Performance and Portfolio Update


  • The Pax Small Cap Fund underperformed the Russell 2000 Index during the first quarter. Fund performance was negatively impacted by sector allocation and stock selection.

Market Review

  • While the overall economy continues to grow, there are signs of softness beneath the headline numbers. Inflation, which has increased to levels not seen since the early 1980’s, is crimping consumer spending. In addition, the recent rise in interest rates and removal of accommodation from the Federal Reserve will further suppress economic growth. Against this backdrop, small cap stocks, as measured by the Russell 2000 Index, declined -7.53% in the first quarter. The Fund’s institutional class lagged the benchmark, returning -11.48% as the market rotation from growth stocks to value stocks and a lack of exposure to energy holdings detracted from performance.


  • The largest detractor to relative performance was the Energy sector due to the Fund’s avoidance of the sector given its fossil fuel free portfolio. Despite the benchmark holding a modest weight in Energy, it was responsible for more than half of the Fund’s underperformance during the period as commodity prices surged higher.
  • Industrials, where we had a modest underweight allocation, was also a negative contributor to performance. Azek Inc., the maker of environmentally friendly building products, declined more than -46% on margin concerns as well as exposure to a slowing US housing market. We continue to hold shares in the company, as the long-term fundamental outlook remains intact.


  • From an attribution perspective, Healthcare and Consumer Staples were the Fund’s best performing sectors. Within those sectors, strong stock selection was the primary contributor to relative performance. Vocera Communications, a healthcare technology holding, was the Fund’s largest positive contributor in the period. The maker of communication equipment for healthcare workers announced its acquisition by Stryker during the period and shares advanced on the news.


  • As the year has progressed, the economic outlook is a bit clearer in that growth is poised to slow. What remains unclear, is to what extent growth slows and if market multiples will decline given the relative unattractiveness of other asset classes. We continue to position the portfolio with a quality bias and one that leans toward growth. While this positioning wasn’t rewarded during the first quarter, we remain optimistic that as the year progresses, investors will rotate back to companies with more resilient earnings prospects during a more difficult macroeconomic backdrop.


(as of 3/31/22)
Returns (%)Average Annual Returns (%)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
Small Cap Fund – Investor Class-0.12-11.54-11.541.2912.097.6610.049.02
Small Cap Fund – Class A-0.12-11.58-11.581.3012.117.6610.039.01
Small Cap Fund – Institutional Class-0.06-11.48-11.481.5812.387.9310.329.30
Russell 2000 Index1.24-7.53-7.53-5.7911.749.7411.049.60
Lipper Small-Cap Core Funds Index0.08-5.54-5.541.9012.9710.1711.069.73

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 call 800.767.1729 or for more information visit

Figures include reinvested dividends, capital gains distributions and changes in principal value.

As of 5/1/21 prospectus, total annual Small Cap Fund operating expenses, gross of any fee waivers or reimbursements, for Investor Class, Class A, and Institutional Class shares are 1.19%, 1.19% and 0.94%, respectively.

after sales charge

(as of 3/31/22)
Returns (%)Average Annual Returns (%)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
Small Cap Fund - Class A (Load)-5.61-16.41-16.41-4.2610.036.459.418.58

1The inception date for the Pax Small Cap Fund Institutional Class and Investor Class is March 27, 2008. The inception date for the Class A shares is May 1, 2013.

The performance information shown for Class A represents the performance of the Investor Class shares for the period prior to Class A inception. Expenses have not been adjusted to reflect the expenses allocable to Class A shares. Class A inception date return since May 1, 2013, is 9.57% (annualized). A 1.00% CDSC (contingent deferred sales charge) may be charged on any shares sold within 18 months of purchase over $1 million. POP (public offering price) reflects the maximum sales load for the Fund’s Class A Shares of 5.50%.

Performance Attribution

(as of 3/31/22)
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 3/31/22)
Market Cap (weighted avg.)$3,960M$3,354M
Forward Price/Earnings16.9714.01
Number of Securities602,018

Top Ten Holdings

(as of 3/31/22)
Victory Capital Holdings, Inc., Class A 3.9%, Rayonier, Inc. 3.2%, Independent Bank Corp. 3.1%, Pacira Biosciences, Inc. 3.0%, HomeTrust Bancshares, Inc. 3.0%, BrightSphere Investment Group, Inc. 2.8%, Ligand Pharmaceuticals, Inc. 2.6%, Graphic Packaging Holding Company 2.3%, Voya Financial, Inc. 2.3% and Onto Innovation, Inc. 2.1%. 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 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. Ten-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.

IMPX1054 (7/22)

Nathan Moser, CFA®

Senior Portfolio Manager

Nathan Moser is a 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 Senior Portfolio Manager of the US Small Cap Strategy, including the Pax Small Cap Fund. Nathan has been a member of the Pax Sustainable Allocation Fund portfolio management team since 2015.

Nathan has managed the Pax Small Cap Fund since its inception in 2008, which is the year he joined the firm. Prior to that, he worked at Citizens Funds, first as an Equity Analyst then as a Portfolio Manager. Nathan started his career with John Hancock Funds, where he was an Equity Analyst.

Nathan holds a Bachelor of Science from Babson College. He is a CFA® charterholder and a member of the CFA Society Boston.

Recent Insights

Diederik Basch, CFA®

Portfolio Manager

Diederik is a co-Portfolio Manager for the US Small Cap Strategy, which includes the Pax Small Cap Fund. Diederik started his investment analysis career in 2006 and has worked in the US, Europe and Asia.

Before joining Impax in 2016, Diederik served as Senior Equity Analyst at RobecoSAM AG, a subsidiary of Robeco Group, in Zurich, Switzerland, where he conducted fundamental research, including integration of ESG factors, on the global consumer staples and discretionary sectors. He was a key supporting analyst for the firm’s thematic Sustainable Healthy Living and Sustainable Agribusiness funds. Diederik also completed an assignment in Robeco’s Hong Kong office, working with its Asian Equities team. Prior to RobecoSAM, he was a Senior Associate Analyst at Canaccord Genuity, with a focus on small- and mid-cap companies.

Diederik is a CFA® charterholder and member of the Boston Security Analysts Society. He holds a Bachelor of Arts with a concentration in economics from Brandeis University. Diederik received his MBA from the Kelley School of Business at Indiana University, where he was also a faculty-selected member of the Investment Management Academy.

Recent Insights

Curtis Kim, CFA®

Portfolio Manager

Curtis is a co-Portfolio Manager for the US Small Cap Strategy, which includes the Pax Small Cap Fund.

Prior to joining the firm in 2018, Curtis served as a Generalist Analyst at SGF Capital, a long-short hedge fund focused on small cap equities. He also worked as a Quantitative Associate at Clearbridge Investments, a Legg Mason subsidiary. Curtis joined the investment industry in 2005 at FactSet Research Systems in the role of Product Specialist.

Curtis earned a Bachelor of Arts with a concentration in political science from Colgate University. He received an MBA from Cornell University and is a CFA® charterholder.

Recent Insights

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