Pax World Small Cap Fund
Investment Objective
The Pax World Small Cap Fund’s investment objective is to seek long-term growth of capital.
Principal Investment Strategies
Under normal market conditions, the Small Cap Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities (such as common stocks, preferred stocks, and securities convertible into common or preferred stocks) of companies that, when purchased, have capitalizations within the range of the Russell 2000 Index as measured by market capitalization. (As of the latest reconstitution of the Russell 2000 Index, this meant a range of $262 million to $2.5 billion.)
The Small Cap Fund selects equity securities on a company-by-company basis primarily through the use of fundamental analysis. The adviser attempts to identify companies for possible investment by analyzing their valuations and growth prospects based on their market and competitive position, financial condition and economic, political and regulatory environment. The following characteristics may also be considered in analyzing the attractiveness of such companies: valuation factors such as price-to-earnings ratio; price-to-book ratio and/or price-to-cash flow ratio; a healthy balance sheet; overall financial strength; and catalysts for changes that improve future earnings prospects.
The adviser also looks for strong management teams that exhibit a high degree of innovation and motivation to grow their business. The adviser may overweight or underweight a specific sector and take concentrated positions which could lead to increased volatility. The Small Cap Fund is not constrained by any particular investment style, and may therefore invest in “growth” stocks, “value” stocks, or a combination of both. Additionally, it may buy stocks in any sector or industry.
The Small Cap Fund may invest up to 45% of its assets in securities of non-U.S. issuers, including American Depositary Receipts (“ADRs”). The Small Cap Fund may invest no more than 25% of its assets in securities of non-U.S. issuers other than ADRs. The Small Cap Fund’s investments in securities of non-U.S. issuers, if any, may be diversified across multiple countries or geographic regions, or may be focused in a single country or geographic region.
Top Ten Holdings as of 4/30/08 (% of Net Assets)
- Sybase, Inc. (2.7)
- CommScope, Inc. (2.6)
- optionsXpress Holdings, Inc. (2.5)
- Vail Resorts, Inc. (2.4)
- Pool Corp. (2.3)
- Factset Research Systems, Inc. (2.3)
- TheStreet.com, Inc. (2.3)
- Hercules Technology Growth Capital, Inc. (2.2)
- Techne Corp. (2.1)
- Acuity Brands, Inc. (2.0)