Performance and Portfolio Update
- The Fund underperformed the S&P 500 Index in the third quarter. Weak stock selection within Consumer Discretionary, Energy and the Materials sectors were negative contributors to performance.
- Large-cap stocks had a solid quarter with the S&P 500 Index† outperforming the Russell Midcap Index‡ by 1.01% during the period. However, the S&P 500 Index underperformed the Russell 2000 Index§ (representing small-caps) by 1.19%.
- Within Consumer Discretionary, Newell Brands was one of our largest detractors due to a small miss in sales even though earnings were in line with expectations. Investors voiced concern over the length of time it took to sell their ski business, destocking pressures and the bankruptcy of one of their retail distributors. Also, management had cautionary comments about their 2018 outlook.
- Poor stock selection in the Energy sector led by Pioneer Natural Resources detracted from performance. Although Pioneer beat both earnings and revenue estimates, drilling delays and higher than expected gas output from new wells concerned investors.
- The Healthcare sector contributed positively to performance. Biotechnology companies (Biogen, Celgene and Gilead) held by the Fund posted strong returns for the period.
- US equities continue to rise driven largely by momentum and without much regard for risk. At quarter end, the S&P 500 Index valuation was at multi-decade highs while the VIX IndexÎ”, a common measure of investor risk, was at a 10-year low. In such an environment, we remain especially vigilant about portfolio risk and individual stock valuations and are working to maintain a higher quality, fundamentally sound portfolio that is well positioned to perform strongly as we transition from the current momentum-driven market environment to one that rewards fundamentals.
Performance(as of 9/30/17)
|1-Month||Quarter||YTD||1 Year||3 Year||5 Year||10 Year||Since Inception1|
|Large Cap Fund - Individual Investor Class||1.19||3.75||12.68||-||-||-||-||11.74|
|Large Cap Fund - Institutional Class||1.19||3.85||12.86||-||-||-||-||11.91|
|S&P 500 Index||2.06||4.48||14.24||18.61||10.81||14.22||7.44||13.35|
|Lipper Large-Cap Core Funds Index||2.50||4.45||13.75||18.49||9.73||13.42||6.66||12.85|
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 paxworld.wpengine.com
Figures include reinvested dividends, capital gains distributions, and changes in principal value.
1The inception date for the Pax Large Cap Fund Institutional Class and the Individual Investor Class is December 16, 2016.
As of 5/1/17 prospectus, total annual Pax Large Cap Fund operating expenses, gross of any fee waivers or reimbursements (excluding Acquired Fund fees and expenses), for Individual Investor Class and Institutional Class shares are 0.96% and 0.71%, respectively.
(as of 9/30/17)
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 9/30/17)
|Market Cap (weighted avg.)∱||$224,613M||$177,837M|
|Number of Securities||43||505|
Top Ten Holdings
(as of 9/30/17)
Apple, Inc. 5.7%, Microsoft Corp. 5.4%, Amazon.com, Inc. 4.1%, Cisco Systems, Inc. 4.0%, Berkshire Hathaway, Inc., Class B 3.8%, Stanley Black & Decker, Inc. 3.3%, Ingersoll-Rand PLC 3.2%, Thermo Fisher Scientific, Inc. 2.9%, PepsiCo, Inc. 2.9% and Merck & Co., Inc. 2.8%. Holdings are subject to change.
†The S&P 500 Stock Index is an unmanaged index of large capitalization common stocks. One cannot invest directly in any index.
‡The Russell Midcap Index measures performance of the mid-capitalization sector of the US equity market. The index is a float-adjusted, capitalization-weighted index of the 800 smallest issuers in the Russell 1000 Index. The index is a subset of the Russell 1000 Index and serves as the underlying index for the Russell Midcap Growth and Value Index series. The Index is reconstituted annually. One cannot invest directly in any index.
§The Russell 2000 Index measures the performance of the small-cap segment of the US equity universe. The Russell 2000 Index is a subset of the Russell 3000 Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. One cannot invest directly in any index.
Î”The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) is a measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. It is a widely-used measure of market risk and shows the market’s expectation of 30-day volatility. One cannot invest directly in any index.
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.
∞An Ex-Ante Beta is used for Funds with less than 2 years of performance history under its new mandate. 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.