Performance and Portfolio Update
- The Pax Global Opportunities Fund underperformed the MSCI ACWI in the first quarter of 2021.
- Underperformance was led by stock selection in Financials due to low exposure to interest-sensitive names, and Materials, where the strategy is overweight relatively defensive industries. In addition, an overweight to Healthcare, and lack of exposure to Energy detracted from relative performance. Conversely, positive contribution came from stock selection in Consumer Discretionary and from an underweight position to the sector.
- Market rotation away from quality and COVID-19 beneficiaries has affected the performance of a few holdings, despite continued solid fundamentals. Keyence (Electronic Equipment & Instruments, Japan) reported third quarter results which exceeded market expectations, but the stock suffered from profit taking over the quarter. Lonza (Life Sciences Tools & Services, Switzerland), which performed well last year on COVID-19 vaccine news, drifted lower despite producing a solid set of results and forecasts. TeamViewer (Application Software, Germany) share price declined as the market discounted an increase in advertising spending aimed at increasing brand awareness with both personal and enterprise users.
- Top contributors over the quarter tended to be names which benefitted from economies reopening following COVID-19 as well as positive stock specific factors. Prudential (Life & Health Insurance, UK) announced a plan to raise capital to improve the financial flexibility of their Asian operations after they spin off their US business later this year. ASML (Semiconductor Equipment, Netherlands) benefitted from rapid growth in demand for the company’s leading-edge semiconductor manufacturing equipment from Taiwan Semiconductor Corporation and potentially Intel. IQVIA (Life Sciences Tools & Services, US) announced fiscal year 2020 results which beat market expectations and upgraded guidance for 2021 driven by strong demand in core business and continued tailwinds from COVID-19 related demand in their “Real World Evidence” business.
- The acceleration of vaccination programs is leading to anticipation of normalized economic activity. GDP and earnings growth are expected to recover sharply during 2021 driven by pent up demand as economies open further and consumer and business confidence returns. As confidence increases, bond yields, commodities and inflation have risen, triggering a rotation in the equity market away from quality. We believe that as the recovery matures, high quality companies benefitting from the transition to a more sustainable economy will continue to present attractive long-term investment opportunities.
- We remain focused on companies demonstrating consistent growth and operational return profiles coupled with lower debt levels. Areas of interest include beneficiaries of increased spending on drug discovery and testing, the accelerating digital transformation of enterprises, companies providing access to finance and businesses enabling the sharing economy.
Performance(as of 3/31/21)
|1-Month||Quarter||YTD||1 Year||3 Year||5 Year||10 Year||Since Inception1|
|Pax Global Opportunities Fund - Investor Class||0.95||0.95||0.95||51.49||-||-||-||16.34|
|Pax Global Opportunities Fund - Institutional Class||1.02||1.02||1.02||51.87||-||-||-||16.56|
|MSCI ACWI (Net) Index||2.67||4.57||4.57||54.60||-||-||-||13.28|
|Lipper Global Multi-Cap Growth Funds Index||-1.16||1.68||1.68||67.55||-||-||-||18.52|
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.
1The inception date for the Pax Global Opportunities Fund Institutional Class and the Investor Class is June 27, 2018.
Total annual Global Opportunities Fund operating expenses, gross of any fee waivers or reimbursements, for Institutional Class and Investor Class are 1.42% and 1.68%, respectively, as of 5/1/2020 prospectus. Total annual Global Opportunities Fund operating expenses, net of any fee waivers, reimbursements and acquired fund fees and expenses, for Institutional Class and Investor Class, shares were 0.92% and 1.19%, respectively.
(12/31/20 - 3/31/21)
Sector: Average Active Weights (%)
|Total Relative Contribution (%)|
XOther: ETFs (for short-term cash mgmt. purposes) and Cash & Equivalents.
Past performance is no guarantee of future results. Short-term performance may not be indicative of long-term results.
Portfolio Characteristics(as of 3/31/21)
|Market Cap (weighted avg.)∱||$171,694M||$300,618M|
|Number of Securities||41||2,975|
Top 10 Holdings
(as of 3/31/21)
Microsoft Corp. 4.1%, IQVIA Holdings, Inc. 3.8%, Prudential PLC 3.8%, Linde PLC 3.7%, MasterCard, Inc., Class A 3.5%, HDFC Bank, Ltd. 3.4%, Equinix, Inc. 3.3%, Taiwan Semiconductor Manufacturing Co., Ltd. 3.2%, Cadence Design Systems, Inc. 3.1% and Ecolab, Inc. 3.0%. 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.
∞An Ex-Ante Beta is used for Funds with less than two 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.