Performance and Portfolio Update
- The Fund underperformed the benchmark Russell 1000 Index in the first quarter. The main drivers of the return difference were industry exposures. From a factor perspective, the factors used in the strategy construction detracted from relative returns slightly.
- Industry exposures, which are driven by the factor and ESG tilts, detracted from relative returns for the quarter. Particularly, an underweight to the aerospace and defense industry hampered relative results amidst an environment of rising geopolitical tensions and a strong outlook for US defense spending.
- The overweight towards companies with higher dividend yield was the largest style factor detractor for the period.
- The tilt towards dividend sustainability factors added to relative performance. Particularly, the strategy’s exposure to companies with higher profitability aided relative performance. Exposure to companies with higher earnings quality and management quality benefitted the Fund as well.
- Environmental, social and governance (ESG) factors, as measured by the Pax Sustainability Scorex, added to relative results for the quarter. The Fund overweights the portfolio towards companies with ESG strength. During the period, companies with stronger ESG profiles outperformed those with weaker ESG profiles.
Performance(as of 6/30/18)
|1-Month||Quarter||YTD||1 Year||3 Year||5 Year||10 Year||Since Inception1|
|ESG Beta Dividend Fund - Individual Investor Class||0.67||2.63||0.84||12.62||-||-||-||12.11|
|ESG Beta Dividend Fund - Institutional Class||0.75||2.71||1.10||12.92||-||-||-||12.42|
|Russell 1000 Index||0.65||3.57||2.85||14.54||11.64||13.37||10.20||15.17|
|Lipper Equity Income Funds Index||0.38||1.85||-0.83||8.64||8.84||9.99||8.27||9.45|
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. To obtain performance for the most recent month-end call 800.767.1729 or visit paxworld.wpengine.com
Figures include reinvested dividends, capital gains distributions, and changes in principal value.
1The inception date for the Pax ESG Beta Dividend Fund Institutional Class and the Individual Investor Class is December 16, 2016.
Total annual Pax ESG Beta Dividend Fund operating expenses, gross of any fee waivers or reimbursements, for Individual Investor Class and Institutional Class shares are 0.90% and 0.65%, respectively as of 5/1/2017 prospectus.ˆ
(as of 3/31/18)
|Total Relative Factor
Past performance is no guarantee of future results.
2Dividend Yield – Purpose: Captures differences in stock returns attributable to stock’s historical and predicted dividend-to-price ratios.
Descriptors: Dividend-to-Price, Predicted Dividend-to-Price
Portfolio Characteristics(as of 3/31/18)
|Market Cap (weighted avg.)∱||$159,930M||$179,468M|
|Number of Securities||165||975|
Top Ten Holdings
(as of 6/30/18)
Amazon.com, Inc. 3.1%, Apple, Inc. 3.0%, Microsoft Corp. 3.0%, Cisco Systems, Inc. 3.0%, 3M Co., 2.8%, Johnson & Johnson 2.6%, Texas Instruments, Inc. 2.4%, Home Depot, Inc., The 2.2%, ONEOK, Inc. 2.1%, UnitedHealth Group, Inc. 2.0% . Holdings are subject to change.
xThe Pax Sustainability Score is a proprietary ranking of companies’ environmental, social and governance (ESG) performance developed by Pax World’s Sustainability Research Team. The scoring framework is shaped by the team’s collective experience and insights on how sustainability impacts financial performance. Learn more about the Pax Sustainability Score here.
ƒWeighted Average is an average in which each quantity to be averaged is assigned a weight. These weightings determine the relative importance of each quantity on the average.
~Forward Price-Earnings Ratio or P/E FY1 ratio is a ratio for valuing a company that measures its current share price relative to its per-share earnings over the next 12 months.
∘ Return on Equity: The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested.
∞An Ex-Ante Beta is used for Funds with less than 2 years of performance history under its new mandate. The Ex-Ante Beta is calculated using a multi-factor risk model. Beta explains common variations in stock returns due to different stock sensitivities to the market relative to its underlying benchmark for the current period, not historical. A beta for a benchmark is 1.00: a beta greater than 1.00 indicates above average volatility and risk.
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.