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
"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."
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
"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 Socialfunds.com.
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 SocialFunds.com
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."