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April 02, 2008
Three New SRI Funds from Pax World
    by Anne Moore Odell

Sustainable investing pioneer Pax World adds Global Green, International, and Small Cap Funds to its SRI family of funds.

Pax World's family of funds has grown to eight with the recent launch of three new mutual funds: Pax World Global Green Fund, Pax World Small Cap Fund, and Pax World International Fund. Portsmouth NH-based Pax World will apply the same rigorous environmental, social, and governance (ESG) screens to the new funds that all its funds enjoy.

"I am sure most investors and financial advisors would consider the Small Cap Fund and the International Fund to represent core asset classes in today's investment environment," said Joe Keefe, president and CEO of Pax World. "But we believe that's true to some degree about the Global Green Fund, as well. I think sustainable investors want to invest in environmental leaders and environmental markets, and environmentally focused businesses and technologies will become more and more attractive investments in the years ahead."

The Pax World Global Green Fund will include any company the fund's manager considers to be an "environmental leader." Impax Asset Management, headquartered in London, is the sub-advisor on the fund, lead by Impax CEO Ian Simm.

"When we decided to launch a global environmental fund we did a lot of due diligence and met with several potential portfolio managers," said Keefe. "We are thrilled to be launching the fund with Impax as its sub-adviser. Impax Asset Management is among the most experienced and highly regarded asset management firms with a specialty focus on environmental markets. They have significant sector experience and a strong track record."

Pax World hopes that the Global Green Fund enables investors to benefit from potentially rapid and sustained capital growth in environmental markets. Its holdings will focus in three areas: alternative energy and energy efficiency; water treatment and pollution control; and waste technology and resource management.

"The fund allows investors to gain exposure to leaders in environmental technology and solutions - including alternative energy - without the volatility sometimes associated with more narrowly focused, alternative energy funds," Keefe told

Investors interested in long-term growth can tap into the new Pax World International Fund, which will buy stocks in non-US companies. Ivka Kalus-Bystricky, the fund's manager, has been given a lot of leeway to scour the globe to find international companies that pass Pax's ESG screens and that could lead to long-term growth.

"We think it's important to have a broad market international fund that can go anywhere in search of companies of any size in growing sectors, regions and economies around the world," Keefe said. "Investors looking for international exposure in their portfolios do not necessarily want to be limited by capitalization constraints, or growth vs. value considerations, or other style box issues. They simply want to diversity and take advantage of the fact that other economies and regions sometimes have better growth opportunities than the US market."

Keefe continued, "So, in launching an international fund, we decided on a strategy that hope will have broad investor appeal. In particular, there are companies around the world that are doing interesting things from a sustainability or ESG perspective, and we want to offer more of these types of investments to our shareholders."

"With the falling dollar and slowed growth in the US market, we expect that investors will continue to search for diversification globally," said Keefe.

The Pax Small Cap Fund is a domestic fund focused on small-capitalization companies but by prospectus it may invest up to 45% of its assets in foreign securities and American Depositary Receipts (ADRs). Nathan Moser, who previously was a portfolio manager at Citizens Funds, manages the Small Cap Fund.

Moser looks for small-cap companies with strong management that embrace innovation to include in the Fund. At least 80% of the Small Cap Fund's net assets will be in equity securities of companies with market capitalization in the range of $262 million to $2.5 billion.

Keefe told that Pax World started each of the three new funds with start-up seed investments in the $1 million to $1.5 million range.

"I think we are witnessing the mainstreaming of sustainable investing," Keefe reported. "As more investors see the benefit of integrating ESG factors into financial analysis and decision-making, there will be - and already is - rising demand for sustainability or ESG-focused investment strategies. At Pax World, we are busy rolling out new product because we see increased demand. We want to provide investors with more opportunities to integrate sustainability concerns into their investment portfolios, and we hope these three new funds will help us do that."


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