term results.

Portfolio Characteristics

(as of 3/31/21)
Effective Duration6.03%6.31%
Years to Maturity13.0713.43
30 Day SEC Yield

Top 10 Holdings

(as of 3/31/21)

United States Treasury Note, 1.875%, 2/15/41 2.6%, United States Treasury Note, 0.500%, 2/28/26 2.1%, United States Treasury Note, 1.625%, 11/15/50 1.8%, United States Treasury Note, 0.375%, 2/29/28 1.6%, European Investment Bank, 3.25%, 1/29/24 1.2%, International Bank For Reconstruction & Development, 1.625%, 1/15/25 1.1%, United States Treasury Note, 0.375%, 7/15/27 1.1%, Kfw Bankengruppe, 3.125%, 12/15/21 1.0%, European Investment Bank, 0.25%, 9/15/23 0.9% and United States Treasury Note, 0.125%, 4/15/22 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.

IMPX0340 (7/21)

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.

Recent Insights

Scroll to top
User Agent: CCBot/2.0 (