Pax World Launches ESG Beta Quality Fund
PORTSMOUTH, N.H. June 30, 2016 - Pax World Management LLC, investment adviser to Pax World Funds and a pioneer in the field of sustainable investing, today announced the launch of the Pax ESG Beta Quality Fund (PXWGX), sub-advised by Aperio Group, LLC (Aperio), a leading provider of customized factor investing strategies. The Pax ESG Beta Quality Fund follows a factor investing strategy, also commonly known as smart beta, which combines sustainability, quality and value factors in a U.S. large cap core portfolio.
The Pax Sustainability Score, a proprietary ranking of companies’ environmental, social and governance (ESG) performance, including carbon intensity and gender diversity ratings, is a key component of the portfolio construction process. The Fund is optimized to overweight stocks with stronger sustainability scores, higher profitability, higher earnings quality, lower risk and lower valuations.
“Substantial research suggests that certain factors, including quality, value and ESG fundamentals, can have a positive impact on long-term portfolio performance,”1 said Pax World President and CEO Joe Keefe. “We’re excited to offer investors an innovative way to capture these important drivers of risk and return.”
The Fund is a successor to the Pax Growth Fund, whose shareholders approved the naming of Aperio as subadviser on the new strategy following a proxy and shareholder meeting that was held on June 15, 2016.
“This is a new direction for Pax World in large-cap equities,” said Pax World CIO Steve Falci. “We believe the combination of Aperio’s robust quantitative capabilities and Pax’s ESG expertise will serve investors well.”
The Fund offers Institutional Class shares at a total expense ratio of 0.65% and Individual Class shares at a total expense ratio of 0.90%.2
Learn more about the Pax ESG Beta Quality Fund.
Pax World Management LLC
Pax World Management LLC, investment adviser to Pax World Funds, is a pioneer in the field of sustainable investing. Pax World integrates environmental, social and governance (ESG) research into its investment process to better manage risk and deliver competitive long-term investment performance. For over 45 years, Pax World has made it possible for investors to align their investments with their values and have a positive social and environmental impact. Today, its platform of sustainable investing solutions includes a family of mutual funds, as well as separately managed accounts.
Aperio Group, LLC
Aperio Group LLC, subadviser to the Pax ESG Beta Quality Fund, design and manage customized portfolios that deliver pre-tax performance of indexing with client-specific customizations including active tax management and active risk reduction. Their three primary strategies for domestic, foreign and/or global equity portfolios are Active Tax Indexing, Socially Responsive Indexing and Factor Tilts. Aperio, located in Sausalito, CA, was founded in 1999 and manages separately managed accounts primarily for ultra-High Net Worth and institutional investors.
1 Select studies for each factor component – ESG: Mozzaffar Khan, George Serafeim, Aaron Yoon, “Corporate Sustainability: First Evidence of Materiality,” Harvard Business School Working Paper 15-073, 2015. Quality: Robert Novy-Marx, “The other side of value: The gross profitability premium,” Journal of Financial Economics, Volume 108, Issue 1, April 2013, Pages 1–28. Value: Eugene F. Fama and Kenneth R. French, “A Five Factor Asset Pricing Model,” Journal of Financial Economics, Volume 116, Issue 1, April 2015, Pages 1–22.
2 The management fee is a unified fee that includes all of the operating costs and expenses of the Fund (other than taxes, charges of governmental agencies, interest, brokerage commissions incurred in connection with portfolio transactions, distribution and/or service fees payable under a plan pursuant to Rule 12b-1 under the Investment Company Act of 1940 and extraordinary expenses), including accounting expenses, administrator, transfer agent and custodian fees, Fund legal fees and other expenses.
The Pax ESG Beta Quality Fund’s investment objective is to seek long-term growth of capital.
Factor investing, also known as smart beta, is strategy wherein a portfolio of securities is over weighted, or tilted, toward certain factors – rather than market capitalization – in an effort to mitigate risk and/or deliver above market returns.
Information containing any historical information, data or analysis should not be taken as an indication or guarantee of any future performance, analysis, forecast or prediction. Past performance does not guarantee future results.
Effective June 30, 2016 the Pax Growth Fund (the “Predecessor Fund”) was renamed the Pax ESG Beta Quality Fund (the Fund). The Predecessor Fund is treated as the survivor of the renaming for accounting and performance reporting purposes. Accordingly, all performance and other information shown for the Fund for periods prior to 6/30/2016 is that of the Predecessor Fund.
Pax World Funds distributed by ALPS Distributors, Inc. ALPS Distributors is not affiliated with Aperio Group, LLC.