Performance and Portfolio Update

  • The Pax Large Cap Fund performed in-line with the S&P 500 Index during the second quarter of 2020. Performance relative to the benchmark was driven by positive stock selection and offset by negative sector allocation.
  • Over the three-year period ending June 30, 2020, the Fund’s institutional class has outperformed the S&P 500 Index and ranks in the top 4% out of (1,230) Morningstar Large Blend peers.1 Also, the Fund has earned a 5-Star Overall Morningstar Rating based on risk-adjusted returns in the Large Blend category (1,230) peers.2
  • Turning to attribution during the second quarter, there was very positive relative performance from the Consumer Discretionary, Financial and Utilities sectors. Outperformance in the Consumer Discretionary sector was driven primarily by exposure to home improvement retailer Lowe’s and automotive supplier Aptiv, both of which rebounded from depressed levels at the end of the first quarter. Lowe’s has executed very well with their most recent comparative store sales growth of over 12%, as consumers spent more on home improvement projects during the latest quarter. Aptiv took steps to preserve liquidity during the historic automotive shutdown by eliminating its dividend and raising equity. Relative outperformance in the Financial sector was driven by a strong rebound of Citizens Financial and AIG. Utilities sector outperformance was primarily driven by the Fund’s zero weight in the electric utilities industry.
  • The Fund’s worst performing sectors were Health Care, Industrials and Materials. The Health Care sector was a relative safe haven during the first quarter market sell-off, but it lagged the overall market during the second quarter’s sharp rebound. During the quarter, we reduced the Health Care sector allocation from a large overweight position to a slight underweight. Within Health Care, weak relative performance of Merck, Medtronic and Biogen contributed to the weak sector performance. Within Industrials, Xylem was an underperformer as the company cut guidance on demand weakness in their businesses. In Materials, Vulcan Materials underperformed the industry’s strong rebound, but we remain confident that any increase in infrastructure spending will serve as a strong tailwind for Vulcan’s shares.
  • During the quarter, the S&P 500 rebounded significantly, transitioning to a new bull market in record time. The amount of liquidity pumped into the financial system has reduced the imminent risk of bankruptcy for many companies reliant on discretionary spending, but it appears that it will take a number of years for wide swaths of the US economy to heal. A common theme across the first half of the year has been the strong outperformance of the Technology sector, which now accounts for a very meaningful 27% of the S&P 500 Index. We are currently equal weighted with the S&P 500 in the Technology sector, but we have recently identified some interesting software companies with leverage to an improving economy.
  • The US large cap market has been on a gut-wrenching roller coaster ride but remarkably has ended down only -3% year-to-date as represented by the S&P 500 Index. The second half of 2020’s performance in our view will likely be driven by macro factors such as the country’s success in controlling the further spread of COVID-19, the government’s appetite for additional fiscal and monetary accommodations and the election results in November. We remain focused on these issues as well as bottom-up company execution on growth, cost, and capital programs. We continue to emphasize companies that have durable business models with growth and valuation drivers. We believe our investment approach, which seamlessly integrates fundamental and sustainability 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 6/30/20)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception4
Pax Large Cap Fund - Investor Class2.6419.95-211.3911.71--12.18
Pax Large Cap Fund - Institutional Class2.7920.09-1.8511.7712.03--12.47
S&P 500 Index1.9920.54-3.087.5110.73--11.56
Lipper Large-Cap Core Funds Index2.2320.09-

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 5/1/2020 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 0.95% and 0.70%, respectively.

Performance Attribution

(3/31/20 - 6/30/20)
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. Short term performance may not be indicative of long term results.

Portfolio Characteristics

(as of 6/30/20)
Market Cap (weighted avg.)$354,584M$388,052M
Forward Price/Earnings22.2523.38
Number of Securities48504

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 6/30/20. 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 Morningstar Rating does not include any adjustment for sales loads. 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 1230 funds overall, 5 stars out of 1230 funds for 3-years. Pax Large Cap Fund Institutional Class (PXLIX) Morningstar ratings were 5 stars out of 1230 funds overall, 5 stars out of 1230 funds for 3-years.

Top 10 Holdings

(as of 6/30/20)
Microsoft Corp. 6.5%, Apple, Inc. 4.6%,, Inc. 3.8%, Procter & Gamble Co., The 3.6%, Merck & Co., Inc. 3.0%, Lowe’s Cos., Inc. 3.0%, Bristol-Myers Squibb Co. 2.7%, T-Mobile US, Inc. 2.6%, Verizon Communications, Inc. 2.6% and United Parcel Service, Inc., Class B 2.5%. 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.

PAX009315 (10/20)

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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