Performance and Portfolio Update

  • The Pax Core Bond Fund trailed the Bloomberg Barclays US Aggregate by a small margin in the fourth quarter.
  • The main driver of underperformance was the Fund’s Treasury holdings, primarily the allocation to Treasury Inflation Protection Securities (TIPS). TIPS have been lagging as growth and inflation expectations have been falling.
  • Security selection within corporate bonds helped performance. We are positioned more conservatively, with less spread duration. As credit markets weakened, the spread between corporate bonds and Treasuries widened considerably. This helped, as the Fund is less sensitive to spread changes.
  • The Fund continues to be positioned to perform well in a late credit cycle environment. The portfolio remains less sensitive to credit spreads, which traditionally widen as the economy slows. We maintain the view that the risks to the credit market, including rising rates, tariffs and late in cycle dynamics, outweigh the steady economy.
  • During the quarter we continued to add to the Fund’s securitized portion of the portfolio. These include both residential and asset-backed securities.
  • We continued to add new impact holdings during the quarter, as well, including four impact asset-backed securities, a corporate green bond and a green supranational bond. Our impact holdings now stand at 18.5% of the Fund’s allocation.

Performance (%)

(as of 12/31/18)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
Core Bond Fund - Investor Class1.671.55-0.24-0.24---1.56
Core Bond Fund - Institutional Class1.691.610.000.00---1.82
Bloomberg Barclays US Aggregate Index1.841.640.
Lipper Core Bond Funds Index1.511.10-0.45-0.452.292.604.502.17

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 5/1/18 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 12/31/18)
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 12/31/18)
Effective Duration)5.88%5.84%
Years to Maturity13.7212.85
30 Day SEC Yield


Top 10 Holdings

(as of 12/31/18)
United States Treasury Note, 3.125%, 5/15/48 5.4%, United States Treasury Note, 2.375%, 8/15/24 5.0%, United States Treasury Note, 2.625%, 2/28/23 4.3%, United States Treasury Note, 2.750%, 9/30/20 2.5%, United States Treasury Note, 2.125%, 11/30/23 2.1%, United States Treasury Note, 4.500%, 2/15/36 1.6%, United States Treasury Note, 4.375%, 11/15/39 1.4%, United States Treasury Note, 0.375%, 7/15/27 1.4%, United States Treasury Note, 2.375%, 3/15/21 1.0% and United States Treasury Note, 0.125%, 4/15/22 0.9%. Holdings are subject to change.


Spread duration is the sensitivity of the price of a bond to a 100 basis point change to its option-adjusted spread. As the rate of the Treasury security in the option-adjusted spread increases, the rate of the option-adjusted spread also increases. A basis point (bps) is a unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly used for calculating changes in interest rates, equity indexes and the yield of a fixed-income security.
ƒEffective 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.

PAX008398 (4/19)

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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