Performance and Portfolio Update

  • The Fund underperformed the MSCI EAFE Index during the quarter, as high beta and momentum stocks were primary drivers in international developed market returns during Q3. These conditions were unfavorable based on the Fund’s lower risk profile, a byproduct of the Fund’s ESG focus. The Fund’s Institutional Class (PXNIX) has produced 11% lower beta and 9% lower risk (as measured by standard deviation) than the EAFE Index over the trailing 3 years, ending September 30, 2017.
  • International developed markets, as represented by the MSCI EAFE Index had strong absolute results for the third straight quarter, posting a 5.40% return, outpacing US equity markets return of 4.48%, as represented by the S&P 500 index.Δ
  • The Fund’s ESG profile detracted from relative performance versus the MSCI EAFE Index during the quarter. To measure and analyze the ESG contribution to relative performance we delineate stocks into three tiers based on MSCI IVA ratings.8 For the quarter, an overweight to the highest-rated and an underweight to the lowest-rated groups detracted the most from relative performance. Longer term since the Fund’s inception, an overweight to the highest- and average-rated ESG companies has contributed to relative performance.
  • From a sector perspective, seven out of the 11 sectors produced negative relative results in the third quarter. Stock selection and an underweight allocation in the Consumer Discretionary and Energy sectors detracted from performance. In addition, the Materials sector and the Fund’s underweight to more sustainability-challenged Metals & Mining companies detracted from performance.
  • Stock selection within Health Care, Financials and Consumer Staples helped relative results. Underweight positions in the Biotech and Food industries were also additive to the Fund’s performance.
  • On a regional basis, the Pacific and European regions detracted from relative performance versus the MSCI EAFE Index. Within the Pacific region, Australia and Japanese ESG leaders detracted, and in Europe, the UK, Italy and France produced negative relative results in Q3.


(as of 9/30/17)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
Pax MSCI EAFE ESG Leaders Index Fund - Individual Investor Class2.004.8119.4116.274.538.07-5.06
Pax MSCI EAFE ESG Leaders Index Fund - Institutional Class2.044.9019.6416.464.828.33-5.33
MSCI EAFE ESG Leaders (Net) Index2.205.1719.2117.285.708.92-5.87
MSCI EAFE (Net) Index2.495.4019.9619.105.048.381.345.14
Lipper International Large-Cap Core Funds Index2.645.7821.2120.

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.

1The inception date for the Pax MSCI EAFE ESG Leaders Index Fund Institutional Class is January 27, 2011 and the Individual Investor Class inception date is March 31, 2014.

As of 5/1/17 prospectus, total annual Pax MSCI EAFE ESG Leaders Index Fund operating expenses, gross of any fee waivers or reimbursements, for Individual Investor Class and Institutional Class shares are 0.80% and 0.55%, respectively.

Performance Attribution

ESG Ratings

(as of 9/30/17)
Average Active Weights (%)
3-month Relative Contribution (%)Since Inception 1/27/11
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.)$56,989M$62,697M
Forward Price/Earnings15..9715.45
Number of Securities318926


Top Ten Holdings

(as of 9/30/17)
Novartis AG 2.4%, Roche Holding AG 2.3%, GlaxoSmithKline PLC 1.8%, SAP SE 1.7%, Total SA 1.7%, Commonwealth Bank of Australia 1.7%, Novo Nordisk A/S, Class B 1.6%, BASF SE 1.5%, Unilever PLC 1.4% and Siemens AG 1.4%. Holdings are subject to change.


