Morningstar Magazine profiles the Pax Ellevate Global Women’s Leadership Fund and the team behind it.
This article was originally published in Morningstar Magazine on October 11, 2018.
Opinions, forecasts, and discussions about investment strategies represent the author's views as of the date of this commentary and are subject to change without notice. References to specific securities, asset classes, and financial markets are for illustrative purposes only and are not intended to be and should not be interpreted as recommendations.
Effective February 26, 2018, the name of the Pax Ellevate Global Women's Index Fund changed to the Pax Ellevate Global Women's Leadership Fund.
As of 9/30/18, the Morningstar Ratings™ for the Pax Ellevate Global Women's Leadership Fund Investor Class (PXWEX) were 4 stars out of 739 funds overall, 4 stars out of 739 funds for 3-years, 4 stars out of 611 funds for 5-years. Pax Ellevate Global Women's Leadership Fund Institutional Class (PXWIX) Morningstar Ratings were 4 stars out of 739 funds overall, 4 stars out of 739 funds for 3-years, 4 stars out of 611 funds for 5-years. The Morningstar Rating for funds, or ‘star rating’, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five- and ten- year (if applicable) Morningstar Rating metrics. The weights are 100% three-year rating for 36-59 months of total returns, 60% five-year rating, 40% three-year rating for 60-119 months of total returns, and 50% ten-year rating, 30% five-year rating, 20% three-year rating for 120 or more months of total returns. While the ten-year overall rating formula seems to give the most weight to the ten-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
The Morningstar Category Rankings are based on the World Large Stock Category. As of 9/30/18, the Pax Ellevate Global Women's Leadership Fund Investor Class (PXWEX) ranked 184 out of 895 with a 19% ranking for the 1-year period; 203 out of 739 funds with a ranking of 31% for the 3-year period; and 136 out of 611 funds with a ranking of 25% for the 5-year period. As of 9/30/18, the Pax Ellevate Global Women's Leadership Fund Institutional Class (PXWIX) ranked 163 out of 895 with a 17% ranking for the 1-year period; 167 out of 739 funds with a ranking of 24% for the 3-year period; and 113 out of 611 funds with a ranking of 20% for the 5-year period. Morningstar Sustainability Rating™ measures how well the companies in a fund's portfolio manage their environmental, social and governance (ESG) risks and opportunities relative to the fund's peers. First, a Morningstar Portfolio Sustainability Score™ ranging from 0 to 100 is derived from an asset weighted average of the underlying company ESG scores quarterly. Next, scored funds are rated monthly: The top 10% receive 5 globes (High), the next 22.5% receive 4 (Above Average), the next 35% receive 3 (Average), the next 22.5% receive 2 (Below Average), and the bottom 10% receive 1 (Low). Sustainalytics provides company-level analysis used in the calculation of Morningstar's Sustainability Score. A higher score indicates that a fund, on average, has more of its assets invested in companies that score well according to the Sustainalytics methodology. For details, visit http://morningstar.com/company/sustainability. Sustainability Score for the Pax Ellevate Global Women's Leadership Fund as of 6/30/2018 is 52. Percent Rank in Category is 6 and Sustainability Rating is 5 globes out of 307 World Large Stock funds as of 8/31/2018 based on 99% of AUM. Sustainalytics provides company-level analysis used in the calculation of Morningstar's Sustainability Score.
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On 6/4/2014, the Pax Global Women’s Equality Fund merged into the Pax Ellevate Global Women’s Leadership Fund (the Fund), pursuant to an Agreement and Plan of Reorganization dated March 4, 2014 (the “Reorganization”). Because the Fund had no investment operations prior to the closing of the Reorganization, Pax Global Women’s Equality Fund (the “Predecessor Fund”) is treated as the survivor of the Reorganization for accounting and performance reporting purposes. Accordingly, all performance and other information shown for the Fund for periods prior to 6/4/2014 is that of the Predecessor Fund. The Predecessor Fund acquired the Women’s Equity Fund on October 29, 2007. Performance information shown for periods prior to the acquisition represents the performance of the acquired Women’s Equity Fund.
Since Reorganization (51 months) as of 9/30/18, the Pax Ellevate Global Women's Leadership Fund Investor Class (PXWEX) had a Sharpe Ratio of 0.84, a Downside Capture of 87.03%, and an Upside Capture of 91.91%. For the same time period, the Pax Ellevate Global Women's Leadership Fund Institutional Class (PXWIX) had a Sharpe Ratio of 0.87, a Downside Capture of 86.40%, and an Upside Capture of 93.36%.
