• The Pax Large Cap Fund underperformed the S&P 500 Index during the fourth quarter. Underperformance was primarily due to security selection within Health Care. Positive sector allocation provided a slight offset to the underperformance.
  • 2021 completes an outstanding five year period since the inception of the Fund in December 2016. Over the trailing five year period ending 12/31/2021, the Fund’s institutional class (PXLIX) outperformed the S&P 500 Index by 1.89% annualized and ranks in the 2nd percentile in the Morningstar Large Blend peer group (25th out of 1,109 funds).2 The Fund has maintained strong performance in a variety of market environments over its five-year track record. Looking ahead, we are confident that our process will continue to identify attractive investment ideas associated with the transition to a more sustainable economy.

Market Review

  • The S&P 500 Index had a very strong fourth quarter, up 11, after a temporary pause in stock market momentum during the third quarter. Despite converging headwinds from inflation, interest rates, COVID-19 and geopolitical uncertainties, US large cap stocks continue to be a haven of strength within global equity markets. Heading into the fourth quarter, we were expecting a normalization of price multiples and anticipated that stocks would grow into their seemingly outsized valuations. Yet during the quarter, there were still several very expensive stocks that had outsized influence on the overall direction of the S&P 500 Index. That said, we did see weakness in some of the most speculative areas of the market during the fourth quarter, including SPACs1 and recent initial public offerings (IPOs).


  • Strong contributions from the Communication Services and Industrial sectors aided results this quarter. Within the Communications Services sector, where nearly every stock had a negative return for the quarter, the Fund benefitted from Alphabet’s strong performance (up 8%). Alphabet is expected to post approximately 100% earnings growth on 40% revenue growth for 2021, while generating strong free cash flow. Within the Industrials sector, our patience was rewarded, as both United Parcel Service (up 18%) and Trane Technologies (up 17%) reversed last quarter’s underperformance. These solid franchises demonstrated strong pricing power during a challenging inflationary period. Trane in particular has a substantial backlog of projects to work through in 2022 and beyond, as industrial demand strengthens and focus on improved indoor air quality continues to grow.


  • The Health Care sector was the largest detractor during the quarter. A difficult quarter for Medtronic (down -17%) was characterized by delayed procedure volumes, which was exacerbated by hospital labor shortages and a quality control issue in one of its diabetes product facilities. Organon (down -6%), continued to underperform after its spin-out from Merck, due to weak results from its core women’s health business. We continue to believe in the company’s transformation and remain holders of the stock.


  • As we look into 2022, we have confidence that the reopening of the economy will continue. We are concerned that wage and inflationary pressures could cause the Federal Reserve (Fed) to reverse the very easy monetary policy that has been in place for the last two years. Increasing interest rates should lead to an increase in the cost of capital for all companies, which would be a more notable headwind for the most expensive companies in the market. We also believe the earnings trajectory of large US companies will continue to moderate over the next few quarters.
  • While macroeconomic topics tend to dominate the daily headlines, the Fund is driven by bottom-up fundamental research and we seek a relatively balanced portfolio exposure across many macroeconomic 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.


(as of 12/31/21)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception3
Pax Large Cap Fund - Investor Class5.339.6830.5730.5729.6120.06-19.70
Pax Large Cap Fund - Institutional Class5.379.7830.9230.9229.9320.36-19.99
S&P 500 Index4.4811.0328.7128.7126.0718.47-18.12
Lipper Large-Cap Core Funds Index4.6310.2226.0426.0423.5916.71-16.37

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

(9/30/21 - 12/31/21)
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 12/31/21)
Market Cap (weighted avg.)$557,027M$674,286M
Forward Price/Earnings20.3522.51
Number of Securities50505

1 SPACs stand for special purpose acquisition companies.

2Data 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 9th percentile rank (95 out of 1382 funds), 3-year 2nd percentile rank (18 out of 1244 funds), and 5-year 2nd percentile rank (25 out of 1109 funds). The Pax Large Cap Fund – Investor Class (PAXLX) 1-year 10th percentile rank (111 out of 1382 funds), 3-year 2nd percentile rank (20 out of 1244 funds), and 5-year 4th percentile rank (37 out of 1109 funds).

The Morningstar Ratings™ shown are as of 12/31/21. 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 1244 funds overall, 5 stars out of 1244 funds for 3-years and 5 stars out of 1109 funds for 5-years. Pax Large Cap Fund Institutional Class (PXLIX) Morningstar ratings were 5 stars out of 1244 funds overall, 5 stars out of 1244 funds for 3-years and 5 stars out of 1109 funds for 5-years.

Top 10 Holdings

(as of 12/31/21)
Microsoft Corp. 6.7 %, Apple, Inc. 4.4%, Alphabet, Inc., Class A 3.6%, Procter & Gamble Co., The 2.8%,, Inc. 2.6%, Alphabet, Inc., Class C 2.5%, Lowe’s Cos., Inc. 2.5%, Citizens Financial Group, Inc. 2.4%, Applied Materials, Inc. 2.4% and CVS Health Corp. 2.3%. 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.

IMPX0906 (4/22)

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.

Recent Insights

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

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