Pax World Growth Fund
Investment Objective
The Pax World Growth Fund’s investment objective is to seek long-term growth of capital.
Principal Investment Strategies
Under normal market conditions, the Growth Fund invests primarily in equity securities (such as common stocks, preferred stocks and securities convertible into common or preferred stocks) of companies that the Grwoth Fund’s investment adviser believes have above-average growth prospects. The Growth Fund’s investment adviser selects equity securities on a company-by-company basis primarily through the use of fundamental analysis. The investment adviser attempts to identify companies that have demonstrated growth in earnings and sales, high returns on equity and assets or other strong financial characteristics, and that are, in the judgment of the investment adviser, attractively valued. These companies tend to have a unique market niche, a strong new product profile or superior management. The investment adviser also attempts to identify companies that are undergoing changes in management or that have product and marketing dynamics that have not yet been reflected in reported earnings but that the investment adviser believes will affect earnings in the short term (3 months to 1 year). The Growth Fund may invest in securities of companies with any market capitalization.
The Growth Fund generally sells a security when an event, such as a disappointing earnings report or adverse changes in a company’s management or industry position, is perceived by the portfolio manager to lessen its attractiveness. The Growth Fund may also sell a security in response to adverse market conditions, to rebalance the Growth Fund’s portfolio, when a more attractive investment is identified or to meet redemption requests, or if a company no longer meets Pax World’s environmental, social or governance standards.
The Growth Fund may invest up to 45% of its assets in securities of non-U.S. issuers, including American Depositary Receipts (”ADRs”), but may invest no more than 25% of its assets in securities of non-U.S. issuers other than ADRs.
Management Style
The Fund’s portfolio manager believes that attractive growth stocks are found across a range of market capitalizations, from up-and-coming smaller companies in growth industries, to accelerating mid-size high achievers, to acknowledged large-company industry leaders. The Fund’s holdings are focused within economic sectors that seem likely to grow faster than the overall rate of GDP growth. As a key element of the stock selection process, the manager looks for companies with accelerating sales and earnings growth rates. The manager seeks to purchase stocks at prices that represent reasonable value when compared to industry peers. Cash is used as a buffering element and to provide a resource for opportunistic stock purchases.
1The Growth Fund’s investment adviser has contractually agreed to reimburse expenses (excluding Acquired Fund Fees and Expenses) allocable to Individual Investor Class, Institutional Class and R Class shares of the Growth Fund to the extent such expenses exceed 1.45%, 1.20% and 1.70%, respectively, of the average daily net assets of Individual Investor Class, Institutional Class and R Class shares of the Growth Fund, respectively. This reimbursement arrangement will remain in effect until at least December 31, 2011.