Performance

  • In the fourth quarter, the Pax US Sustainable Economy Fund outperformed the Russell 1000 Index.

Investment Strategy

  • The strategy integrates the Impax Sustainability Lens, a proprietary tool that helps the adviser systematically overweight the portfolio toward sub-industries we identify as high opportunity in the context of the transition to a more sustainable economy, while removing exposure to sub-industries classified as low opportunity and high risk. The Fund is also constructed to provide higher exposure to companies with favorable environmental, social and governance (ESG) ratings relative to their sector and industry peers, as determined by the Impax Systematic ESG Rating. Lastly, the strategy is fossil fuel free, utilizing SmartCarbonTM, a proprietary tool that replaces energy sector holdings with energy efficiency stocks. The Fund’s optimization process applies appropriate constraints to create a diversified portfolio of approximately 200 stocks.

Overview

  • US Large Cap equity markets, as measured by the Russell 1000 Index, gained 9.78% during the final quarter of the year. Gains were steady throughout the period despite volatile fiscal and monetary policy environments and the global arrival of the Omicron variant. The Fund’s higher quality and lower volatility profile continued to have a positive impact during this period, however it was also a big quarter for market momentum1, which is not a style factor targeted by the Fund.

Impax Sustainability Lens

  • During the fourth quarter, overall Lens positioning contributed to the Fund’s outperformance with the notable exception of the Low Opportunity sub-industries. Underperformance within the Low Opportunity sub-industries was primarily driven by the Fund not owning Tesla, a company that the Lens considers low-opportunity and high-risk. Stock selection within higher-risk sub-industries was the greatest contributor to relative performance and was led by strong stock specific results from companies with higher ESG ratings. The Fund benefited from not owning companies with lower ESG ratings, like Meta in Interactive Media & Services as well as Moderna in Biotechnology. Additionally, stock selection within the Low-Risk Lens category helped identify strong companies within Health Care Technologies, Education Services and Data Processing.

Impax Systematic ESG Rating

  • Allocation to companies with high ESG scores that fell in the in the top quartiles, as determined by the Impax Systematic ESG Rating, was the largest contributor to the Fund’s relative performance. The Rating was particularly additive in selecting highly rated ESG companies within the High Opportunity and High/Neutral Risk segments, including many of the Fund’s top performing holdings, like NVIDIA, Zoetis, Lam and Home Depot. The Fund’s underweight, relative to its benchmark, to companies in the bottom two quartiles, also helped performance. Additionally, companies with highly-rated ESG profiles within the IT and Industrials sectors boosted performance.

SmartCarbonTM Attribution

  • During the quarter, the Fund’s SmartCarbon approach detracted from performance. While not owning traditional Energy companies and the allocation to energy efficient companies had a supportive impact on performance, stock selection among the energy efficiency companies was a detractor and offset the positive contributions.

Performance

(as of 12/31/21)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception2
Pax US Sustainable Economy Fund - Investor Class5.1911.3130.0230.0223.2516.8714.507.07
Pax US Sustainable Economy Fund - Class A5.1811.3229.9929.9923.2216.8714.507.07
Pax US Sustainable Economy Fund - Institutional Class5.1811.3730.3530.3523.5317.1614.787.22
Russell 1000 Index4.059.7826.4526.4526.2118.4316.54-
Lipper Multi-Cap Core Funds Index4.168.4323.2823.2824.5516.5314.95-

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.

As of 5/1/2021 prospectus, total annual Pax US Sustainable Economy Fund operating expenses, gross of any fee waivers or reimbursements (excluding Acquired Fund fees and expenses), for Institutional Class, Investor Class and Class A shares are 0.65%, 0.90% and 0.90%, respectively.ˆ

Performance
after sales charge

(as of 12/31/21)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception2
Pax US Sustainable Economy Fund - Class A (Load)-0.615.2122.8422.8420.9315.5613.856.83

2The inception date for the Pax US 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 10.28% (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 14.42% (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%.

Portfolio Characteristics

(as of 12/31/21)
FundBenchmark
Market Cap (weighted avg.)$536,391M$606,782M
Forward Price/Earnings21.0122.31
ROE25.7518.91
Beta
0.931.00
Number of Securities2011,030

1Market momentum refers to the capacity for a broad market price trend to sustain itself into the future.

Top 10 Holdings

(as of 12/31/21)
Apple, Inc. 6.2%, Microsoft Corp. 5.4%, NVIDIA Corp. 3.5, Alphabet, Inc., Class A 3.4%, Thermo Fisher Scientific, Inc. 2.2%, Home Depot, Inc., The 2.0%, Johnson & Johnson 1.9%, Zoetis, Inc. 1.9%, Lam Research Corp. 1.7% and Waste Management, Inc. 1.7%. Holdings are subject to change.

Disclosures

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.

IMPX0914 (4/22)

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

Christine Cappabianca

Portfolio Manager

Christine Cappabianca is Vice President, Portfolio Manager at Impax Asset Management LLC, the North American division of Impax Asset Management Group and investment adviser to Pax World Funds.

She is a Portfolio Manager of the firm’s systematic strategies, including the Pax Ellevate Global Women’s Leadership Fund, the Pax Global Sustainable Infrastructure Fund, the Pax US Sustainable Economy Fund and the Pax International Sustainable Economy Fund.

Before joining Impax in 2021, Christine spent 14 years with Mellon, where she held several positions, most recently as senior quantitative research analyst and portfolio manager for the firm’s Internet of Things, Blockchain Innovation, US Manufacturing and Smart Cures Innovation thematic strategies. She also served as the ESG data expert on Mellon’s ESG Council.

Christine earned a Bachelor of Arts in economics at Harvard University and a Master of Science in investment management at Boston University. She holds the SASB FSA Credential.

Recent Insights

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