United StatesPerformance and Portfolio Update
- The Pax Global Environmental Markets Fund outperformed the MSCI ACWI Index in the first quarter of 2021.
- The portfolio’s overweight exposure and strong stock selection within Industrials drove outperformance. Cyclical Industrials stocks marked strong gains in the first quarter of 2021. The Industrials holdings in the portfolio represent a diverse group of companies operating in a broad range of end markets – agricultural equipment, industrial, buildings, and utility energy solutions, water infrastructure and water efficiency, food processing technology, and waste management.
- Other areas of performance strength relative to the MSCI ACWI Index included waste and packaging companies, and environmental testing companies that offer life science tools and analytical equipment solutions.
- Three notable contributors to performance include Deer, Hubbell and Siemens. Deere (Sustainable & Efficient Agriculture, U.S.) shares continued to rise as exceptional fourth quarter results led to numerous analyst upgrades and an announcement of higher dividends. Hubbell (Power Network Efficiency, U.S.) had a strong quarter as investors anticipated recovering end markets, with discussions of a U.S. infrastructure stimulus package also providing a boost. Siemens (Industrial Energy Efficiency, Germany) benefited from strong results and investors’ search for quality companies with a positive outlook coupled with a reasonable valuation.
- Conversely, defensive renewable energy companies and stocks with individual setbacks underperformed during the quarter. Orsted (Renewable Energy Developers & IPPs, Denmark) was the largest detractor due to the market rotation away from growth-oriented stocks. TeamViewer (Transport Energy Efficiency, Germany) share price declined as the market discounted an increase in advertising spending, aimed at increasing brand awareness with both personal and enterprise users. Verisk (Environmental Consultancies, U.S.) shares closed lower for the quarter, with the market rotation to more cyclical business models being the biggest driver.
- Also hurting performance on a relative basis to MSCI ACWI were zero portfolio allocations to the Financials, Communication Services and Energy sectors, which are areas of the broader market that performed strongly during the quarter.
- The transition to a more sustainable economy continues to provide investment opportunities for the Fund. Improving fundamental global economic data is supportive and earnings announcements have been broadly positive. However, we continue to believe it is important to maintain a diversified and balanced portfolio with exposure to a broad range of environmental markets sectors, end markets, and different types of business models.
- Current themes and areas of focus include the semiconductor space, with sustained efforts underway to increase production reshoring and building supply chain resilience, plus chip demand for an ever-growing list of applications and customizations; the hydrogen economy; electric vehicle penetration; opportunities in less cyclical quality names which may have underperformed in the current rotation; renewables stocks; and beneficiaries of the proposed U.S. infrastructure bill, such as industrial energy efficiency, electrification, digitization, and life sciences solution providers.
Performance(as of 3/31/21) | 1-Month | Quarter | YTD | 1 Year | 3 Year | 5 Year | 10 Year | Since Inception1 |
|---|---|---|---|---|---|---|---|---|
| Pax Global Environmental Markets Fund - Investor Class | 4.53 | 4.98 | 4.98 | 68.21 | 14.05 | 14.60 | 10.23 | 7.86 |
| Pax Global Environmental Markets Fund - Class A | 4.54 | 4.94 | 4.94 | 68.16 | 14.05 | 14.59 | 10.23 | 7.86 |
| Pax Global Environmental Markets Fund - Institutional Class | 4.60 | 5.04 | 5.04 | 68.61 | 14.34 | 14.89 | 10.51 | 8.13 |
| MSCI ACWI (Net) Index | 2.67 | 4.57 | 4.57 | 54.60 | 12.07 | 13.21 | 9.14 | 7.00 |
| FTSE Environmental Opportunities Index Series | 3.28 | 2.91 | 2.91 | 82.17 | 18.85 | 18.80 | 11.40 | - |
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 impaxam.com
Figures include reinvested dividends, capital gains distributions and changes in principal value.
Performance (as of 3/31/21) | 1-Month | Quarter | YTD | 1 Year | 3 Year | 5 Year | 10 Year | Since Inception1 |
|---|---|---|---|---|---|---|---|---|
| Pax Global Environmental Markets Fund - Class A (Load) | -1.21 | -0.85 | -0.85 | 58.90 | 11.93 | 13.30 | 9.61 | 7.39 |
1The inception date for the Pax Global Environmental Markets Fund Institutional Class and the Investor Class is March 27, 2008. The Class A shares inception date is May 1, 2013.
Total annual Global Environmental Markets Fund operating expenses, gross of any fee waivers or reimbursements, for Institutional Class, Investor Class and Class A shares are 0.97%, 1.22%, and 1.22%, respectively, as of 5/1/2020 prospectus. Total annual Global Environmental Markets Fund operating expenses, net of any fee waivers, reimbursements and acquired fund fees and expenses, for Institutional Class, Investor Class, and Class A shares were 0.97%, 1.22% and 1.22%, respectively.
The performance information shown for Class A represents the performance of the 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 11.38% (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%.
Performance AttributionGlobal Industry Classification Standard† Sectors(for quarter ended 3/31/21) Average Active Weights (%) | Total Relative Contribution (%) |
|---|---|
 |  |
†The Global Industry Classification Standard (GICS) is a standardized classification system for equities developed jointly by Morgan Stanley Capital International (MSCI) and Standard & Poor’s. The GICS methodology is used by the MSCI indexes, which include domestic and international stocks, as well as by a large portion of the professional investment management community.
Past performance is no guarantee of future results.
Performance AttributionEnvironmental Markets Classification | Total Relative Contribution (%) |
|---|---|
 |  |
XThe Environmental Markets Classification System (EMCS) is a comprehensive global classification system for environmental markets. Environmental market companies are defined as providing products and services that deliver solutions to environmental challenges, and include environmental technology. Relative results of the Fund compared to the FTSE Environmental Opportunities All Shares Index. Source: FTSE.
Past performance is no guarantee of future results.
Portfolio Characteristics(as of 3/31/21) | Fund | MSCI ACWI |
|---|---|---|
| Market Cap (weighted avg.)∱ | $46,886M | $300,618M |
| Forward Price/Earnings∼ | 30.03 | 19.53 |
| ROE∘ | 14.82 | 17.55 |
| Beta∞ | 1.02 | 1.00 |
| Number of Securities | 49 | 2,975 |
Top 10 Holdings
(as of 3/31/21)
Linde PLC 3.5%, Waste Management, Inc. 3.5%, American Water Works Co., Inc. 3.4%, Agilent Technologies, Inc. 3.1%, Schneider Electric SE 2.8%, IDEX Corp. 2.8%, GEA Group AG 2.7%, Koninklijke DSM N.V. 2.6%, Intertek Group PLC 2.5% and Waters Corp. 2.5%. Holdings are subject to change.
Definitions
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.
∞A historical Beta is used for Funds with greater than two years of performance history under the same mandate. Five year Beta is used. Beta 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.
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.
IMPX0341 (7/21)