Performance and Portfolio Update

  • The Pax Large Cap Fund underperformed the S&P 500 Index during the third quarter. Underperformance was primarily due to security selection within the Health Care and Consumer Discretionary sectors. Positive sector allocation provided a slight offset to the underperformance.
  • Over the three-year period ending September 30, 2021, the Fund’s institutional class outperformed the S&P 500 Index and ranked in the top 3% (28 out of 1,257) for returns among Morningstar Large Blend peers. Also, as of September 30, 2021, the Fund earned a 5-Star Overall Morningstar Rating based on risk-adjusted returns in the Large Blend category (1,257 peers).1
  • During the third quarter, the Fund’s largest detractor to relative performance was the Health Care sector, followed by the Consumer Discretionary sector. Within Health Care, pharmaceutical holding Bristol-Myers Squibb and biotechnology holding Vertex Pharmaceuticals mutually lost -10% during the quarter despite solid earnings results from each company. Higher growth pharmaceutical companies were in favor with investors during this particular period. Within Consumer Discretionary, Aptiv was the largest detractor amid a very difficult quarter for auto manufacturing due to widespread supply chain disruptions. We continue to hold these three stocks in the portfolio as we believe the fundamental thesis for each remains intact and valuations are attractive.
  • During the third quarter, the Fund experienced strong relative performance from five sectors, with Financials performing best. Outperformance in the Financial sector was driven primarily by insurance holding Lincoln Financial and bank holdings Citizens Financial and JPMorgan Chase. All three of these companies have executed their business strategies well and we believe they should benefit from a potentially higher and steeper yield curve in the future.
  • As we near the end of an eventful 2021, greater confidence in a full reopening of the economy has been offset by increased concern about supply shortages and inflationary pressures impacting corporate margins. We believe the earnings trajectory of large US companies will moderate over the next few quarters leading to a more uneven return profile for the equity market. While macro-economic topics tend to dominate the daily headlines, the Fund is driven by bottom-up fundamentals and aims for a relatively balanced portfolio exposure across many macro factors. The Fund currently has a value tilt based on our belief that economic activity and interest rates will continue to normalize in the quarters ahead. We remain keenly focused on sustainability “megatrends” that have the potential to shape the investment landscape for decades to come and we continue to emphasize companies that have durable business models along with company-specific growth and valuation drivers.
  • We believe our innovative investment approach, integrating fundamental and sustainability analysis, should continue to act 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 9/30/21)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception3
Pax Large Cap Fund - Investor Class-5.30-0.2119.0435.7218.95--18.53
Pax Large Cap Fund - Institutional Class-5.28-0.1419.2636.0619.23--18.81
S&P 500 Index-4.650.5815.9230.0015.99--16.58
Lipper Large-Cap Core Funds Index-4.94-0.4814.3528.2214.12--14.94

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 5/1/2021 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.ˆ

Performance Attribution

(6/30/21 - 9/30/21)
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 9/30/21)
Market Cap (weighted avg.)$477,515M$563,698M
Forward Price/Earnings19.0121.03
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 (PXLIX) 1-year 12th percentile rank (146 out of 1380 funds), 3-year 3rd percentile rank (28 out of 1257 funds). The Pax Large Cap Fund – Investor Class (PAXLX) 1-year 13th percentile rank (156 out of 1380 funds), 3-year 3rd percentile rank (33 out of 1257 funds).

The Morningstar Ratings™ shown are as of 9/30/21. 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 1257 funds overall, 5 stars out of 1257 funds for 3-years. Pax Large Cap Fund Institutional Class (PXLIX) Morningstar ratings were 5 stars out of 1257 funds overall, 5 stars out of 1257 funds for 3-years.

Top 10 Holdings

(as of 9/30/21)
Microsoft Corp. 6.3%, Apple, Inc. 3.9%, Alphabet, Inc., Class A 3.2%,, Inc. 2.8%, T-Mobile US, Inc. 2.8%, United Parcel Service, Inc., Class B 2.7%, Applied Materials, Inc. 2.7%, Procter & Gamble Co., The 2.7%, Citizens Financial Group, Inc. 2.7% and CVS Health Corp. 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.

IMPX0729 (1/22)

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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