United StatesPerformance and Portfolio Update
- The Fund trailed both global equity markets (MSCI ACWI Index) and its comparative index (FTSE Environmental Opportunities All Share) during the first quarter.
- In the first quarter, markets were buffeted by a number of broader macro-economic factors, some of which reversed as the quarter progressed. Solid US economic growth, including indications of wage inflation, led to concerns that interest rates would continue to rise. Defensive and cyclical stocks took turns leading the market throughout the quarter, with growth stocks outperforming during the period.
- Portfolio performance in the first quarter was affected by weakness in Water Utilities, in part due to concerns about higher interest rates, but also due to region-specific issues. Suez (Water Utilities, France) suffered from a profit warning early in the quarter, at the same time a strengthening Euro added to investor anxiety about Suez’s earnings outlook. Beijing Enterprise Water Group (Water Utilities, Hong Kong) suffered from weak 2017 results and lower guidance for 2018.
- Pollution Control and the US were the strongest areas of the portfolio in the first quarter. In addition, environmental markets companies with IT solutions exposure proved resilient during the market downturn.
- The portfolio’s best performing names were in the Energy Efficiency and Water Infrastructure subsectors. PTC (Industrial Energy Efficiency, US) announced positive earnings, driven by further penetration of its efficiency software into industrial markets. TE Connectivity (Transport Energy Efficiency, US) continued to power ahead thanks to the rising adoption of its connectors and sensors across a wide set of end-markets.
- In our view, the overall global economic picture is supportive for equities, and above market earnings delivery should continue to drive returns for the Fund.
Performance(as of 6/30/18) | 1-Month | Quarter | YTD | 1 Year | 3 Year | 5 Year | 10 Year | Since Inception1 |
|---|---|---|---|---|---|---|---|---|
| Global Environmental Markets Fund - Individual Investor Class | -1.50 | -2.51 | -5.17 | 4.14 | 7.35 | 8.96 | 5.84 | 5.64 |
| Global Environmental Markets Fund - Class A | -1.43 | -2.44 | -5.17 | 4.14 | 7.35 | 8.97 | 5.85 | 5.65 |
| Global Environmental Markets Fund - Institutional Class | -1.43 | -2.43 | -5.08 | 4.37 | 7.61 | 9.23 | 6.11 | 5.91 |
| MSCI ACWI (Net) Index | -0.54 | 0.53 | -0.43 | 10.73 | 8.19 | 9.41 | 5.80 | 5.44 |
| FTSE Environmental Opportunities Index Series | -1.80 | -1.97 | -3.38 | 8.90 | 9.91 | 11.06 | - | - |
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 Global Environmental Markets Fund Institutional Class and the Individual 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, Individual Investor Class and Class A shares are 1.04%, 1.29%, and 1.29%, respectively, as of 5/1/2017 prospectus. Total annual Global Environmental Markets Fund operating expenses, net of any fee waivers, reimbursements and acquired fund fees and expenses, for Institutional Class, Individual Investor Class, and Class A shares were 0.98%, 1.23% and 1.23%, respectively.
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 9.78% (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 (as of 6/30/18) | 1-Month | Quarter | YTD | 1 Year | 3 Year | 5 Year | 10 Year | Since Inception1 |
|---|---|---|---|---|---|---|---|---|
| Global Environmental Markets Fund - Class A (Load) | -6.85 | -7.80 | -10.40 | -1.60 | 5.35 | 7.75 | 5.25 | 5.07 |
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 3/31/18) | Fund | Benchmark |
|---|---|---|
| Market Cap (weighted avg.)∱ | $21,871M | $131,595M |
| Forward Price/Earnings∼ | 17.52 | 15.28 |
| ROE∘ | 15.61 | 17.12 |
| Beta∞ | 0.99 | 1.00 |
| Number of Securities | 45 | 2,495 |
Top Ten Holdings
(as of 6/30/18)
Sealed Air Corp. 3.8%, Siemens AG 3.4%, East Japan Railway Co. 3.4%, TE Connectivity, Ltd. 3.4%, SUEZ Environnement Co., SA 3.3%, Danaher Corp. 3.3%, Ecolab, Inc. 3.0%, Ferguson PLC 3.0%, Praxair, Inc. 3.0% and Aptiv PLC 2.9%. 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 2 years of performance history under the same mandate. Three 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.
PAX008021 10/18)