Pax World Value Fund
Investment Objective
The Pax World Value Fund’s investment objective is to seek long-term capital appreciation. The Value Fund’s portfolio manager seeks to generate capital appreciation with moderate risk. The fund focuses on high quality businesses that are fundamentally attractive with good earnings in good industries.
Principal Investment Strategies
Under normal market conditions, the Value Fund invests primarily in equity securities (such as common stocks, preferred stocks and securities convertible into common or preferred stocks) of companies that have capitalization of at least equal to the capitalization of the smallest company included in the Russell 3000 Value Index and that the Value Fund’s investment adviser believes are undervalued relative to their future growth prospects in relation to the market and their respective industry groups.
The Value Fund’s investment adviser selects equity securities on a company-by-company basis primarily through the use of fundamental analysis. Undervalued companies tend to have lower stock prices relative to their earnings potential and other financial measures. The investment adviser attempts to identify companies for possible investment by analyzing their 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 Value Fund may sell a particular security if any of the original reasons for purchase change materially, in response to adverse market conditions, when a more attractive investment is identified, to meet redemption requests, or if a company no longer meets Pax World’s environmental, social or governance standards.
The Value Fund may invest up to 45% of its assets in securities of non-U.S. issuers, including American Depository Receipts (“ADRs”). The Value Fund may invest no more than 25% of its assets in securities of non-U.S. issuers other than ADRs. The Value Fund’s investments in securities of non-U.S. issuers, if any, may include investments in emerging markets and may be diversified across multiple countries or geographic regions, or may be focused in a single country or geographic region.
Management Style
The Fund’s portfolio manager selects equity securities on a company-by-company basis primarily through the use of fundamental analysis. Undervalued companies tend to have lower stock prices relative to their earnings potential and other financial measures. The portfolio manager seeks to identify companies for possible investment by analyzing their 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 ratio1, price-to-book ratio2 and/or price-to-cash flow ratio3,
- a healthy balanced sheet
- overall financial strength, and
- catalysts for changes that improve future earnings prospects.
1The Value Fund’s investment adviser has contractually agreed to reimburse expenses (excluding Acquired Fund Fees and Expenses) allocable to Individual Investor Class, Institutional Class and R Class shares of the Value Fund to the extent such expenses exceed 1.24%, 0.99% and 1.49% of the average daily net assets of Individual Investor Class, Institutional Class and R Class shares, respectively, of the Value Fund. This reimbursement arrangement will remain in effect for a minimum of three years, through December 31, 2011.