Pax U.S. Sustainable Economy Fund Commentary Q1 2021

Performance and Portfolio Update

• Effective March 31, 2021, the Pax ESG Beta Quality Fund was renamed the Pax U.S. Sustainable Economy Fund to better reflect the Fund’s core focus of investing in the transition to a more sustainable economy. The Fund’s strategy was also enhanced with the integration of the Impax Sustainability Lens into portfolio construction. The Lens, which is already used in several of our actively managed funds, is a tool that facilitates a systematic review of the economic opportunities and risks associated with the transition to a more sustainable economy. The Fund continues to integrate the Impax Sustainability Score into its systematic process and the portfolio continues to be comprised of quality companies in U.S. markets. Learn more by reading our press release.
• The Fund outperformed the benchmark Russell 1000 Index in the first quarter. The following performance commentary is representative of the ESG Beta Quality investment strategy in place during the period. The main drivers of outperformance were factors used in the strategy construction as well as an overweight to stocks that rank in the top two quartiles of the Impax Sustainability Score.
• The Fund’s overweight to earnings yield and profitability factors were the largest contributors to relative returns for the period. Earnings yield, a value factor, performed strongly as value stocks considerably outperformed growth stocks. The Fund’s exposure to companies with lower volatility offset a portion of the outperformance as riskier stocks performed well in the rising market.
• Weighting the portfolio toward companies with stronger ESG characteristics will continue to be an important component of the Fund’s investment strategy. During the quarter, companies with stronger ESG profiles, as measured by the Impax Sustainability Score, outperformed companies with weaker ESG profiles, making a strong contribution to Fund performance.
• Industry exposures, which are driven by the factor and ESG tilts, detracted from relative returns for the quarter. Particularly, no weight in the Energy sector hurt performance as Energy continued its rebound and was the best performing sector in the quarter.

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. To obtain performance for the most recent month-end, call 800.767.1729 or visit impaxam.com

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

¹The inception date for the Pax U.S. Sustainable Economy Fund Institutional Class is April 2, 2007, the Investor Class inception date is June 11, 1997, and the Class A shares inception date is May 1, 2013.

The performance information shown for Institutional Class shares represents the performance of the Investor Class shares for the period prior to Institutional Class inception (April 2, 2007). Expenses have not been adjusted to reflect the expenses allocable to Institutional Class shares. If such expenses were reflected, the returns would be higher than those shown. Institutional Class shares average annual return since April 2, 2007, is 9.34% (annualized).

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 13.13% (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%.

Top 10 Holdings

(as of 3/31/21)
Apple, Inc. 5.1%, Microsoft Corp. 4.5%, Alphabet, Inc., Class A 3.1%, NVIDIA Corp. 2.4%, Johnson & Johnson 2.2%, Verizon Communications, Inc. 2.1%, Thermo Fisher Scientific, Inc. 1.9%, Home Depot, Inc., The 1.7%, Lam Research Corp. 1.7% and Zoetis, Inc. 1.7%. Holdings are subject to change.

Definitions

^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 3 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.

IMPX0343 (7/21)