• The Pax Large Cap Fund outperformed the S&P 500 Index during the second quarter. The Fund’s outperformance was driven by strong stock selection, primarily in the Health Care and Information Technology (IT) sectors.

Market Review

  • Volatility has remained high in both the equity and bond markets, as high inflation, rising interest rates, and supply chain disruptions drove equities to deliver one of the worst quarterly returns of the past 30 years. The S&P 500 was down 16.10%, in line with developed large cap markets globally, as investors contemplated the Fed tightening program, and the ability of firms to navigate inflationary and supply complexities against a less certain growth environment.


  • The top contributing sectors during the quarter were Health Care and IT. Within Health Care, the Fund benefitted from its holdings in Merck & Co (up 12%) and Vertex Pharmaceuticals (up 8%). Prices of Merck shares were higher as the new management team is looking to grow its business more aggressively. Its premier oncology franchise and strong vaccine and animal health businesses provide a solid platform for growth. Vertex has seen good results from its dominant position in Cystic Fibrosis (CF) therapy and is developing a strong pipeline for several novel therapies. In Technology, PTC (down 1%) outperformed the market in the quarter as strong recurring revenue growth, free cash flow, and bookings beat expectations.
  • Within Communications Services, T-Mobile (up 5%) has performed strongly in an uncertain environment. The firm’s competitive 5G position, limited exposure to inflation, and defensive business model should provide management with the flexibility to execute on a significant share repurchase program over the next 36 months.


  • Utilities (down 5%) and Energy (down 5%) were again among the best performing areas of the S&P 500 Index for the quarter, and the portfolio’s fossil-fuel-free position led to these sectors detracting from relative returns. The stock detractors were driven primarily by the current macro cross winds. In Technology, Applied Materials (down 31%) saw production shortfalls because of COVID related supply chain issues, which the company expects to continue in the short term. Long term demand for equipment in chip manufacturing remains strong.
  • In Consumer Discretionary, Target (down 33%) was weaker as below expectations earnings, increasing cost pressures, and a significant inventory write down in the quarter weighed on the shares. The team continue to monitor the company but expect the revenue growth story will remain intact despite these temporary inventory pressures.
  • In Financials Lincoln National (down 28%) saw higher Covid-related payouts than expected from its insurance platform, and the sharp market drop this year had a negative impact on asset management revenues.
  • Inflation concerns impacted stock selection in Materials and Consumer Discretionary sectors. Within Materials, Crown Holdings (down 26%), encountered weaker short term consumer demand in Brazil, higher energy prices and adverse currency trends. The trends towards aluminum consumer packaging and its infinite recyclability offer attractive long-term opportunities in an oligopolistic market.


  • The equity market has many challenges to face over the short to medium term. Recession risk has been increasing as interest rate hikes and inflation are expected to slow economic growth over the next few quarters. Given this backdrop, the portfolio is somewhat cautiously positioned. The investment team are looking to identify stocks with attractive long term growth expectations that have become more attractively valued in this drawdown, and remain focused on sustainability “megatrends” that have the potential to shape the investment landscape for decades to come. Emphasizing companies that have durable business models along with company-specific growth and valuation drivers has and will continue to be a key focus on the portfolio.
  • The portfolio has offered attractive downside capture in one of the weakest quarterly environments of the past 30 years. Despite a challenging market backdrop, the investment process continues to bear fruit, and long-term prospects remain intact. The portfolio has maintained attractive performance to peers, as noted by the ranking of the Fund’s institutional class in Morningstar’s Large Blend category for the 3-year (1st percentile rank, out of 1,080 funds) and 5-year (1st percentile rank, out of a universe of 1,010 funds) periods ending June 30, 2022.1


(as of 6/30/22)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception2
Pax Large Cap Fund - Investor Class-7.21-14.61-19.79-12.2113.7413.02-13.19
Pax Large Cap Fund - Institutional Class-7.13-14.57-19.68-11.9514.0413.31-13.47
S&P 500 Index-8.25-16.10-19.96-10.6210.6011.31-11.78
Lipper Large-Cap Core Funds Index-7.76-15.13-19.66-11.879.019.82-10.35

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.

2The inception date for the Pax Large Cap Fund Institutional Class and the Investor Class is December 16, 2016.

As of 5/1/2022 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 0.97% and 0.71%, respectively.ˆ

Performance Attribution

(3/31/22 - 6/30/22)
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 6/30/22)
Market Cap (weighted avg.)$403,781M$483,444M
Forward Price/Earnings17.0616.67
Number of Securities51502

1Data shown represent rankings for the Pax Large Cap Fund – Institutional Class (PXLIX) in the Morningstar Large Blend category based on the Fund’s total return. 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).

Top 10 Holdings

(as of 6/30/22)
Microsoft Corp. 6.2%, Apple, Inc. 4.6%, Alphabet, Inc., Class A 3.2%, Merck & Co., Inc. 3.1%, T-Mobile US, Inc. 2.6%, CVS Health Corp. 2.5%,, Inc. 2.4%, Alphabet, Inc., Class C 2.3%, Citizens Financial Group, Inc. 2.2% and Becton Dickinson & Co. 2.2%. 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 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.

IMPX01149 (10/22)

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.

Recent Insights

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.

Recent Insights

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