Pax Global Environmental Markets Fund Company Examples
The Pax Global Environmental Markets Fund (PGRNX) invests in companies around the world that are developing innovative solutions in the areas of energy (renewable energy and energy efficiency), water (water infrastructure and technologies, pollution control), waste (waste management and technologies, environmental support services) and sustainable food and agriculture. We believe the leading companies in these markets are fast becoming major drivers of global economic growth. The following are examples of these companies:
- Trimble Inc. (2.5%*)
- Zhuzhou CRRC Times Electric Co., Ltd. Class H (2.8%*)
- Aptiv PLC (2.7%*)
- Ferguson PLC (2.9%*)
Trimble is a market leading pioneer in GPS data collection and manipulation for sustainable agriculture, irrigation and engineering applications. A good example of innovative technology contributing to resource optimization in practice, Trimble’s products utilize integrated positioning, wireless and software technology to enable farmers to improve resource efficiency and maximize yield. The applicability for sustainable and efficient agriculture pertains to integration of key data such as location, weather, amount of water available to plants, soil characteristics, and crop yields, resulting in more efficient and optimal application of water, seeds, fertilizers, while also lowering costs. Data from hand held or vehicle mounted devices is transferred to server-based solutions to analyse efficiency and productivity. This technology also has utility applications in the water space. Trimble products are being introduced to new crops, including forestry, and are increasingly expanding outside the US.
Zhuzhou CRRC Times Electric Co., Ltd. Class H
Zhuzhou CRRC is a Chinese company that researches, manufactures and sells locomotive train power converters and control systems. It provides propulsion and control systems for high speed trains, electrical multiple units (rail cars or carriages that are self-powered with electric motors which thus do not need a locomotive), mass transit, electric locomotives and diesel locomotives. It also develops and makes other electric components for the urban and non-urban railway industry. Its main products include electric multiple units, metropolitan rail transportation equipment, locomotives and marine engineering products. Zhuzhou’s services are distributed domestically in China and to other select overseas markets, with the latter currently a focus for Zhuzhou. It is the market leader in high speed rail in China, and benefits from strong support from its parent, CRRC (China Rail Road Company). Zhuzhou likewise benefits from the upward trend in rail-related infrastructure investment in China, an important and energy- and carbon-efficient way of transportation for the large Chinese population and increasing urbanization trend.
Aptiv is a global technology company that develops safer, greener and more connected solutions that enable the future of mobility. Aptiv is the former Delphi Automotive post the spinoff of the powertrain segment and has operations in 45 countries. Enhanced vehicle capabilities mean radar, lidar, high-speed sensors, vision, engine controls, networking systems – software complexity and computing power, all in real time. Vehicles are on their way to becoming a software-defined platform, akin to mobile supercomputers. Aptiv provides the advanced smart vehicle architecture and the connected mobility ecosystem at the forefront of smarter, automated and autonomous driving, safety, and infotainment. The company recently launched a fleet of autonomous vehicles in Las Vegas on the Lyft network. Passengers hail self-driving vehicles equipped with Aptiv technology in high demand locations. Aptiv has strong competitive advantages in the three key areas of autonomous driving, electric vehicles and infotainment systems, with the content and value per vehicle on a steadily rising trajectory. Guided by a strong management team, with strong free cash flow, the company should benefit from mergers and acquisitions (M&A) and further increases in return on invested capital, which is already quite impressive. Emerging markets present an additional opportunity for growth and Aptiv’s end market is well diversified within the global auto sector.
Ferguson is a UK listed company and a leading specialist distributor of water infrastructure and water network solutions as well as energy efficient heating products. The company is a well-managed business with strong market share and attractive exposure to global economic growth. Many of Ferguson’s brand names hold leading positions in their local markets. The majority of revenues come from the United States, with a strong business in the UK as well. Revenue and margin growth have been expanding, and Ferguson’s e-commerce business has also helped contribute. End market exposure is diversified by product: plumbing and heating and building material for residential, non-residential, new construction, and infrastructure. Ferguson should benefit from product demand, from both a natural replacement cycle, as well as newly built real estate, where both end markets seek more efficient water heaters and boilers. With growing need for the latest technologies helping to transition to lower carbon emitting products and higher water efficiency heaters and boilers, Ferguson’s national U.S. reach provides medium to long term growth opportunities. Sustainable construction and building development will increasingly play an important role in supporting long-term environmental sustainability given population growth, ageing housing stock, and increased level of comfort in homes.
* Pax Global Environmental Markets Fund holdings as of 9/30/18.
Holdings are subject to change.
This information is not a recommendation to buy or sell any security.