Performance and Portfolio Update

  • The Fund outperformed the S&P 500 Index during the volatile first quarter of 2020. Performance relative to the benchmark in the quarter was primarily driven by positive sector allocation.
  • Over the three-year period ending March 31, 2020, the Fund’s institutional class outperformed the S&P 500 Index and ranked in the top 5% out of 1,214 Morningstar Large Blend peers.1 Also, the Fund earned a 5-Star Overall Morningstar Rating based on risk-adjusted returns in the Large Blend category (1,214 peers).2 The Fund continued its strong relative performance during the period, outperforming the S&P 500 Index for the fourth consecutive quarter3.
  • Turning to attribution during the first quarter, the Fund saw positive relative performance from the Energy, Industrial, and Real Estate sectors. The Large Cap Fund is fossil-fuel free, so the zero weight in the Energy sector helped as it was the worst-performing sector in the S&P 500 Index for the quarter, dropping more than -50%. Helping relative performance in the Industrial sector was avoidance of the aerospace industry and outperformance of Trane Technologies and new holding United Parcel Service. In the Real Estate sector, the Fund’s performance benefited from Equinix’s strong results, a data center real estate investment trust (REIT) that has shown business model resilience compared to retail, office, and apartment REITs.
  • Detracting from Fund performance were the Financials and Communications Services sectors. Within Financials, AIG was the worst performing stock as the company faces the dual challenge of low interest rates and an uncertain claims environment stemming from potential COVID-19 claims. Within Communications Services, ViacomCBS was the worst performer as the company is in the early innings of a transformative merger integration, but faces an increasingly hostile advertising environment, exacerbated by many cancelled sporting events, notably the NCAA men’s basketball tournament. We continue to hold both AIG and ViacomCBS in the portfolio at relatively small weights, as we believe asset values at each company are significantly higher than their current stock prices suggest.
  • During the quarter, the S&P 500 Index decreased by -19.6%, abruptly ending the longest bull market in history. We believe the trajectory of earnings growth during the remaining quarters of 2020 will likely mirror the trajectory of virus cases worldwide, albeit with a slight lag. The timing of an earnings recovery will also be driven by the efficacy of liquidity programs launched by the Federal Reserve and stimulus packages passed in Washington DC.
  • At the start of the year, we were guarded in our 2020 large-cap stock return expectations following such strong results in 2019. That said, we did not predict that a pandemic would profoundly impact the global economy and cause a sharp recession beginning in March. There are now many inexpensive companies compared to just a few entering the year, but a thorough analysis of business model and balance sheet resiliency is required for future value to be realized. In our view, economic growth is highly unlikely for the remainder of 2020, and when combined with political uncertainty, we would expect continued volatility for the equity markets this year.
  • Despite these economic challenges, we remain focused on bottom-up stock selection, emphasizing companies that have durable business models with growth and valuation drivers. We believe our investment approach, which seamlessly integrates fundamental and ESG analysis, will serve as a “flywheel” to drive performance over time as investors focus on the opportunities and risks arising from the transition to a more sustainable economy.


(as of 3/31/20)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception4
Large Cap Fund - Investor Class-11.11-18.30-18.30-2.556.39--7.07
Large Cap Fund - Institutional Class-10.99-18.27-18.27-2.326.67--7.34
S&P 500 Index-12.35-19.60-19.60-6.985.10--6.28
Lipper Large-Cap Core Funds Index-12.87-20.56-20.56-8.933.58--4.78

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.

4The inception date for the Pax Large Cap Fund Institutional Class and the Investor Class is December 16, 2016.

As of 5/1/19 prospectus, total annual Pax Large Cap Fund operating expenses, gross of any fee waivers or reimbursements (excluding Acquired Fund fees and expenses), for Investor Class and Institutional Class shares are 0.96% and 0.70%, respectively.

Performance Attribution

(as of 3/31/20)
Sector: Average Active Weights (%)
Total Relative Contribution (%)

XOther: ETFs (for short-term cash mgmt. purposes) and Cash & Equivalents.
Past performance is no guarantee of future results.

