• In the fourth 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.


  • International developed equity markets, as measured by the EAFE Index, increased by 2.69% during the fourth quarter. Markets rebounded in December erasing the negative results from November, that had been caused by COVID-19 Omicron variant concerns. The Fund’s higher quality, lower volatility profile, driven by its sustainable focus, modestly helped performance during the quarter. Six out of the 11 sectors meaningfully added to relative return, while the Fund’s avoidance of lower-rated ESG companies like Nestle and Diageo within Consumer Staples as well as the market rotation toward higher beta and higher market capitalization stocks were detractors to relative performance.

Impax Sustainability Lens

  • During the fourth quarter, overall Lens positioning was a modest detractor from performance, as neutral-opportunity and high-risk sub-industries outperformed high-opportunity sub-industries. Stock selection to companies with higher ESG ratings and selection to those companies within high-opportunity sub industries was the largest contributor to relative performance. Stock specific selection within low- and neutral-risk segments was also positive. CNP Assurance, Straumann and RELX within the Life & Insurance, Health Care Equipment and Research & Consulting Services sub-industries, respectively, were standout relative performers for the quarter.
  • The Fund’s avoidance of High-Risk Low-Opportunity sub-industries detracted, as many of these sub-industries outperformed during the quarter. Apparel Accessories & Luxury Goods was the largest relative detractor in this group, despite aiding performance last quarter. Companies in this sub-industry do not have 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

  • During the quarter, companies with higher ESG ratings outperformed average and lower ESG rated companies. The Fund’s overweight positioning towards Top tier MSCI ESG Rating companies along with its underweight allocation to lower-rated ESG companies, added significantly during the quarter. Since inception, the Fund’s overweight and selection to the highest-rated Top tier MSCI ESG Rating companies has contributed the most to relative return.


  • During the quarter, both aspects of the SmartCarbonTM approach, overweighting energy efficiency companies and having no exposure to the Energy sector, added to relative return. The Fund’s avoidance of the Energy sector, which underperformed during the quarter, had a modest positive impact while its reinvestment in energy efficiency companies had an even greater impact, aided by strong stock specific results from Tokyo Electron, Schneider Electric and ASML.
  • In addition, over the period since the SmartCarbonTM approach was integrated into the investment process, it has added 2.39% of relative annualized return compared to the EAFE Index (27-month period: 9/30/2019 – 12/31/2021). Both the Fund’s avoidance of the Energy sector and an overweight toward energy efficiency companies have benefited performance.


(as of 12/31/21)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception2
Pax International Sustainable Economy Fund - Investor Class5.053.5110.8810.8814.579.958.105.90
Pax International Sustainable Economy Fund - Institutional Class5.103.5311.1911.1914.8410.228.376.17
MSCI EAFE (Net) Index5.122.6911.2611.2613.549.558.035.72
MSCI EAFE ESG Leaders (Net) Index5.423.2411.2911.2915.0310.218.69 6.53
Lipper International Large-Cap Core Funds Index4.943.0312.1612.1612.418.557.415.05

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.

Portfolio Characteristics

(as of 12/31/21)
Market Cap (weighted avg.)$83,723M$86,448M
Forward Price/Earnings17.8615.34
Number of Securities263829

1MSCI ESG Ratings uses a rules-based methodology designed to measure a company’s resilience to long-term, industry material environmental, social and governance (ESG) risks. Leveraging Artificial Intelligence (AI), machine learning and natural language processing augmented with our 200+ strong team of analysts, MSCI researches and rate companies on a ‘AAA‘ to ‘CCC’ scale according to their exposure to industry-material ESG risks and their ability to manage those risks relative to peers.

Top 10 Holdings

(as of 12/31/21)
ASML Holding NV 4.1%, Roche Holding, Ltd. 3.6%, Novo Nordisk A/S, Class B 2.5%, AstraZeneca PLC 2.3%, SAP SE 2.0%, GlaxoSmithKline PLC 1.5%, Commonwealth Bank of Australia 1.5%, Schneider Electric SE 1.5%, Unilever PLC 1.4% and BNP Paribas SA Class A 1.4%. 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.

IMPX0909 (4/22)

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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