Performance and Portfolio Update
- The Pax Large Cap Fund outperformed the S&P 500 Index† during the first quarter, with strong stock selection driving outperformance.
- The first quarter was a very choppy period for the market. Large-cap companies as a whole disclosed strong fourth quarter earnings reports and outlooks at the start of the quarter; however, these positive developments were overshadowed in March by fears surrounding trade wars and privacy breaches. Given the market backdrop, we were pleased that the Fund delivered positive performance for shareholders, in a quarter where the S&P 500 Index produced negative returns.
- Consumer Staples and Financials drove the outperformance in the Fund this quarter. Notable holdings included Estee Lauder (up 18%) in Consumer Staples and CME Group (up 11%) in Financials. Within Consumer Discretionary, Amazon (up 24%) was the top performer for the Fund during the quarter.
- Industrials and Materials detracted the most from performance during the quarter, as cyclical holdings Stanley Black & Decker (down 9%) and DowDupont (down 15%) reacted negatively to the tariff-related headlines. Within Health Care, Biogen (down 14%) was the largest detractor during the period, as the company reported a process change in a closely-watched Alzheimer’s drug trial.
- Market valuations have backed off high levels during the first quarter, leaving the risk/reward for large-cap stocks more constructive looking forward. We remain focused on bottom-up stock selection, while avoiding large sector over- and under-weights. We believe our ESG integration approach will serve as a “flywheel” to better performance over time as more investors recognize opportunities and risks that stem from long-term sustainability trends.
Performance(as of 3/31/18)
|1-Month||Quarter||YTD||1 Year||3 Year||5 Year||10 Year||Since Inception1|
|Large Cap Fund - Individual Investor Class||-2.57||0.38||0.38||15.51||-||-||-||15.35|
|Large Cap Fund - Institutional Class||-2.57||0.38||0.38||15.81||-||-||-||15.59|
|S&P 500 Index||-2.54||-0.76||-0.76||13.99||-||-||-||15.25|
|Lipper Large-Cap Core Funds Index||-2.64||-1.2||-1.2||12.94||-||-||-||14.16|
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 paxworld.wpengine.com
Figures include reinvested dividends, capital gains distributions, and changes in principal value.
1The inception date for the Pax Large Cap Fund Institutional Class and the Individual Investor Class is December 16, 2016.
As of 5/1/17 prospectus, total annual Pax Large Cap Fund operating expenses, gross of any fee waivers or reimbursements (excluding Acquired Fund fees and expenses), for Individual Investor Class and Institutional Class shares are 0.96% and 0.71%, respectively.
(as of 3/31/18)
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 3/31/18)
|Market Cap (weighted avg.)∱||$219,219M||$199,034M|
|Number of Securities||45||505|
Top Ten Holdings
(as of 3/31/18)
Microsoft Corp. 4.9%, Amazon.com, Inc. 4.6%, Apple, Inc. 3.5%, Zoetis, Inc. 3.3%, Home Depot, Inc., The 3.3%, Bank of America Corp. 3.0%, PepsiCo, Inc. 2.8%, Prudential Financial, Inc. 2.7%, Alphabet, Inc., Class C 2.6% and Alphabet, Inc., Class A 2.6%. Holdings are subject to change.
†The S&P 500 Stock Index is an unmanaged index of large capitalization common stocks. One cannot invest directly in any index.
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.
∞An Ex-Ante Beta is used for Funds with less than 2 years of performance history under its new mandate. The Ex-Ante Beta is calculated using a multi-factor risk model. Beta explains common variations in stock returns due to different stock sensitivities to the market relative to its underlying benchmark for the current period, not historical. 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.