Performance and Portfolio Update

  • The Pax Core Bond Fund trailed the Bloomberg Barclays US Aggregate Index in the quarter.
  • During the quarter, the Fund’s corporate bond positioning detracted from performance primarily due to an underweight to highly levered cyclical companies in the energy, travel, and gaming industries. These companies performed well throughout the latter half of the year, buoyed by Federal Reserve (Fed) stimulus, an improving economy and vaccine news.
  • The Fund’s performance continues to benefit from an overweight to Asset Backed Securities (ABS) and underweight to Mortgage Backed Securities (MBS). ABS have continued to recoup underperformance from earlier in the year due to government stimulus programs that have helped keep a lid on consumer loan defaults. MBS were a poor performing area of the fixed income market in 2020. An increase in prepayments hurt MBS throughout the year as interest rates remained relatively low.
  • The Fund continues to add impact holdings, which now make up more than 40% of the portfolio as of the end of December. 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).
  • Investment grade bonds had a solid year of performance, returning 7.51% as measured by the Bloomberg Barclays Aggregate Index. The positive vaccine news along with ongoing monetary and fiscal stimulus programs provided by the Fed and the US government has propelled corporate bonds to pre-pandemic levels.1 We expect the stimulus trend to continue in light of the recently passed $900 billion fiscal stimulus and guidance from both the Fed and the incoming presidential administration. Conversely, these scenarios may not be helpful for Treasury securities, which may experience poor performance in 2021 as a result of inflationary pressures. If the Bloomberg Barclays Treasury Index produces a negative calendar year return in 2021, it would be only the fifth time in the last 50 years.2
  • Going forward, 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. 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 Fed’s preference for increasing inflation.


(as of 12/31/20)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception3
Pax Core Bond Fund - Investor Class0.150.416.896.894.74--4.38
Pax Core Bond Fund - Institutional Class0.170.487.167.164.99--4.64
Bloomberg Barclays US Aggregate Index0.140.677.517.515.34--5.12
Lipper Core Bond Funds Index0.381.378.638.635.73--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.

3The 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

(9/30/20 - 12/31/20)
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 12/31/20)
Effective Duration5.92%6.16%
Years to Maturity13.5213.58
30 Day SEC Yield

1Source: ICE BofA US Corporate-Index Option-Adjusted Spread

2Source: Bloomberg Intelligence

Top 10 Holdings

(as of 12/31/20)

United States Treasury Note, 1.125%, 08/15/40 2.9%, United States Treasury Note, 0.375%, 11/30/25 2.0%, United States Treasury Note, 1.625%, 11/15/50 2.0%, United States Treasury Note, 0.625%, 11/30/27 1.4%, 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 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.

IMPX0020 (4/21)

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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