Performance and Portfolio Update

  • The Pax Core Bond Fund slightly underperformed Bloomberg Barclays U.S. Aggregate Bond Index in the third quarter.
  • The Fund’s corporate bond and asset-backed securities detracted from performance during the quarter. The bond market in general, and treasuries in particular, had a strong quarter as slowing global growth reduced inflation fears. Many of the Fund’s corporate bonds and asset backed securities have lower duration which caused them to lag in the rally.
  • The main drivers of positive relative performance were the Fund’s treasury and agency mortgage backed security positions. Many of the Fund’s treasury securities have a long duration and benefited from a declining yield environment. In addition, the Fund’s underweight to agency mortgage backed securities helped relative performance as lower rates drove an uptick in mortgage prepayments.
  • Overall, we feel the Fund should be positioned to perform well in a late credit cycle environment. The portfolio remains less sensitive to credit spreads, which traditionally widen as the economy slows down. However, we have added marginally to our more credit-sensitive sectors. While we maintain the view that the risks to the credit markets outweigh the steady economy, we do recognize the Federal Reserve’s efforts to become more accommodative. As such, we have become a little less bearish.
  • The Fund continues to add impact holdings to the portfolio. At the end of September 2019, approximately 27% of the Fund’s assets were in securities classified as impact, which is a growing allocation in the portfolio.


(as of 9/30/19)
Returns (%)Average Annual Returns (%)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
Core Bond Fund - Investor Class-0.572.177.909.58---3.94
Core Bond Fund - Institutional Class-0.552.138.099.84---4.20
Bloomberg Barclays US Aggregate Index-0.532.278.5210.30---4.69
Lipper Core Bond Funds Index-0.522.218.9610.16---4.76

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.

1The inception date for the Pax Core Bond Fund Institutional Class and Investor Class is December 16, 2016.

As of 5/1/19 prospectus, total annual Core Bond Fund operating expenses, gross of any fee waivers or reimbursements (excluding Acquired Fund fees and expenses), for Investor Class and Institutional Class shares are 0.71% and 0.46%, respectively.

Performance Attribution

(as of 9/30/19)
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 9/30/19)
Effective Duration5.68%5.72%
Years to Maturity13.3813.03
30 Day SEC Yield


Top 10 Holdings

(as of 9/30/19)
United States Treasury Note, 3.375%, 11/15/48 4.6%, United States Treasury Note, 2.625%, 2/28/23 4.3%, United States Treasury Note, 2.750%, 9/30/20 2.4%, United States Treasury Note, 2.125%, 11/30/23 2.2%, United States Treasury Note, 0.375%, 7/15/27 1.5%, United States Treasury Note, 4.500%, 2/15/36 1.4%, United States Treasury Note, 4.375%, 11/15/39 1.2%, United States Treasury Note, 3.500%, 2/15/39 1.1%, United States Treasury Note, 2.250%, 3/31/26 1.0% and United States Treasury Note, 2.375%, 3/15/21 1.0%. Holdings are subject to change.


ƒEffective Duration is a measure of a security’s price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities of shorter durations.
~Years to Maturity (weighted average) is the number of years until the bond matures and/or expires.
°30-Day SEC Yield: An annualized yield based on the most recent 30-day period.

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.

PAX008820 (1/20)

Anthony Trzcinka, CFA®

SVP, Portfolio Manager, Pax Core Bond Fund, Pax Sustainable Allocation Fund, Impax Asset Management LLC
Senior Vice President, Pax World Funds

Anthony Trzcinka is SVP and Portfolio Manager of the Pax Core Bond Fund at Impax Asset Management LLC and a Senior Vice President at Pax World Funds. Tony is also a member of the portfolio management team of the Pax Sustainable Allocation Fund.

Tony has been responsible for multiple strategies during his tenure at Impax Asset Management LLC, formerly Pax World Management LLC. He joined the firm in 2003 from AEW Capital Management where he spent over three years as an Assistant Vice President working in a Senior Analyst role. He began his financial services career as an analyst in 1999.

He holds a Master of Business Administration degree from Northeastern University and a Bachelor of Arts degree from the University of Massachusetts. Tony is a CFA® charterholder and member of the Boston Security Analysts Society.

CFA® is a trademark owned by the CFA Institute.

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