Performance and Portfolio Update

  • The Pax Core Bond Fund outperformed the Bloomberg Barclays US Aggregate in the second quarter.
  • During the quarter there were three fixed income sectors that contributed meaningfully to outperformance. The Fund’s underweight to Treasuries helped as interest rates started to rise and the yield curve began to steepen. Positioning within the Securitized sector also helped the Fund’s relative performance as less liquid names that sold off in the previous quarter performed very well. We were rewarded for maintaining our conviction and allocation to these securities which we believed underperformed in the first quarter due to a market liquidity issue rather than a credit issue. Lastly, the Fund’s overweight to corporate bonds helped as credit spreads tightened significantly in the quarter.
  • Conversely, the shorter duration positioning of the Fund’s government-related bonds slightly detracted from performance in a market led by longer-durated bonds.
  • Investment grade bonds are having a very strong year with the biggest driver to date being Treasuries, which have benefitted from a flight to quality. Investment grade Corporate Bonds have also performed well more recently due to spread tightening. Going forward we are positioning the portfolio with the expectation that both Treasuries and Corporate Bonds will be range-bound. Treasury rates could start to rise as the economy continues to reopen, however the Federal Reserve has made it clear that they would prefer lower interest rates and have the tools to keep rates low. Meanwhile, corporate bonds seem to have discounted the best-case scenario for both COVID-19 and the reopening in the economy. We would not be surprised if interest rates tightened a little more but do not expect big moves from current levels.
  • The Fund continues to add impact holdings, which at the end of June 2020 now totals over 38%. The impact bond market continues to expand and we expect to grow this allocation in the Fund’s portfolio at a fast pace moving forward. In an interesting and positive development, the issuance of social bonds, and of COVID-19 bonds in particular, has blossomed. We have participated in three of such COVID-19 bonds. The proceeds from these bonds are used for personal protection equipment, non-profit hospitals treating COVID-19 patients and non-profits and businesses impacted by the shutdown.


(as of 6/30/20)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
Pax Core Bond Fund - Investor Class0.783.355.607.774.56--4.65
Pax Core Bond Fund - Institutional Class0.803.415.737.934.82--4.92
Bloomberg Barclays US Aggregate Index0.632.906.148.745.32--5.49
Lipper Core Bond Funds Index1.014.635.758.435.24--5.48

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

(3/31/20 - 6/30/20)
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. Short term performance may not be indicative of long term results.

Portfolio Characteristics

(as of 6/30/20)
Effective Duration5.54%5.97%
Years to Maturity13.3813.44
30 Day SEC Yield

Top 10 Holdings

(as of 6/30/20)

United States Treasury Note, 1.25%, 05/15/50 3.2%, United States Treasury Note, 1.500%, 10/31/24 2.0%, United States Treasury Note, 1.125%, 05/15/40 1.6%, European Investment Bank, 3.25%, 01/29/24 1.3%, International Bank For Reconstruction & Development, 1.625%, 01/15/25 1.2%, United States Treasury Note, 0.375%, 07/15/27 1.1%, United States Treasury Note, 2.250%, 03/31/26 1.1%, Kfw Bankengruppe, 3.125%, 12/15/21 1.1%, European Investment Bank, 0.25%, 09/15/23 1.0%, and United States Treasury Note, 0.125%, 04/15/22 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.

PAX009347 (10/20)

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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