Performance and Portfolio Update
- The Pax Large Cap Fund outperformed the S&P 500 Index† during the fourth quarter.
- Equities enjoyed a favorable market backdrop in the quarter as economic growth continued its positive momentum, and passage of the first tax reform bill in a generation caused 2018 earnings estimates to rise materially for many US-centric companies.
- Strong stock selection in Consumer Discretionary, Energy and Technology drove the outperformance in the quarter, partially offset by an overweight and weak performance in the Biotechnology industry.
- Amazon was the strongest contributor to performance in the quarter, as the company continues to exhibit extraordinary growth in e-commerce sales and web services revenues.
- Home Depot, a new holding this quarter, reported 7.9% same store sales growth in the third quarter, and predicted continued strong results for the next three years.
- Celgene was the biggest detractor to performance for the quarter as the company announced disappointing clinical results for a drug treating Crohn’s disease and a slight revenue miss for a drug treating plaque psoriasis.
- During the quarter, we cut exposure to the Health Care sector by 5% and increased exposure to Technology by 5.5% to be more in-line with the benchmark. Heading into 2018, we are very pleased with the positioning of the portfolio as we seek to drive performance through stock selection and mitigate the extent to which sector bets can influence portfolio returns.
Performance(as of 12/31/17)
|1-Month||Quarter||YTD||1 Year||3 Year||5 Year||10 Year||Since Inception1|
|Large Cap Fund - Individual Investor Class||1.48||7.08||20.65||20.65||-||-||-||18.91|
|Large Cap Fund - Institutional Class||1.59||7.18||20.96||20.96||-||-||-||19.21|
|S&P 500 Index||1.11||6.64||21.83||21.83||11.41||15.79||8.50||20.09|
|Lipper Large-Cap Core Funds Index||1.37||6.29||20.90||20.90||10.47||14.62||7.58||19.20|
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 12/31/17)
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 12/31/17)
|Market Cap (weighted avg.)∱||$229,247M||$197,253M|
|Number of Securities||43||505|
Top Ten Holdings
(as of 12/31/17)
Apple, Inc. 5.8%, Microsoft Corp. 4.2%, Amazon.com, Inc. 4.2%, PepsiCo, Inc. 3.2%, Zoetis, Inc. 3.2%, Bank of America Corp. 3.0%, Home Depot, Inc., The 3.0%, Walt Disney Co. 2.8%, Johnson & Johnson 2.7% and Ingersoll-Rand PLC 2.7%. 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.
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.