Performance and Portfolio Update

  • The Pax Global Environmental Markets Fund trailed global equity markets (MSCI ACWI) by a small margin during the final quarter of 2018. The Fund also lagged the FTSE Environmental Opportunities All Share Index.
  • Global equities fell sharply in the fourth quarter. In particular, Industrial stocks in environmental markets suffered due to concern about economic growth and earnings. Not surprisingly, Utilities was the best performing sector given its more defensive characteristics.
  • During the quarter, also suffering were Technology companies helping with resource efficiency, Consumer Discretionary holdings enabling the electrification of vehicles, and Materials companies active in packaging solutions. Defensive Water Utilities and Water Infrastructure names performed better. As with the broader equity markets, US stocks, previously strong in 2018, reversed and took their share of losses in the last quarter of the year as even previously favored areas of the market became vulnerable.
  • Companies with the best relative performance were those deemed not to be as impacted by the trade war, whether through the geographic location of their end markets or the nature of their products. Companies that are more isolated from the concerns about global economic growth and economic cyclicality also performed relatively well. Two examples of Fund holdings producing positive results during the quarter include American Water Works (Water Utilities, US), which enjoyed a good earnings report, and China Everbright International (Waste Technology Equipment, China), which benefited from continued strong new project wins.
  • Fund holdings that performed relatively poorly and faced challenging operating conditions included WestRock (Logistics, Food Safety & Packaging, US), which was a top detractor as the market worried about softer packing box orders and overcapacity in the next few years, and Aptiv (Transport Energy Efficiency, US) due to weakness in the automotive sector, despite announcing decent results. Continued impact of the trade war has been felt in automotive markets: Car sales have weakened in 2018 as tension continues from the US-China trade war.
  • Market volatility, and investor sentiment movements, look set to continue but bring valuation opportunities. The investment team observes parallels between today and other periods in the market where returns among sectors varied substantially. Looking toward 2019, the Fund will continue to be positioned in more defensive business models, with an emphasis on diversification and investing in companies with quality management teams delivering sustainable and above market earnings growth. The global drivers for environmental solutions providers remain very compelling. Policy, consumer preference and consumer behavior remain supportive. Select high-quality defensive stocks, and particularly Industrials, which were highly priced a year ago, now present appealing buying opportunities.

Performance (%)

(as of 12/31/18)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
Global Environmental Markets Fund - Investor Class-7.20-13.57-14.31-14.316.212.809.494.38
Global Environmental Markets Fund - Class A-7.21-13.59-14.33-14.336.212.819.504.39
Global Environmental Markets Fund - Institutional Class-7.27-13.59-14.17-14.176.463.059.774.64
MSCI ACWI (Net) Index-7.04-12.75-9.42-9.426.604.269.464.26
FTSE Environmental Opportunities Index Series-6.36-12.02-12.59-12.598.554.6610.56-

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 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 1.02%, 1.26%, and 1.26%, respectively, as of 5/1/2018 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 0.98%, 1.23% and 1.23%, 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 6.03% (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 12/31/18)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
Global Environmental Markets Fund - Class A (Load)-12.32-18.33-19.06-

Performance Attribution

Environmental Markets Classification
Systemx Sectors

(as of 12/31/18)
Average Active Weights (%)
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 12/31/18)
Market Cap (weighted avg.)$21,997M$131,587M
Forward Price/Earnings15.5713.81
Number of Securities482,754


Top 10 Holdings

(as of 12/31/18)
Sealed Air Corp. 3.7%, Danaher Corp. 3.5%, Xylem, Inc. 3.5%, Siemens AG 3.5%, Ecolab, Inc. 3.3%, TE Connectivity, Ltd. 3.2%, Suez 3.2%, East Japan Railway Co. 3.1%, Waste Management, Inc. 3.1% and Linde PLC 3.1%. 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. 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.

PAX008395 (4/19)

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.

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Bruce Jenkyn-Jones

Chief Investment Officer (CIO), Listed Equities, Executive Director

Bruce serves as Impax’s Chief Investment Officer, Listed Equities. He is responsible for supervising and overseeing investment process, policy and performance, regulatory oversight, and leads product design within Listed Equities and development as well as the application of Impax’s investment thesis across the Listed Equities product range.

Bruce is Chairman of the Listed Equities Investment Committee, and serves as Co-Portfolio Manager of Impax’s Specialists and Climate strategies.

Bruce joined Impax in 1999 where he worked initially on venture capital investments before developing the listed equities business.  Before joining Impax, Bruce worked as a utilities analyst at Bankers Trust and as an environmental consultant for Environmental Resources Management (ERM).

Bruce has an MBA from IESE (Barcelona), an MSc in Environmental Technology from Imperial College and a degree in Chemistry from Oxford.

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Additional 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.

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