Pax Global Opportunities Fund Commentary Q3 2021

Performance and Portfolio Update

• The Pax Global Opportunities Fund outperformed the MSCI ACWI Index in the third quarter of 2021.
• On a relative basis against the MSCI ACWI Index, positive contribution came from stock selection in the Materials, where the Fund is exposed to specialty chemical names, Industrials, Information Technology and Health Care sectors. This offset underperformance of portfolio holdings in the Financials sector.
• Strong earnings were a feature of the top contributors, with names across a variety of sectors experiencing strong business conditions. Keyence (Electronic Equipment & Instruments, Japan) reported earnings which beat expectations as sales and profitability hit record levels. The company was unaffected by the tightening in supply and demand for parts in the Factory Automation industry as they had increased inventory to manage the disruption. Thermo Fischer Scientific (Life Science Tools & Services, US) responded positively to a good set of results which showed strong organic growth coming from its base business. Having put COVID-19 cash-flows to good use, the company is now in a good position to accelerate top and bottom-line growth over the medium term. Lastly, Croda International (Specialty Chemicals, UK) also produced a strong set of results. The Pfizer vaccine (lipids business) tailwind looks set to continue, with additional emerging market penetration expected to come in the second half of the year.
• Underperformance was largely stock specific. The outlook for Grifols (Biotechnology, Spain) deteriorated as the increase in the COVID-19 delta variant in the US negatively impacted the main geography for plasma collections. Vertex Pharmaceutical (Biotechnology, US) posted steady results, demonstrating strength in its cystic fibrosis business and maintaining good margins. However, the share price has underperformed the market in line with the broader Health Care sector which has been out of favor with investors as it is not viewed as a beneficiary of economies re-opening. AIA Group’s (Life & Health Insurance, Hong Kong) share price has struggled amid industry-wide concerns on growth and margin outlook due to the “Common Prosperity” agenda in China, and COVID-19 related delays to re-opening the Hong Kong-China border.
• The acceleration of vaccination programs and lifting of restrictions has resulted in an acceleration in economic activity. Gross Domestic Product and earnings growth have recovered sharply during 2021, driven by pent up demand as economies open further and consumer and business confidence returns. However, rising demand, coupled with supply chain disruptions and localized labor constraints have seen inflation rise. While rising inflation has brought forward the timing of the next US rate hike, Impax believes that high quality companies benefitting from the transition to a more sustainable economy continue to present attractive long-term investment opportunities.
• The investment team remains 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.

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.

ˆTotal annual Global Opportunities Fund operating expenses, gross of any fee waivers or reimbursements, for Institutional Class and Investor Class are 1.31% and 1.56%, respectively, as of 5/1/2021 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 0.98% and 1.23%, respectively.ˆ

Performance Attribution (6/30/21 - 9/30/21) Sector: Average Active Weights (%)	Total Relative Contribution (%)

Top 10 Holdings

(as of 9/30/21)
Microsoft Corp. 4.1%, IQVIA Holdings, Inc. 3.7%, MasterCard, Inc., Class A 3.7%, Linde PLC 3.4%, HDFC Bank, Ltd. 3.4%, Prudential PLC 3.2%, Thermo Fisher Scientific, Inc. 3.1%, Equinix, Inc. 3.1%, Taiwan Semiconductor Manufacturing Co., Ltd. 3.1% and Evotec SE 3.0%. 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.
^∞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.

IMPX0747 (1/22)