Portfolio Characteristics

(as of 3/31/20)
Market Cap (weighted avg.)$286,296M$284,111M
Forward Price/Earnings15.6316.68
Number of Securities47504

1 Data shown represent rankings for the Pax Large Cap Fund – Institutional Class (PXWIX) in the Morningstar Large Blend category based on average annual returns. Morningstar percentile rank is a standardized way of ranking items within a peer group, in this case, funds with the same Morningstar Category. The observation with the largest numerical value is ranked one; the observation with the smallest numerical value is ranked 100. The remaining observations are placed equal distance from one another on the rating scale. Note that lower percentile ranks are generally more favorable for returns (high returns), while higher percentile ranks are generally more favorable for risk measures (low risk). The Pax Large Cap Fund – Institutional Class (PXWIX) 1-year 4th percentile rank (43 out of 1372 funds), 3-year 5th percentile rank (43 out of 1214 funds). The Pax Large Cap Fund – Investor Class (PAXLX) 1-year 5th percentile rank (46 out of 1372 funds), 3-year 6th percentile rank (62 out of 1214 funds).

2 The Morningstar Ratings™ shown are as of 3/31/20. The Morningstar Rating for funds, or “star rating,” is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five- and ten- year (if applicable) Morningstar Rating metrics. The weights are 100% three-year rating for 36-59 months of total returns, 60% five-year rating, 40% three-year rating for 60-119 months of total returns, and 50% ten-year rating, 30% five-year rating, 20% three-year rating for 120 or more months of total returns. While the ten-year overall rating formula seems to give the most weight to the ten-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

Pax Large Cap Fund Investor Class (PAXLX) Morningstar ratings were 5 stars out of 1214 funds overall, 5 stars out of 1214 funds for 3-years. Pax Large Cap Fund Institutional Class (PXLIX) Morningstar ratings were 5 stars out of 1214 funds overall, 5 stars out of 1214 funds for 3-years.

3 PXLIX vs. S&P 500 Index’s quarterly returns: Q1-20: -18.27% vs. -19.60%, Q4-19: 10.49% vs. 9.07%, Q3-19: 3.08% vs. 1.70%, Q2-19: 4.94% vs. 4.30%.

Top 10 Holdings

(as of 3/31/20)
Microsoft Corp. 6.9%,, Inc. 4.0%, Apple, Inc. 3.8%, Procter & Gamble Co., The 3.7%, Merck & Co., Inc. 3.5%, Bristol-Myers Squibb Co. 3.0%, Verizon Communications, Inc. 2.8%,, Inc. 2.7%, Ingersoll-Rand PLC 2.6% and Equinix, Inc. 2.6%. 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 corporations’ profitability by revealing how much profit a company generates with the money shareholders have invested.
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.

PAX009164 (7/20)

Andrew Braun, Pax World Funds

Andrew Braun

Senior Portfolio Manager

Andrew Braun is Senior Portfolio Manager at Impax Asset Management LLC, the North American division of Impax Asset Management Group and investment adviser to Pax World Funds.

He is a Senior Portfolio Manager of the US Large Cap Strategy, which includes the Pax Large Cap Fund. He is also a member of the Pax Sustainable Allocation Fund portfolio management team.

Prior to joining the firm in 2017, Andy was Managing Director on the value equity team at Goldman Sachs Asset Management, where he led a team of 30 portfolio managers and analysts. Andy joined Goldman Sachs Asset Management as a Product Development Associate in 1993. He was promoted to Portfolio Manager in 2001 and served as Co-Chief Investment Officer from 2008 to 2014. Before Goldman Sachs, Andy was a Financial Analyst in the corporate finance division of Dillon, Read & Co. Inc.

Andy has a Bachelor of Arts in economics from Harvard University and a Master of Business Administration in finance and economics from the Stern School of Business at New York University.

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Barbara Browning, Pax World Funds

Barbara Browning, CFA®

Portfolio Manager

Barbara Browning is a Portfolio Manager at Impax Asset Management LLC, the North American division of Impax Asset Management Group and investment adviser to Pax World Funds.

Barbara is a Portfolio Manager of the US Large Cap Strategy, which includes the Pax Large Cap Fund.

Prior to joining the firm in 2017, Barbara was Vice President and Senior Portfolio Manager at RBC Global Asset Management, Inc., where she co-managed Diversified Core, Concentrated Core and Diversified Large Cap Value Equity funds. Prior to that, Barbara was a Senior Portfolio Manager and Investment Officer at National City Bank, a Senior Research Analyst at Banc One Investment Advisors Corporation and held various equity research positions.

Barbara has a Bachelor of Arts in economics from The Ohio State University, where she graduated cum laude. She is also a CFA® charterholder.

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