Performance and Portfolio Update

  • The Pax Core Bond Fund performed in-line the Bloomberg Barclays US Aggregate Index (Barcap Index) in the second quarter.
  • During the quarter, two fixed income sectors meaningfully contributed to outperformance. An underweight to agency mortgage backed securities (MBS) and the Fund’s Treasury holdings drove positive relative performance. The Fund’s underweight to the MBS sector benefited from the expectation that the Federal Reserve (Fed) will start tapering its bond purchase program. In Treasuries, outperformance was driven by longer-duration positioning within the sector.
  • Following a rocky start to the year, the investment grade bond market, as measured by Barcap Index, posted a 1.83% return in the second quarter. The 10-year Treasury rallied in the quarter with the yield dropping from 1.74% to 1.47%. In addition, corporate credit spreads tightened by 11 basis points.
  • In the second quarter the bond market tempered inflation concerns and expectations as compared to the first quarter. That tempering of expectations was even with the Fed pulling forward their interest rate guidance and starting the conversation on tapering at their June meeting. The Fed’s shift in guidance caused more rate volatility and a “bull flattening” of the yield curve in which long-term rates decreased more quickly than short-term rates. The bond market has been digesting every move with increased volatility.
  • Given this backdrop, we continue to position the portfolio for 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 rise in interest rates, we are positioning the portfolio to be overweight credit sectors including corporate bonds and asset backed securities. We believe that both sectors should benefit from the monetary and fiscal stimulus and re-opening of the economy.
  • Lastly, we are pleased to report that the sustainable debt market1 continues to expand its issuance across all types of impact bonds (green, social and sustainability) and sectors. One notable recent addition to the portfolio was a 7-year sustainability bond issued by the International Development Finance Corp (DFC). This issue is part of their 2X Women’s Initiative which applies a gender lens to every project. Through 2X, DFC has catalyzed investment in projects that are owned by women, led by women, or provide a product or service that empowers women.


(as of 6/30/21)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception2
Pax Core Bond Fund - Investor Class0.721.79-1.51-0.314.75--3.54
Pax Core Bond Fund - Institutional Class0.751.85-1.39-0.065.01--3.80
Bloomberg Barclays US Aggregate Index0.701.83-1.60-0.335.34--4.18
Lipper Core Bond Funds Index0.842.07-1.191.505.92--4.59

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.

2The inception date for the Pax Core Bond Fund Institutional Class and Investor Class is December 16, 2016.

As of the 5/1/21 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

(3/31/21 - 6/30/21)
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 6/30/21)
Effective Duration6.22%6.51%
Years to Maturity13.0913.61
30 Day SEC Yield

1According to research company BloombergNEF, the sustainable debt market comprises labeled bonds and loans that finance projects with green benefits, social benefits or a mixture of both.

Top 10 Holdings

(as of 6/30/21)

United States Treasury Note, 2.25%, 5/15/41 3.4%, United States Treasury Note, 0.500%, 2/28/26 2.1%, United States Treasury Note, 2.375%, 5/15/51 2.0%, United States Treasury Note, 0.375%, 2/29/28 1.6%, European Investment Bank, 3.25%, 1/29/24 1.1%, United States Treasury Note, 0.375%, 7/15/27 1.1%, International Bank For Reconstruction & Development, 1.625%, 1/15/25 1.1%, Kfw Bankengruppe, 3.125%, 12/15/21 0.9%, 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.

IMPX0530 (10/21)

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.

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