Performance and Portfolio Update

  • The Pax Global Environmental Markets Fund modestly underperformed the MSCI ACWI in the fourth quarter. However, due to a strong first half of the year, the Fund outperformed the MSCI ACWI for calendar year 2019.
  • During a strong quarter for global markets, the Fund’s underperformance was largely stock specific. The biggest laggard was Zhuzhou CRRC Times Electric Company (Transport Energy Efficiency, China), a leading manufacturer of rail electronic control equipment, which was initially held back by a sustained delay in new rolling stock bidding activity, and later in the quarter also suffered from limited visibility on new rolling stock procurement and maintenance orders. The investment team remains positive about the outlook for Chinese rail investment in the coming years. East Japan Railway Company (Public Transportation, Japan) experienced underperformance as the more defensive-oriented rail business lagged in a rally benefiting cyclical areas of the market.
  • Holdings within cyclical areas of the market, notably the Industrials, Information Technology and Materials sectors, contributed the most to performance during the quarter. Fund holdings in these sectors that performed well are active in environmental solutions such as the digitization of factories, smart management of buildings, equipment for energy-efficient and waste-minimizing food preparation, computer-aided engineering for more sustainable design, sustainable consumer packaging, and the decarbonization of transportation. Regionally, the Fund’s European exposure outperformed, led by UK companies which gained ground after the election result.
  • Companies announcing results ahead of market expectations or receiving analyst upgrades drove performance. Siemens (Industrial Energy Efficiency, Germany) delivered better than expected results, particularly in its industrial software division, albeit with a cautious outlook for 2020. Schneider Electric (Power Network Efficiency, France) continued its strong run of performance and received a credit rating upgrade leading to more favorable analyst ratings.
  • Some alleviation of uncertainties regarding global economic growth, international and regional politics, and the direction of interest rates, enabled equity markets to close 2019 on a high. While valuations for defensive and cyclical sectors in the broader market seem relatively well balanced, a key component for 2020 will be the actual earnings companies can deliver, and whether stock valuations correspond with these forthcoming announcements as the year progresses. The importance of stock selection, and conviction in the profitability and resilience of individual business models, will be crucial.
  • The investment case for Environmental Markets remains strong: a growing focus on energy efficiency and electrification across nations striving toward net zero carbon emissions; the urgent adaptation necessary for regions with too little or too much water; a noticeable increase in severe weather events which are extremely costly to governments, humanity, and the planet’s ecosystems; and the need to use natural resources more sustainably with less waste.
  • The investment team continues to examine stock valuations with discipline and is seeking opportunities in areas including bio-based ingredients, sustainable forestry, value-added waste companies, efficiency-enhancing software, and green data centers.


(as of 12/31/19)
Returns (%)Average Annual Returns (%)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
Global Environmental Markets Fund - Investor Class3.668.7327.7527.7511.438.578.696.19
Global Environmental Markets Fund - Class A˜3.718.8027.7727.7711.438.578.696.20
Global Environmental Markets Fund - Institutional Class3.758.8628.1728.1711.728.858.986.46
MSCI ACWI (Net) Index3.528.9526.6026.6012.448.418.795.99
FTSE Environmental Opportunities Index Series3.7510.0031.5331.5314.6310.5310.01-

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

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

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

Total annual Global Environmental Markets Fund operating expenses, gross of any fee waivers or reimbursements, for Institutional Class, Investor Class and Class A shares are 0.99%, 1.24%, and 1.24%, respectively, as of 5/1/2019 prospectus. Total annual Global Environmental Markets Fund operating expenses, net of any fee waivers, reimbursements and acquired fund fees and expenses, for Institutional Class, Investor Class, and Class A shares were 0.99%, 1.24% and 1.24%, respectively.

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 9.04% (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%.


