Performance and Portfolio Update

  • The Pax MSCI EAFE ESG Leaders Index Fund outperformed the MSCI EAFE Index (EAFE Index) during the fourth quarter of 2019.
  • The Fund’s ESG profile added to relative performance versus the EAFE Index during the quarter. A chart showing performance attribution by ESG ratings over the trailing three months and since the Fund’s inception is available below. An overweight allocation to the highest-rated ESG companies has contributed the most to relative performance during the quarter as well as since inception.
  • Effective October 1, 2019, the Fund implemented SmartCarbon™ into its investment process. Our proprietary, risk-based investment process manages exposure to companies with fossil fuel reserves on their balance sheets, replacing energy1 company holdings with a diversified basket of energy efficiency stocks while maintaining the integrity of the investment process and minimizing change in tracking error. This approach reduced the Fund’s carbon intensity,2 which is now 27% lower than the EAFE Index. As a result of implementing the SmartCarbon approach, the Fund has become fossil fuel free. For more information, visit the SmartCarbon webpage and read our press release.
  • Six out of 11 sectors produced positive relative performance compared to the EAFE Index for the quarter. Industrials added the most to the Fund’s relative performance, driven by the Fund’s portfolio holdings within Industrial Conglomerates and Electrical Equipment industries. Fund holdings within the Information Technology sector, led by Semiconductors, IT Services, Electronic Equipment and Software added to relative return during the quarter. In addition, holdings and an underweight allocation in Consumer Staples helped performance during the period.
  • Conversely, holdings in Financials, driven by poor relative results within Australian banks, detracted the most from relative return. In addition, holdings within Communication Services, driven by Telecomm, detracted from performance.
  • On a regional basis, the European region added the most to relative performance, while the Pacific region detracted from relative return compared to the EAFE Index. Within Europe, companies with leading ESG profiles in Switzerland, Germany and Belgium outperformed. In the Pacific region, holdings in Japan and Hong Kong detracted the most from relative performance.


(as of 12/31/19)
Returns (%)Average Annual Returns (%)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception3
Pax MSCI EAFE ESG Leaders Index Fund - Investor Class2.998.4622.7822.789.465.37-4.85
Pax MSCI EAFE ESG Leaders Index Fund - Institutional Class2.968.5323.0123.019.735.63-5.12
MSCI EAFE ESG Leaders (Net) Index3.138.6023.8823.889.786.15-5.59
MSCI EAFE (Net) Index3.258.1722.0122.019.565.67-4.89
Lipper International Large-Cap Core Funds Index3.748.4520.5620.568.564.91-4.28

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

As of 5/1/19 prospectus, total annual Pax MSCI EAFE ESG Leaders Index Fund operating expenses, gross of any fee waivers or reimbursements, for Investor Class and Institutional Class shares are 0.80% and 0.55%, respectively.

Performance Attribution

ESG Ratings

(as of 12/31/19)
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 12/31/19)
Market Cap (weighted avg.)$56,898M$67,080M
Forward Price/Earnings16.6215.48
Number of Securities323917

1 The Energy sector is based on Global Industry Classification Standard (GICS), a widely recognized industry standard. We believe that companies with involvement in these areas of the market face substantial ESG risks and are not in alignment with the transition to a more sustainable global.

2 The MSCI Weighted Average Carbon Intensity (tCO2e/$M sales) measures a fund’s exposure to carbon intensive companies. It is calculated as the sum of security weight (normalized for corporate positions only) multiplied by the security Carbon Intensity. This allows for comparisons between funds and indices of different sizes. As of 12/31/19, the Pax MSCI EAFE ESG Leaders Index has a carbon intensity score of 107.15 compared to 147.41 for the EAFE index.

Top 10 Holdings

(as of 12/31/19)
Roche Holding AG 3.2%, SAP SE 2.0%, ASML Holding NV 1.9%, Siemens AG 1.7%, GlaxoSmithKline PLC 1.6%, Novo Nordisk A/S, Class B 1.4%, Allianz SE 1.4%, Commonwealth Bank of Australia 1.3%, Unilever NV 1.2% and Sony Corp. 1.2%. Holdings are subject to change.


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 identifies 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 seven-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 two 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.

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.

PAX009030 (4/20)

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.

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