Performance and Portfolio Update

  • Effective March 31, 2021, the Pax MSCI EAFE ESG Leaders Index Fund was renamed the Pax International Sustainable Economy Fund to better reflect the Fund’s core focus of investing in the transition to a more sustainable economy. The Fund’s strategy was also enhanced with the integration of the Impax Sustainability Lens into portfolio construction. The Lens, which is already used in several of our actively managed funds, is a tool that facilitates a systematic review of the economic opportunities and risks associated with the transition to a more sustainable economy. The Fund continues to be comprised of companies in non-US developed markets that are ESG leaders and continues to integrate SmartCarbonTM into its process. You can learn more by reading our press release.
  • In the first quarter, the Fund (PXNIX)1 trailed the MSCI EAFE Index (EAFE Index).
  • Several market segments with high sustainability risk produced strong results during the quarter, creating a headwind for Fund performance. Particularly, Energy, where the Fund does not invest, and Metals & Mining, where the Fund has a significant underweight.
  • In addition, more than half of the Fund’s underperformance is attributed to its lower risk and higher quality profile. High beta stocks continued to outperform in a market environment fueled by optimism of a fuller reopening of the economy in the months ahead.
  • From a sector perspective, an underweight allocation to the Consumer Discretionary sector and specific holdings detracted from the Fund’s relative performance during the quarter. Poor results were primarily driven by Adidas and Kering within the Textiles Apparel & Luxury Goods industry and the Fund’s large underweight to the Automobiles industry.
  • The Fund’s SmartCarbon approach added to relative return during the quarter, led by strong results from ASML, Siemens and Tokyo Electron. In addition, over the period since this approach was integrated into the process, it has added 4.53% of relative return compared to the EAFE Index (18-month period: 9/30/19 – 03/31/21). Over that period both aspects of the approach have benefited performance, an overweight toward energy efficiency companies and no exposure to the Energy sector.
  • The Fund’s stronger ESG profile relative to the EAFE Index detracted from performance during the fourth quarter. A chart showing performance attribution by ESG ratings over the trailing three months and since the Fund’s inception is available below. While the Fund’s overweight toward the highest-rated ESG companies added slightly to performance during the quarter, an underweight to the lowest-rated ESG groups meaningfully detracted from performance. Over the since inception period, the Fund’s overweight to the highest-rated ESG companies has contributed the most to relative return.2


(as of 3/31/21)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception3
Pax International Sustainable Economy Fund - Investor Class2.322.32
Pax International Sustainable Economy Fund - Institutional Class2.272.372.3743.917.048.845.935.78
MSCI EAFE (Net) Index2.303.483.4844.576.028.855.525.40
MSCI EAFE ESG Leaders (Net) Index2.372.562.5643.407.319.036.286.18
Lipper International Large-Cap Core Funds Index2.544.714.7148.

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. For most recent month-end performance information, call 800.767.1729 or visit

Figures include reinvested dividends, capital gains distributions and changes in principal value.

3The inception date for the Pax International Sustainable Economy Fund Institutional Class is January 27, 2011, and the Investor Class inception date is March 31, 2014.

Performance Attribution

ESG Ratings

(12/31/20 - 3/31/21)
Average Active Weights (%)
3-month Relative Contribution (%)Since Inception 1/27/11
Relative Contribution (%)

XOther: ETFs (for short-term cash mgmt. purposes) and Cash & Equivalents.
Past performance does not guarantee future results. Short-term performance may not be indicative of long-term results.

Portfolio Characteristics

(as of 3/31/21)
Market Cap (weighted avg.)$65,192M$72,175M
Forward Price/Earnings19.1217.32
Number of Securities305875

1The minimum investment needed for investment in PXNIX is $250,000.

2MSCI ESG Research evaluates companies’ ESG characteristics and derives corresponding ESG scores and ratings. Companies are ranked by ESG score against their sector peers to determine their eligibility for the MSCI ESG indices. MSCI ESG Research identifies the highest-rated companies in each peer group to meet the float-adjusted market capitalization sector targets. The rating system is based on general and industry-specific ESG criteria, assigning ratings on a seven-point scale from AAA (highest) to CCC (lowest).

Top 10 Holdings

(as of 3/31/21)
ASML Holding NV 3.7 %, Roche Holding, Ltd. 3.0%, SAP SE 1.8%, Siemens AG 1.8%, Novo Nordisk A/S, Class B 1.7%, Unilever PLC 1.7%, Commonwealth Bank of Australia 1.6%, Hong Kong Exchanges & Clearing, Ltd. 1.2%, L’Oreal SA 1.2% and GlaxoSmithKline PLC 1.2% . Holdings are subject to change.


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 (ROE) is a ratio that provides investors’ insight into how efficiently a company (or, more specifically, its management team) is managing the equity that shareholders have contributed to the company.
A historical Beta is used for funds with greater than two years of performance history under the same mandate. 5 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.

IMPX0326 (7/21)

Scott LaBreche

Portfolio Manager

Scott LaBreche is Portfolio Manager & VP, Portfolio Analytics, at Impax Asset Management LLC, the North American division of Impax Asset Management Group and investment adviser to Pax World Funds.

Scott is a Portfolio Manager of the Global Women’s Leadership Strategy, which includes the Pax Ellevate Global Women’s Leadership Fund. He is also a Portfolio Manager of the Pax International Sustainable Economy Fund, the Pax Global Sustainable Infrastructure Fund and the Pax U.S. Sustainable Economy Fund.

He is responsible for portfolio management of systematic strategies, portfolio analytics and risk oversight, and quantitative ESG research.

Before joining Impax in 2007, Scott was a Securities Fund Analyst at Lincoln Financial Group. He has been in the investment management industry since 1999.

Scott holds a Bachelor of Science in business administration and a Master of Business Administration with advanced certificate in finance from Southern New Hampshire University.

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