Barron’s – Barron’s includes the Pax Large Cap Fund (PAXLX ) (#17) and the Pax US Sustainable Economy Fund (PXGAX) (#24) to its list of the top-performing sustainable fund rankings based on one-year performance.
The annualized returns for the Pax Large Cap Fund – Investor class (PAXLX) as of 12/31/2021 were, 1 year: 30.57%, 3 year: 29.61%, 5 year: 20.06% and Since Inception (12/16/2016): 19.70%.
The annualized returns for Pax US Sustainable Economy Fund – Class A (PXGAX) as of 12/31/2021 were, 1 year: 29.99%, 3 year: 23.22%, 5 year: 16.87% and Since Inception (6/11/1997): 7.07%.
Top 10 holdings for Pax Large Cap Fund – Investor class (PAXLX) as of 12/131/2021: Microsoft Corp., 6.7%, Apple, Inc. 4.4%, Alphabet, Inc. Class A, 3.6%, Procter & Gamble Co. 2.8%, Amazon.com, Inc. 2.6%, Alphabet, Inc. Class C, 2.5%, Lowe’s Cos, Inc. 2.5%, Citizens Financial Group, Inc. 2.4%, Applied Materials, Inc. 2.4%, CVS Health Corp. 2.3%.
Top 10 holdings for Pax US Sustainable Economy Fund – Class A (PXGAX) as of 12/31/2021: Apple, Inc. 6.2%, Microsoft Corp. 5.4%, NVIDIA Corp. 3.5%, Alphabet, Inc. Class A, 3.4%, Thermo Fischer Scientific, Inc. 2.2%, Home Depot, Inc. 2.0%, Johnson & Johnson, Inc. 1.9%, Zoetis, Inc. 1.9%, Lam Research Corp. 1.7%, Waste Management, Inc. 1.7%.
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, visit www.impaxam.com.
Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.
Investments involve risk, including potential loss of principal.
You should always consider Pax World Funds’ investment objectives, risks, and charges and expenses carefully before investing. For this and other important information, please download a fund prospectus. Please read it carefully before investing.
References to other funds should not be interpreted as an offer of these securities.
The statements and opinions expressed are those of the author as of the date of this article. 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.
Pax World Funds are distributed by Foreside Financial Services, LLC.
Pax Large Cap Fund: Equity investments are subject to market fluctuations, the fund’s share price can fall because of weakness in the broad market, a particular industry, or specific holdings. The Fund is actively managed.
Pax US Sustainable Economy Fund: Equity investments are subject to market fluctuations, the fund’s share price can fall because of weakness in the broad market, a particular industry, or specific holdings. The Fund is actively managed.
Management Risk: The investment techniques and decisions of the investment adviser and the Fund’s portfolio manager(s), including the investment adviser’s assessment of a company’s ESG (Environmental, Social and Governance) profile when selecting investments for the Fund, may not produce the desired results and may adversely impact the Fund’s performance, including relative to other Funds that do not consider ESG factors or come to different conclusions regarding such factors.
Total annual Pax Large Cap Fund operating expenses for Investor Class (PAXLX) are 0.95% as of the 5/1/2021 prospectus.
Total annual Pax US Sustainable Economy Fund operating expenses, gross of any fee waivers or reimbursements, for Class A (PXGAX) are 0.90% as of the 5/1/2021 prospectus; total expenses net of fee waivers or reimbursements are 0.70%. The Pax US Sustainable Economy Fund’s investment adviser has contractually agreed to waive a portion of its management fee. This fee waiver may not be amended or terminated without the approval of the Fund’s Board of Trustees before April 30, 2024. The management fee is a unified fee that includes all of the operating costs and expenses of the Fund (other than taxes, charges of governmental agencies, interest, brokerage commissions incurred in connection with portfolio transactions, distribution and/or service fees payable under a plan pursuant to Rule 12b-1 under the Investment Company Act of 1940, acquired fund fees and expenses and extraordinary expenses), including accounting expenses, administrator, transfer agent and custodian fees, Fund legal fees and other expenses.
The Morningstar Sustainability Rating™ is intended to measure how well the issuing companies of the securities within a fund’s portfolio holdings are managing their financially material environmental, social and governance, or ESG, risks relative to the fund’s Morningstar Global Category peers. The Morningstar Sustainability Rating calculation is a five -step process. First, each fund with at least 67% of assets covered by a company-level ESG Risk Score from Sustainalytics receives a Morningstar Portfolio Sustainability Score. The Morningstar Portfolio Sustainability Score is an asset-weighted average of company-level ESG Risk Scores. The Portfolio Sustainability Score ranges between 0 to 100, with a higher score indicating that a fund has, on average, more of its assets invested in companies with high ESG Risk. Second, the Historical Sustainability Score is an exponential weighted moving average of the Portfolio Sustainability Scores over the past 12 months. The process rescales the current Portfolio Sustainability Score to reflect the consistency of the scores. The Historical Sustainability Score ranges between 0 to 100, with a higher score indicating that a fund has, on average, more of its assets invested in companies with high ESG Risk, on a consistent historical basis. Third, the Morningstar Sustainability Rating is then assigned to all scored funds within Morningstar Global Categories in which at least thirty (30) funds receive a Historical Sustainability Score and is determined by each fund’s Morningstar Sustainability Rating Score rank within the following distribution: High (highest 10%), Above Average (next 22.5%), Average (next 35%), Below Average (next 22.5%), and Low (lowest 10%). Fourth, then Morningstar applies a 1% rating buffer from the previous month to increase rating stability. This means a fund must move 1% beyond the rating breakpoint to change ratings. Fifth, they adjust downward positive Sustainability Ratings to funds with high ESG Risk scores. The logic is as follows: If Portfolio Sustainability score is above 40, then the fund receives a Low Sustainability Rating. If Portfolio Sustainability score is above 35 and preliminary rating is Average or better, then the fund is downgraded to Below Average. If the Portfolio Sustainability score is above 30 and preliminary rating is Above Average, then the fund is downgraded to Average. If the Portfolio Sustainability score is below 30, then no adjustment is made. The Morningstar Sustainability Rating is depicted by globe icons where High equals 5 globes and Low equals 1 globe. Since a Sustainability Rating is assigned to all funds that meet the above criteria, the rating it is not limited to funds with explicit sustainable or responsible investment mandates. Morningstar updates its Sustainability Ratings monthly. The Portfolio Sustainability Score is calculated when Morningstar receives a new portfolio. Then, the Historical Sustainability Score and the Sustainability Rating is calculated one month and six business days after the reported as-of date of the most recent portfolio. As part of the evaluation process, Morningstar uses Sustainalytics’ ESG scores from the same month as the portfolio as-of date. Please visit http://corporate1.morningstar.com/SustainableInvesting/ for more detailed information about the Morningstar Sustainability Rating methodology and calculation frequency. Sustainalytics is an independent ESG and corporate governance research, ratings, and analysis firm. Morningstar, Inc. holds a non-controlling ownership interest in Sustainalytics.
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To construct the list of top sustainable funds, Barron’s “looked at all of the actively managed large-company stock funds—both mutual and exchange traded—that earned a ‘high’ or ‘above average’ sustainability rating from Morningstar.” Barron’s included all funds with an explicit mandate to invest according to any sustainable or ESG principles—even though some of them had lower sustainability ratings than Morningstar. Then Barron’s ranked the funds according to their 2021 performance. (Source: Barron’s)