The annualized returns for the Pax Ellevate Global Women’s Leadership Fund – Individual Investor class as of 9/30/18 were, 1 year: 12.27%, 3 year: 13.67%, 5 year: 9.79%, 10 year: 6.96%. The annualized returns for the Pax Ellevate Global Women’s Leadership Fund – Institutional class as of 9/30/18 were, 1 year: 12.60%, 3 year: 13.96%, 5: year 10.07%, 10 year: 7.23%. The returns for the MSCI World Index as of 9/30/18 were, 1 year: 11.24%, 3 year: 13.54%, 5 year: 9.28%, 10 year: 8.56%. The returns for the Pax Global Women’s Leadership Index as of 9/30/18 were, 1 year: 11.43% and 3 year: 13.93%.
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, visit www.paxworld.com.
Total annual Pax Ellevate Global Women's Leadership Fund operating expenses are 0.80% for the Investor Class, 0.55% for the Institutional Class as of the 05/01/2018 prospectus. The management fee is a unified fee that includes all of the 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 1940 Act and extraordinary expenses), including accounting expenses, administrator, transfer agent and custodian fees, Fund legal fees and other expenses.
Top Ten holdings as of 9/30/18: Microsoft Corp. 4.0%, Intuit, Inc. 2.1%, Michael Kors Holdings, Ltd. 2.0%, Wolters Kluwer NV 2.0%, Target Corp. 2.0%, Estee Lauder Cos, Inc., The, Class A 2.0%, Swedbank AB, Class A 2.0%, Canadian Utilities, Ltd., Class A 2.0%, Ulta Beauty, Inc. 2.0%, Cisco Systems, Inc. 2.0%. Holdings are subject to change.
The Pax Ellevate Global Women’s Leadership Fund seeks investment returns that closely correspond to or exceed the price and yield performance, before fees and expenses, of the Pax Global Women’s Leadership Index* (the “Women’s Index”), while maintaining risk characteristics that Pax Ellevate Management LLC (“PEM”) believes are generally similar to those of the Women’s Index. *A custom index based on MSCI World.
DefinitionsReturn on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its management team) is managing the equity that shareholders have contributed to the company. 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. Sharpe ratio determines a risk-adjusted return using standard deviation; a high Sharpe ratio indicates greater return per unit of risk and demonstrates if performance was based on smart investments or on excess risk. Standard deviation measures a Fund's variation around its mean performance; a high standard deviation implies greater volatility. Downside capture measures an investment manager's overall performance in down-markets and is used to evaluate how well or poorly an investment manager performed relative to an index during periods when that index has dropped. A downside capture ratio less than 100 indicates that the investment manager has outperformed its index during down-markets, while downside capture ratio greater than 100 indicates that the investment manager has underperformed its index during down-markets.
Index Definitions The MSCI World (Net) Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The MSCI World (Net) Index consists of the following 23 developed market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States. Performance for the MSCI World (Net) Index is shown “net,” which includes dividend reinvestments after deduction of foreign withholding tax.
The Pax Global Women’s Leadership Index is a customized index of the highest-rated companies in the world in advancing women’s leadership, as rated by Pax World Gender Analytics, and that meet key environmental, social and governance (ESG) standards, as rated by MSCI ESG Research. Companies are rated by Pax World Gender Analytics based on multiple criteria of gender leadership, including: representation by women on the board of directors and in executive management, woman CFOs, woman CEOs and whether they are signatories to the Women's Empowerment Principles. Inception date of The Index is 02/28/14. A custom index calculated by MSCI. One cannot invest directly in an index.
RISKS: Equity investments are subject to market fluctuations, the fund's share price can fall because of weakness in the broad market, a particular industry, or specific holdings. The Fund does not take defensive positions in declining markets. The Fund’s performance would likely be adversely affected by a decline in the Index. Investments in emerging markets and non-U.S. securities are generally less liquid and less efficient than investments in developed markets and are subject to additional risks, such as risks of adverse governmental regulation, intervention and political developments. There is no guarantee that the objective will be met and diversification does not eliminate risk.
An investment in the Pax World Funds involves risk, including loss of principal. You should consider a fund’s investment objectives, risks, and charges and expenses carefully before investing. For this and other important information, please obtain a fund prospectus by calling 800.767.1729 or visiting www.paxworld.com. Please read it carefully before investing.
Copyright © 2018 Impax Asset Management LLC, formerly Pax World Management LLC. All rights reserved. Pax World Funds are distributed by ALPS Distributors, Inc. ALPS Distributors is not affiliated with Impax Asset Management LLC or Morningstar Magazine.