Performance and Portfolio Update

  • In the second quarter, the Pax International Sustainable Economy Fund (PXNIX)1 trailed the MSCI EAFE Index (EAFE Index).
  • Investment strategy: The strategy integrates the the Impax Sustainability Lens, a proprietary tool that helps the advisor systematically overweight the portfolio toward subindustries we identify as high opportunity in the context of the transition to a more sustainable economy while removing exposure to sub-industries classified as low opportunity and high risk. The Fund is also constructed to provide higher exposure to companies with favorable environmental, social and governance (ESG) ratings relative to their sector and industry peers, as determined by MSCI.2 Lastly, the strategy is fossil fuel free, utilizing SmartCarbonTM, a proprietary tool that replaces energy sector holdings with energy efficiency stocks. The Fund’s optimization process applies appropriate constraints at the sector, region, country and security levels to create a diversified portfolio of approximately 300 stocks.
  • Asset class conditions: International Developed equity markets, as measured by the EAFE Index, increased by 5.17% during the second quarter, driven by continued reopening and expansion of the economy. Equity markets rotated toward higher quality companies, while high beta stocks took a pause after leading markets during the first quarter. This market environment provided a modest tailwind for the Fund, as its higher quality and lower risk profile was beneficial for relative performance.
  • Impax Sustainability Lens attribution: The Fund’s overweight to high opportunity industries contributed modestly to relative performance while an underweight to low opportunity industries modestly detracted from performance. Life Sciences Tools & Services and Application Software are two high opportunity sub-industries that contributed to performance. The companies in these two sub-industries are exposed to many areas of the market where we see future growth and innovation, such as digital infrastructure, automation and environmental analysis. No allocation to Apparel Accessories & Luxury Goods, which we classify as low opportunity, was the largest detractor for the quarter, as it performed strongly in the reopening of the economy. This sub-industry has no meaningful alignment with opportunities associated with the transition to a sustainable economy and exhibits higher risk due to environmental and social issues within their supply chains.
  • ESG ratings attribution: During the quarter the higher rated sustainable companies within the EAFE universe underperformed, creating a headwind to Fund performance. The MSCI EAFE ESG Leaders Index returned 4.66% in Q2, 0.52% lower than the EAFE. In this environment, the Fund’s weight in top tier MSCI IVA companies was a significant detractor to performance. A chart showing performance attribution by ESG ratings over the trailing three months and since the Fund’s inception is available below. Over the since inception period, the Fund’s overweight and selection to the highest-rated companies on ESG characteristics has contributed the most to relative return.
  • SmartCarbonTM attribution: During the quarter, the Fund’s SmartCarbonTM approach added to relative return, as both avoidance of the Energy sector and the allocation to energy efficiency companies had a modestly positive impact on performance. Over the period since this approach was integrated into the process, it has added 1.73% of relative annualized return compared to the EAFE Index (21-month period: 9/30/19 – 06/30/21). Both aspects of the approach have benefited performance, an overweight toward energy efficiency companies and no exposure to the Energy sector.


(as of 6/30/21)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception3
Pax International Sustainable Economy Fund - Investor Class-1.104.22
Pax International Sustainable Economy Fund - Institutional Class-1.014.336.8028.619.269.896.266.06
MSCI EAFE (Net) Index-
MSCI EAFE ESG Leaders (Net) Index-1.214.667.3430.059.4610.316.616.49
Lipper International Large-Cap Core Funds Index-1.465.6111.0837.137.179.385.255.20

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

(3/31/21 - 6/30/21)
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 6/30/21)
Market Cap (weighted avg.)$75,032M$79,839M
Forward Price/Earnings18.3716.49
Number of Securities271844

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 6/30/21)
AASML Holding NV 4.0%, Roche Holding, Ltd. 3.5%, SAP SE 2.2%, AstraZeneca PLC 2.1%, Novo Nordisk A/S, Class B 2.1%, Unilever PLC 1.7%, Commonwealth Bank of Australia 1.7%, L’Oreal SA 1.3%, Allianz SE 1.3% and GlaxoSmithKline PLC 1.3%. 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.

IMPX0529 (10/21)

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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Christine Cappabianca

Portfolio Manager

Christine Cappabianca is Vice President, Portfolio Manager at Impax Asset Management LLC, the North American division of Impax Asset Management Group and investment adviser to Pax World Funds.

She is a Portfolio Manager of the firm’s systematic strategies, including the Pax Ellevate Global Women’s Leadership Fund, the Pax Global Sustainable Infrastructure Fund, the Pax US Sustainable Economy Fund and the Pax International Sustainable Economy Fund.

Before joining Impax in 2021, Christine spent 14 years with Mellon, where she held several positions, most recently as senior quantitative research analyst and portfolio manager for the firm’s Internet of Things, Blockchain Innovation, US Manufacturing and Smart Cures Innovation thematic strategies. She also served as the ESG data expert on Mellon’s ESG Council.

Christine earned a Bachelor of Arts in economics at Harvard University and a Master of Science in investment management at Boston University. She holds the SASB FSA Credential.

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