Performance and Portfolio Update

  • The Pax Large Cap Fund outperformed the S&P 500 Index during the third quarter of 2020. Performance relative to the benchmark was mostly driven by positive stock selection and was also aided by positive sector allocation during the quarter.
  • Over the three-year period ending September 30, 2020, the Fund’s institutional class has outperformed the S&P 500 Index and ranks in the top 3% out of 1,229 (27 out of 1229) 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 (1,229) peers.2
  • Turning to attribution during the third quarter, the Fund generated positive outperformance in seven of 11 sectors, with the strongest relative performance from the Industrial and Consumer Discretionary sectors. Outperformance in the Industrial sector was driven primarily by exposure to parcel shipper UPS and HVAC supplier Trane Technologies. UPS was a beneficiary of a massive uptick in shipment volume during the quarter and benefitted from a new approach to capital allocation undertaken by new CEO Carol Tomé. Trane rebounded from depressed levels during the quarter and should benefit from a strong focus on indoor air quality in the wake of the COVID-19 pandemic. Outperformance in the Consumer Discretionary sector was driven primarily by exposure to home improvement retailer Lowe’s and general merchandise retailer Target, both of which reported very strong growth and profit metrics during the quarter.
  • The Fund’s worst performing sectors were Health Care and Financials. For the second quarter in a row both sectors lagged the S&P 500 Index. During the quarter, we rebuilt the Health Care sector allocation from an underweight position to a material overweight position due largely to very attractive valuations in the space. Cigna underperformed despite solid execution and inexpensive valuation, as health maintenance organizations (HMOs) have been out of favor ahead of an uncertain election season. The Financials sector also appears to be quite cheap after considering the material underperformance in the third quarter and an expected rebound in the sector’s profitability beginning in the current quarter. AIG was a notable underperformer based on the company’s exposure to an outsized number of natural catastrophes during the quarter and the impact of lower interest rates on the company’s future earnings power.
  • During the quarter, the S&P 500 Index continued to rise above pre-pandemic levels, as lower interest rates and investors’ willingness to assume a return to normalized earnings in 2022 has provided a powerful set of catalysts. The US large cap market is likely to remain volatile for the rest of 2020, as open questions are addressed surrounding the US election, further fiscal stimulus and trade tensions. Nevertheless, we remain focused on these issues as well as the ability of our portfolio holdings to execute on growth, cost, and capital programs. Our stock selection process continues 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 9/30/20)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception3
Pax Large Cap Fund - Investor Class-2.9410.768.5419.8114.16--14.37
Pax Large Cap Fund - Institutional Class-2.9310.738.6820.0714.44--14.63
S&P 500 Index-3.808.935.5715.1512.28--13.28
Lipper Large-Cap Core Funds Index-3.238.543.5512.7510.44--11.68

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.

3The 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

(6/30/20 - 9/30/20)
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 9/30/20)
Market Cap (weighted avg.)$391,031M$452,913M
Forward Price/Earnings22.8423.83
Number of Securities45504

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 (PXLIX) 1-year 7th percentile rank (83 out of 1370 funds), 3-year 3rd percentile rank (27 out of 1229 funds). The Pax Large Cap Fund – Investor Class (PAXLX) 1-year 8th percentile rank (87 out of 1370 funds), 3-year 4th percentile rank (40 out of 1229 funds).

2 The Morningstar Ratings™ shown are as of 9/30/20. 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 1229 funds overall, 5 stars out of 1229 funds for 3-years. Pax Large Cap Fund Institutional Class (PXLIX) Morningstar ratings were 5 stars out of 1229 funds overall, 5 stars out of 1229 funds for 3-years.

Top 10 Holdings

(as of 9/30/20)
Microsoft Corp. 5.9%, Apple, Inc. 5.0%,, Inc. 3.7%, Procter & Gamble Co., The 3.3%, Lowe’s Cos., Inc. 3.1%, Voya Financial, Inc. 3.0%, United Parcel Service, Inc., Class B 2.9%,, Inc. 2.8%, Trane Technologies PLC 2.8% and Bristol-Myers Squibb Co. 2.8%. 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.

PAX009502 (1/21)

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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