Performance and Portfolio Update

  • The Pax Core Bond Fund outperformed the Bloomberg Barclays US Aggregate Bond Index in the third quarter.
  • During the quarter, the Fund’s Securitized and Treasury holdings were large contributors to performance. Within the Securitized sector, an underweight to agency mortgage backed securities (MBS), including Fannie Mae and Freddie Mac securities, helped the Fund’s relative performance. These securities continue to see prepayments, which hurts agency MBS sector performance. Also within the Securitized sector, the Fund’s asset backed securities (ABS) holdings have been recouping underperformance from earlier in the year.
  • The shorter duration positioning of the Fund’s Treasury bonds was additive to performance as yield curve steepening hurt long-dated Treasuries. Additionally, an allocation to Treasury Inflation Protection Securities (TIPS) helped the Fund’s performance relative to the Index, which does not include TIPS. The securities have performed better as inflation expectations have risen.
  • Conversely, an overweight to Supranationals hurt as the sector underperformed credit-sensitive sectors, which benefited from an improving economic outlook.
  • Investment grade bonds continue to have a solid year from a performance perspective, particularly the Treasury market, which has benefited from economic uncertainties. Inflation, which would hurt Treasuries, has tried to tick up, but so far rates have stayed range bound.
  • Going forward, we are positioning the Fund’s portfolio for this range-bound environment. Our approach is to maintain a duration neutral portfolio and, as such, we do not try to predict interest rate movements. Currently we are positioning the portfolio to be overweight corporate bonds with the expectation that credit sensitive areas of the fixed income market will benefit as the economy opens up. We are also slightly positioning the portfolio for a yield curve steepening to better align with the Federal Reserve’s preference for increasing inflation.
  • The Fund continues to add impact holdings, which now make up 39% of the portfolio as of the end of September. The impact bond market continues to expand its issuance across all types of impact bonds (green, social, and sustainability) and asset classes (corporates, supranationals, and sovereigns).


(as of 9/30/20)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
Pax Core Bond Fund - Investor Class-0.040.816.456.344.63--4.56
Pax Core Bond Fund - Institutional Class-0.020.876.656.604.89--4.82
Bloomberg Barclays US Aggregate Index-0.050.626.796.985.24--5.29
Lipper Core Bond Funds Index0.081.347.177.505.38--5.47

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

(6/30/20 - 9/30/20)
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 9/30/20)
Effective Duration5.88%6.06%
Years to Maturity13.4313.50
30 Day SEC Yield

Top 10 Holdings

(as of 9/30/20)

United States Treasury Note, 1.125%, 08/15/40 3.0%, United States Treasury Note, 1.375%, 08/15/50 2.9%, United States Treasury Note, 0.25%, 06/30/25 1.2%, 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%, United States Treasury Note, 0.5%, 06/30/27 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.

PAX009508 (1/21)

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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