Performance and Portfolio Update

  • In the third quarter, the Pax International Sustainable Economy Fund outperformed the MSCI EAFE Index (EAFE Index).
  • Investment strategy: The strategy integrates the Impax Sustainability Lens, a proprietary tool that helps the adviser systematically overweight the portfolio toward sub-industries 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.1 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, declined by -0.45% during the third quarter. Equity markets moved negative during September, wiping out most of the early quarter gains. The Fund’s lower risk and higher quality profile, driven by its sustainable focus, helped performance during the quarter. Nine out of the 11 sectors added significantly to relative return, while a late quarter rotation toward Energy created a headwind for the Fund’s relative performance.
  • Impax Sustainability Lens attribution: Overall, Lens positioning during the quarter was strong, as high opportunity sub-industries outperformed low opportunity and high-risk sub-industries. An overweight allocation to high opportunity sub-industries added the most during the quarter, driven from strong stock specific results within Pharmaceuticals (Novo Nordisk), Life & Health Insurance (Dai-ichi Life Holdings) and Interactive Media & Services (Z Holdings Corp.). No allocation to Apparel Accessories & Luxury Goods, which we classify as low opportunity and high risk, was a strong relative contributor during the third quarter, as this sub-industry performed poorly. Companies in this area of the market have no meaningful alignment with opportunities associated with the transition to a sustainable economy and exhibit higher risk due to environmental and social issues within their supply chains.
  • ESG ratings attribution: During the quarter, companies with higher sustainability ratings within the EAFE universe outperformed. Top tier MSCI Intangible Value Assessment (IVA) companies within the Fund added significantly to relative performance driven by strong stock specific results. A chart showing performance attribution by ESG ratings over the trailing three months and since the Fund’s inception is available below. Since inception, 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 detracted from relative return. Energy was the best performing sector for the Index in the third quarter and since the Fund avoids investments in the sector, it was a significant detractor from relative performance. This more than offset the modest positive impact from the Fund’s reinvestment to energy efficiency companies. During the period, the Fund crossed its two-year anniversary since integrating this approach into the process and it has added 2.41% of relative annualized return compared to the EAFE Index (2-year period: 9/30/2019 – 9/30/2021). Both aspects of the approach have benefited performance, an overweight toward energy efficiency companies and no exposure to the Energy sector.


(as of 9/30/21)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception2
Pax International Sustainable Economy Fund - Investor Class-4.040.467.1322.948.468.628.085.70
Pax International Sustainable Economy Fund - Institutional Class-4.030.567.4023.378.768.888.365.97
MSCI EAFE (Net) Index-2.90-0.458.3525.737.628.818.105.60
MSCI EAFE ESG Leaders (Net) Index-3.050.437.8024.128.939.168.69 6.37
Lipper International Large-Cap Core Funds Index-3.09-2.008.8628.296.197.707.534.88

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.

As of 5/1/2021 prospectus, total annual Pax International Sustainable Economy Fund operating expenses, gross of any fee waivers or reimbursements (excluding Acquired Fund fees and expenses), for Institutional Class and Investor Class are 0.48% and 0.73%, respectively.ˆ

2The 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

(6/30/21 - 9/30/21)
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 9/30/21)
Market Cap (weighted avg.)$76,142M$78,497M
Forward Price/Earnings17.6215.39
Number of Securities267844

1MSCI 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 9/30/21)
ASML Holding NV 4.2%, Roche Holding, Ltd. 3.3%, Novo Nordisk A/S, Class B 2.3%, AstraZeneca PLC 2.1%, SAP SE 2.0%, Commonwealth Bank of Australia 1.7%, Unilever PLC 1.6%, Allianz SE 1.3%, Schneider Electric SE 1.3% and GlaxoSmithKline PLC 1.2%. 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.

IMPX0731 (1/22)

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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