Standard Deviation measures a Fund’s variation around its mean performance; a high standard deviation implies greater volatility.
The Pax MSCI EAFE ESG Leaders Index Fund — Institutional Class (PXNIX) three-year beta is 0.89 compared to 1.00 for the MSCI EAFE Index. The Fund’s (PXNIX) three-year standard deviation is 11.06 compared to 12.09 for the MSCI EAFE Index. The minimum investment needed for investment in PXNIX is $250,000.
ΔThe S&P 500 Stock Index is an unmanaged index of large capitalization common stocks. One cannot invest directly in any index.
8IVA stands for Intangible Value Assessment.
MSCI ESG Research evaluates companies’ ESG characteristics and derives corresponding ESG scores and ratings. Companies are ranked by ESG score against their sector peers to determine their eligibility for the MSCI ESG indices. MSCI ESG Research identify es the highest-rated companies in each peer group to meet the float-adjusted market capitalization sector targets. The rating system is based on general and industry-specific ESG criteria, assigning ratings on a 7-point scale from AAA (highest) to CCC (lowest).
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.
A historical Beta is used for Funds with greater than 2 years of performance history under the same mandate. Three year Beta is used. Beta reflects the sensitivity of a Fund’s return to fluctuations in its benchmark; a beta for a benchmark is 1.00: a beta greater than 1.00 indicates above average volatility and risk.

On 3/31/2014 Pax International Fund and Pax MSCI EAFE ESG Index ETF merged into the Pax MSCI International ESG Index Fund (the Fund), a passively managed index fund which seeks investment returns that closely correspond to the price and yield performance, before fees and expenses, of the MSCI EAFE ESG Index. Based on the similarity of the Fund to Pax MSCI EAFE ESG Index ETF, Pax MSCI EAFE ESG Index ETF (the Predecessor Fund) is treated as the survivor of the mergers for accounting and performance reporting purposes. Accordingly, all performance and other information shown for the Fund for periods prior to 3/31/2014 is that of the Predecessor Fund.

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.

PAX007456 (1/18)

Scott LaBreche

Portfolio Manager

Scott LaBreche is Portfolio Manager & VP, Portfolio Analytics, at Impax Asset Management LLC, the North American division of Impax Asset Management Group and investment adviser to Pax World Funds.

Scott is a Portfolio Manager of the Global Women’s Leadership Strategy, which includes the Pax Ellevate Global Women’s Leadership Fund. He is also a Portfolio Manager of the Pax International Sustainable Economy Fund, the Pax Global Sustainable Infrastructure Fund and the Pax U.S. Sustainable Economy Fund.

He is responsible for portfolio management of systematic strategies, portfolio analytics and risk oversight, and quantitative ESG research.

Before joining Impax in 2007, Scott was a Securities Fund Analyst at Lincoln Financial Group. He has been in the investment management industry since 1999.

Scott holds a Bachelor of Science in business administration and a Master of Business Administration with advanced certificate in finance from Southern New Hampshire University.

Recent Insights

Christopher Brown

Formerly the Chief Investment Strategist for Pax World Funds and a past member of the portfolio management teams for the Pax Balanced Fund, Pax Large Cap Fund and Pax MSCI EAFE ESG Leaders Index Fund, Chris Brown began his tenure at the firm in 1998, when he joined the company as Co-Portfolio Manager of the Pax Balanced Fund.

Prior to joining the firm, Chris was a Senior Manager at Fahnestock and Co., Inc., a New York Stock Exchange brokerage firm, from 1987 to 1998, and First Vice President from 1994 to 1998. Chris was also a Senior Vice President of H.G. Wellington and Co., Inc., from April 1998 to July 2006, where he served as an adviser on separately managed accounts. He is a graduate of the Boston University School of Management with a concentration in finance.

Authored Insights

Greg Hasevlat

Senior Sustainability and ESG Analyst

Greg Hasevlat is a Senior Sustainability and ESG Analyst at Impax Asset Management LLC, the North American division of Impax Asset Management Group and investment adviser to Pax World Funds. He evaluates the environmental, social and governance performance of companies for potential inclusion in the firm’s portfolios.

He is also involved in shareholder and public policy engagement and coordinating the firm’s sustainability reporting. Greg is a member of the Impax Gender Analytics Team.

Prior to joining the firm in 2009, Greg was Government Affairs Representative at a New Hampshire‑based consulting firm, where he represented clients from various industries before the New Hampshire legislature.

Greg received a bachelor’s degree in English from the University of New Hampshire and an MBA from Southern New Hampshire University.

Authored Insights

Scroll to top
User Agent: CCBot/2.0 (