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 had a slightly positive impact on relative returns.
  • Industry exposures, which are driven by the factor and ESG tilts, detracted from relative returns for the quarter. Particularly, an overweight position in the life, health, and multi-line insurance industry hampered relative results following news that Amazon, Berkshire Hathaway and JPMorgan Chase were collaborating on reducing healthcare costs.
  • The overweight towards quality factors contributed positively to relative results for the period. Particularly, the strategy’s exposure to companies with higher profitability was the largest style factor contributor.
  • The factor tilt towards higher value companies, as measured by Earnings Yield, detracted from relative results. The factor tilt towards companies with lower beta and higher earnings quality had a negligible impact.
  • 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.


(as of 6/30/18)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
ESG Beta Quality Fund - Individual Investor Class0.672.121.0313.519.2012.278.805.40
ESG Beta Quality Fund - Class A˜0.622.120.9813.549.2012.298.805.40
ESG Beta Quality Fund - Institutional Classƒ0.672.181.1713.819.4812.569.075.53
Russell 1000 Index0.653.572.8514.5411.6413.3710.20
Lipper Multi-Cap Core Funds Index0.373.162.3613.6010.0811.969.12

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

Figures include reinvested dividends, capital gains distributions, and changes in principal value.

1The inception date for the Pax ESG Beta Quality Fund Institutional Class is April 2, 2007, the Individual Investor Class inception date is June 11, 1997 and the Class A shares inception date is May 1, 2013.

The performance information shown for Institutional Class shares represents the performance of the Individual Investor Class shares for the period prior to Institutional Class inception (April 2, 2007). Expenses have not been adjusted to reflect the expenses allocable to Institutional Class shares. If such expenses were reflected, the returns would be higher than those shown. Institutional Class shares average annual return since April 2, 2007 is 7.95% (annualized).

Total annual Pax ESG Beta Quality Fund operating expenses, gross of any fee waivers or reimbursements, for Individual Investor Class, Class A, and Institutional Class shares are 0.90%, 0.90% and 0.65%, respectively as of 5/1/2017 prospectus.

The performance information shown for Class A represents the performance of the Individual Investor Class shares for the period prior to Class A inception. Expenses have not been adjusted to reflect the expenses allocable to Class A shares. Class A inception date return since May 1, 2013 is 12.44% (annualized). A 1.00% CDSC (contingent deferred sales charge) may be charged on any shares sold within 18 months of purchase over $1 million. POP (public offering price) reflects the maximum sales load for the Fund’s Class A Shares of 5.50%.

after sales charge

(as of 6/30/18)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
ESG Beta Quality Fund - Class A (Load)-4.92-3.49-4.567.327.1511.028.185.12


(as of 3/31/18)
Factor Exposure
Total Relative Factor
Contribution (%)

Past performance is no guarantee of future results.
2Beta reflects the sensitivity of a Fund’s return to fluctuations in its benchmark; a beta for a benchmark is 1.00: a beta greater than 1.00
indicates above average volatility and risk.

Portfolio Characteristics

(as of 3/31/18)
Market Cap (weighted avg.)$164,293M$179,468M
Forward Price/Earnings16.2517.17
Number of Securities157975


Top Ten Holdings

(as of 6/30/18), Inc. 3.4%, Apple, Inc. 3.2%, MasterCard, Inc., Class A 2.5%, Microsoft Corp. 2.5%, Verizon Communications, Inc. 2.5%, Alphabet, Inc., Class A 2.4%, Texas Instruments, Inc. 2.4%, PepsiCo, Inc. 2.3%, Johnson & Johnson 2.5%, 3M Co. 2.2% and PNC Financial Services 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.

PAX008018 (10/18)

David Loehwing, VP for Sustainable Investing, Pax World Funds

David Loehwing

Head of Sustainability & ESG, North America

David Loehwing is Head of Sustainability and ESG, North America at Impax Asset Management LLC, the North American division of Impax Asset Management Group and investment adviser to Pax World Funds.

He is responsible for environmental, social and governance-related research on prospective and current investments, and he leads the construction and management of the Impax Systematic ESG Rating. He is also a member of the Impax Gender Analytics Team.

David has worked in sustainable investing since 1998. Before joining Impax in 2007, he served as Senior Social Research Analyst at Citizens Advisers and as a Senior Account Manager at the Investor Responsibility Research Center. He is a former member of the Evangelical Lutheran Church in America (ELCA) Advisory Committee on Corporate Social Responsibility and the Sustainable Investment Research Analyst Network’s steering committee.

David is a graduate of Bowdoin College.

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