Performance and Portfolio Update

  • The Pax Global Environmental Markets Fund outperformed the MSCI ACWI Index in the third quarter of 2021.
  • Positive stock selection was the key driver to the Fund’s outperformance in the period. Industrials led the way, particularly in July and August, however, the sector gave up some of these gains during the September market rotation out of more cyclical stocks. Bio-based and natural ingredient Materials companies also contributed to outperformance, as well as environmental testing holdings in Health Care. Information Technology was the biggest laggard as software names saw price declines with a rotation out of higher growth companies into more defensive parts of the equity market.
  • During the quarter, environmental market themes that contributed to performance included Water Utilities and Water Treatment, Pollution Control solutions and solutions in the Sustainable & Efficient Agriculture area. Verisk Analytics (Environmental Consultancies, US) enjoyed a strong quarter as shares benefited from the current focus on lower but dependable growth and defensive business models, along with a recovery after the market overreacted to weak results in the first quarter. Similarly, shares of American Water Works (Water Utilities, US) also saw strong gains in third quarter because of its highly regulated and defensive business model. Investors view the company as a potential beneficiary of the forthcoming US infrastructure bill, and the company should benefit from increased water quality standards and regulation of harmful chemicals. GEA (Sustainable & Efficient Agriculture, Germany), a German leader in food production optimization, was also a top contributor to returns this quarter. The company raised guidance at its Capital Markets Day and announced good results and growth in food-related end markets.
  • Energy Efficiency holdings detracted from returns. PTC (Industrial Energy Efficiency, US) shares declined despite results being largely as expected. Elevated investor expectations and a rotation out of higher growth stocks impacted performance. This shift in sentiment also worked against TeamViewer (Transport Energy Efficiency, Germany) which has struggled to set new highs this year amid concerns over customer attrition. Intertek (Environmental Testing & Gas Sensing, UK) shares depreciated due to disappointing results. A sizeable headwind from currency effects offset the positive organic growth over the quarter and margins disappointed. That said, we believe Intertek remains well positioned to benefit from accelerating global trends in assurance, testing, inspection and certification.
  • Improving fundamental global economic data has broadly been supportive for equity markets. Earnings announcements have been largely positive with demonstrated above-market growth and generally constructive outlooks for 2021 and beyond. In some cases, the demand environment has rarely been better. That said, many valuations in the market generally are priced for optimal conditions and can be challenging, particularly when framed against a macroeconomic backdrop of inflation, higher raw materials prices, decelerating growth and persistent supply chain bottlenecks.
  • For the portfolio, stock selection remains the key driver for outperformance. During sharp sector or style rotations, the inherently more cyclical nature of the thematic universe for the Fund can be a detractor – however for this reason the investment team carefully balances the portfolio not only in terms of environmental themes and their respective end markets, but importantly also between more cyclical versus defensive business models. The team looks for above average predictability of revenues, attractive free cash flow and strong balance sheets – in combination with the strong secular thematic drivers, these quality characteristics enable positive stock selection and overall portfolio resilience during more volatile market conditions.
  • The investment team continues to have a strong pipeline of interesting opportunities and is currently working on evaluating companies in building energy efficiency, renewable energy and the circular economy.


(as of 9/30/21)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
Pax Global Environmental Markets Fund - Investor Class-6.820.6012.2828.1115.8913.8313.468.09
Pax Global Environmental Markets Fund - Class A-6.790.6412.3028.1715.8913.8513.478.09
Pax Global Environmental Markets Fund - Institutional Class-6.800.6812.5128.4716.1714.1313.768.36
MSCI ACWI (Net) Index-4.13-1.0511.1227.4412.5813.2011.907.21

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.

after sales charge

(as of 9/30/21)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
Pax Global Environmental Markets Fund - Class A (Load)-11.90-4.916.1021.1513.7312.5712.837.64

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.

ˆTotal annual Global Environmental Markets Fund operating expenses, gross of any fee waivers or reimbursements, for Institutional Class, Investor Class and Class A shares are 0.95%, 1.20%, and 1.20%, respectively, as of 5/1/2021 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 0.95%, 1.20% and 1.20%, respectively.ˆ

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 11.57% (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 Attribution

Global Industry Classification Standard Sectors

(for quarter ended 9/30/21)
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.

Portfolio Characteristics

(as of 9/30/21)
Market Cap (weighted avg.)$94,933M$355,637M
Forward Price/Earnings28.7817.84
Number of Securities512,976

Top 10 Holdings

(as of 9/30/21)
Linde PLC 3.4%, Waste Management, Inc. 3.4%, American Water Works Co., Inc. 3.2%, Agilent Technologies, Inc. 3.2%, Schneider Electric SE 3.1%, Koninklijke DSM N.V. 2.8%, Autodesk, Inc. 2.7%, GEA Group AG 2.6%, Texas Instruments, Inc. 2.6% and Hubbell, Inc. 2.6%. Holdings are subject to change.


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.

IMPX0750 (1/22)

Hubert Aarts

Deputy CIO, Listed Equities, Executive Director

Hubert serves as Deputy CIO, Listed Equities. He and Bruce Jenkyn-Jones, CIO Listed Equities, are responsible for the development of the investment process, research and team. Hubert researches stocks globally and specialises in Industrials and Consumer Discretionary.

Hubert is Co-Portfolio Manager of Impax’s Leaders and Water strategies. He also leads Impax’s macro-economic research process and is responsible for the top-down investment framework.

Hubert started his career in the investment industry in 1990 and joined Impax in January 2007.  He has extensive experience investing in Pan-European equities as a portfolio manager at MeesPierson and Merrill Lynch Investment Managers, where he chaired the European Sector Strategy Group. Hubert joined Impax from Cambrian Capital Partners LLP where he was a partner and portfolio manager of the Curalium Fund and Incremental Leveraged hedge funds.

Hubert has a Master’s degree in Economics and Business Administration from Maastricht University.

Recent Insights

David Winborne

Senior Portfolio Manager

David is co-manager of the Global Opportunities, Leaders and US Environmental Leaders strategies. He has global research responsibility and specialises in Energy Efficiency and Pollution Control environmental markets sub-sectors. David researches stocks globally with a focus on the Technology and Telecommunications sectors.

David joined Impax in 2015 from the in-house asset management team at Tesco Pension Investment where he had joint responsibility for the successful development, launch and management of a new global equities investment platform for Tesco’s pension fund. Prior to this David was a fund manager at Sarasin & Partners, where he was responsible for the firm’s Asia-Pacific equity fund and for contributing investment recommendations to Sarasin’s flagship thematic Global Equity fund.

After graduating from the University of Bath, David began his career at Insight Investment on the Global Equities graduate scheme in 2003 as a global equity analyst.

Recent Insights

Siddharth Jha

Portfolio Manager

Siddharth is co-portfolio manager of the Leaders and US Environmental Leaders strategies and a member of the Portfolio Construction team for the Water strategy. His research responsibilities centre on the water value chain and the Industrials, Utility and Healthcare sectors with a bias towards North American companies.

Siddharth joined Impax in 2014 after graduating from business school and interning with Impax’s Listed Equity team over the summer and autumn of 2012. In his pre-MBA career, Sid worked as a clean technology consultant in India.

Siddharth has an MBA with a focus in Finance from London Business School and a Bachelor of Arts in History and Political Science from Macalester College, where he graduated cum laude.

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