Performance and Portfolio Update
- In the first quarter, the Institutional share class of the Fund outperformed the MSCI EAFE Index by 55bps.Î”
- During the quarter, market volatility rapidly increased and international developed markets, as represented by the MSCI EAFE Index, posted a -1.53% return, its worst quarterly result since the first quarter of 2016.†
- The Fund’s ESG profile added to relative performance versus the MSCI EAFE Index during the quarter. The Fund’s large overweight to the highest-rated ESG companies contributed to relative performance while the lowest-rated group detracted from relative results. Longer term since the Fund’s inception, an overweight to the highest-rated ESG companies has contributed to relative performance.△△
- From a sector perspective, eight out of 11 sectors produced positive relative results for the Fund. Stock selection in Consumer Staples, led by Personal Products companies, added the most to relative performance. Stock selection in Financials, driven by Capital Markets and Insurance companies, was another strong contributor to performance.
- Stock selection in the Industrials sector, driven by companies in the Professional Services and Electrical Equipment industries, detracted from relative performance. In addition, relative performance was hurt by no exposure to a top performing industry, Aerospace & Defense. The Fund avoids investing in companies that manufacture or sell weapons.
- On a regional basis, the European and Pacific regions added to relative performance in the first quarter versus the MSCI EAFE Index. Within Europe, companies with leading ESG profiles in the UK, Switzerland and Germany were additive to performance, and within the Pacific region, Japan and Hong Kong holdings produced positive relative results.
Performance(as of 3/31/18)
|1-Month||Quarter||YTD||1 Year||3 Year||5 Year||10 Year||Since Inception1|
|Pax MSCI EAFE ESG Leaders Index Fund - Individual Investor Class||-0.54||-1.07||-1.07||12.99||4.35||5.68||-||4.98|
|Pax MSCI EAFE ESG Leaders Index Fund - Institutional Class||-0.44||-0.98||-0.98||13.39||4.60||5.97||-||5.25|
|MSCI EAFE ESG Leaders (Net) Index||-1.78||-1.74||-1.74||12.99||5.19||6.53||-||5.70|
|MSCI EAFE (Net) Index||-1.80||-1.53||-1.53||14.80||5.55||6.50||-||5.13|
|Lipper International Large-Cap Core Funds Index||-0.84||-0.83||-0.83||15.39||5.63||6.49||-||4.95|
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. 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 MSCI EAFE ESG Leaders Index Fund Institutional Class is January 27, 2011 and the Individual Investor Class inception date is March 31, 2014.
As of 5/1/17 prospectus, total annual Pax MSCI EAFE ESG Leaders Index Fund operating expenses, gross of any fee waivers or reimbursements, for Individual Investor Class and Institutional Class shares are 0.80% and 0.55%, respectively.
ESG Ratings(as of 3/31/18)
Average Active Weights (%)
|3-month Relative Contribution (%)||Since Inception 1/27/11
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.)∱||$53,810M||$60,581M|
|Number of Securities||335||927|
Top Ten Holdings
(as of 3/31/18)
Novartis AG 2.2%, Roche Holding AG 2.0%, Total SA 1.8%, GlaxoSmithKline PLC 1.7%, Novo Nordisk A/S, Class B 1.6%, SAP SE 1.6%, Commonwealth Bank of Australia 1.6%, BASF SE 1.4%, Allianz SE 1.3% and Unilever PLC 1.3%. Holdings are subject to change.
Î”A basis point (bps) is a unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly used for calculating changes in interest rates, equity indexes and the yield of a fixed-income security.
†MSCI EAFE Index quarterly returns: Q1-18:-1.53%, Q4-17: 4.23%, Q3-17: 5.40%, Q2-17: 6.12%, Q1:17: 7.25%, Q4-16: -0.71%, Q3-16: 6.43%, Q2-16: -1.46% and Q1-16:-3.01%
△△MSCI ESG Research evaluates companies’ ESG characteristics and derives corresponding ESG scores and ratings. Companies are ranked by ESG score against their sector peers to determine their eligibility for the MSCI ESG indices. MSCI ESG Research identify es the highest-rated companies in each peer group to meet the float-adjusted market capitalization sector targets. The rating system is based on general and industry-specific ESG criteria, assigning ratings on a 7-point scale from AAA (highest) to CCC (lowest).
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 2 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.
On 3/31/2014 Pax International Fund and Pax MSCI EAFE ESG Index ETF merged into the Pax MSCI International ESG Index Fund (the Fund), a passively managed index fund which seeks investment returns that closely correspond to the price and yield performance, before fees and expenses, of the MSCI EAFE ESG Index. Based on the similarity of the Fund to Pax MSCI EAFE ESG Index ETF, Pax MSCI EAFE ESG Index ETF (the Predecessor Fund) is treated as the survivor of the mergers for accounting and performance reporting purposes. Accordingly, all performance and other information shown for the Fund for periods prior to 3/31/2014 is that of the Predecessor Fund.
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.