(as of 12/31/19)
Returns (%)Average Annual Returns (%)
1-MonthQuarterYTD1 Year3 Year5 Year10 YearSince Inception1
Global Environmental Markets Fund - Class A (Load)-2.012.8320.7520.759.377.368.085.69

Performance Attribution

Global Industry Classification Standard Sectors

(for quarter ended 12/31/19)
Average Active Weights (%)
Total Relative Contribution (%)

The Global Industry Classification Standard (GICS) is a standardized classification system for equities developed jointly by Morgan Stanley Capital International (MSCI) and Standard & Poor’s. The GICS methodology is used by the MSCI indexes, which include domestic and international stocks, as well as by a large portion of the professional investment management community.
Past performance is no guarantee of future results.

Performance Attribution

Environmental Markets Classification
Systemx Sectors

(for quarter ended 12/31/19)
Average Active Weights (%)
Total Relative Contribution (%)

XThe Environmental Markets Classification System (EMCS) is a comprehensive global classification system for environmental markets. Environmental market companies are defined as providing products and services that deliver solutions to environmental challenges, and include environmental technology. Relative results of the Fund compared to the FTSE Environmental Opportunities All Shares Index. Source: FTSE.
Past performance is no guarantee of future results.

Portfolio Characteristics

(as of 12/31/19)
Market Cap (weighted avg.)$28,637M$189,203M
Forward Price/Earnings19.6417.52
Number of Securities513,047

Top 10 Holdings

(as of 12/31/19)
Linde PLC 3.6%, Waste Management, Inc. 3.5%, Schneider Electric SE 3.4%, Suez 3.2%, Agilent Technologies, Inc. 3.0%, Ingersoll-Rand PLC 3.0%, East Japan Railway Co. 2.9%, Siemens AG 2.9%, TE Connectivity, Ltd. 2.9% and Aptiv PLC 2.8%. 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 two years of performance history under the same mandate. Five 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.

PAX009028 (4/20)

Hubert Aarts

Co-Head of Listed Equities, Executive Director

Hubert is an Executive Director and Co-Head of Listed Equities, together with Bruce Jenkyn-Jones. He is also responsible as co-portfolio manager for Impax’s Leaders and Water strategies, as well as leading Impax’s macro-economic research process.

Hubert joined Impax in 2007 from Cambrian Capital Partners LLP, where he was a partner and portfolio manager of the Curalium fund and Incremental Leveraged hedge funds.

Having started his career in the investment industry in 1990, Hubert has extensive experience investing in Pan-European equities as a portfolio manager at MeesPierson and Merrill Lynch Investment Managers/BlackRock, where he chaired the European Sector Strategy Group.

He holds a Master’s degree in Economics and Business Administration from Maastricht University.

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David Winborne

Senior Portfolio Manager, Director

David joined Impax in September 2015 as a senior portfolio manager on the listed equity team, and his responsibilities include co-management of the Leaders and Global Opportunities strategies.

He arrived from the in-house asset management team at Tesco Pension Investment, where he had joint responsibility for the successful development, launch and management of a new global equities investment platform.

Prior to this, David was a fund manager at Sarasin & Partners, where he was responsible for the firm’s Asia Pacific Equity fund and for contributing investment recommendations to Sarasin’s flagship thematic Global Equity fund.

After graduating from the University of Bath, David began his career at Insight Investment on the Global Equities graduate scheme in 2003 as a global equity analyst.

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Sid Jha

Portfolio Manager, Associate Director

Sid is co-manager of the Leaders strategy and a member of the Portfolio Construction team for the Water and Global Opportunities strategies. He has research responsibilities in the Energy Efficiency and Water environmental sub-sectors and also researches stocks with a focus on US-Healthcare.

Sid joined Impax in 2014 after graduating from business school and interning with Impax’s Listed Equity team over the summer and autumn of 2012. In his pre-MBA career, Sid worked as a clean technology consultant in India.

Sid has an MBA with a focus in Finance from London Business School and a Bachelor of Arts in History and Political Science from Macalester College, where he graduated cum laude.

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