Please support our sponsors

Subscribe to Free weekly SRI News Alerts

Keyword Search
Find SRI News Articles Related To:

Complete List of Articles by Category

What is RSS?
Add to MyYahoo

Please support our sponsors

Recent News Headlines from

Principles for Climate Change Developed for Financial Sector (12/04/08)

Consumers Remain Loyal to Brands that Champion Social Purpose (12/03/08)

Report Finds that Information Technology and Communications Sector can Help Reduce Climate Change (12/02/08)

Sustainability Investment News Order reprints | Send it to a friend | Print it | Save it  

October 04, 2007

New Pax World Value Fund Follows "Contrarian Value" Strategy
    by Anne Moore Odell

Pax World's new Fund travels the globe looking for sustainable, yet undervalued companies. -- When Pax World launched the very first socially responsible mutual fund in 1971, they had no way to forecast how large their family tree of socially responsible funds would grow. Recently, the Portsmouth, NH-based Pax World added a new Fund to the family: the Pax World Value Fund (ticker: PAXVX).

SRI Mutual Funds GuidePax currently offers a Balanced Fund, a Growth Fund and a High Yield Bond Fund. The newly launched Value Fund rounds out its offerings by exploring new US and global companies. Shareholders in any of Pax World's Funds can take part in its Global Citizen Program that allows shareholders to contribute part of their dividends to Mercy Corps, a humanitarian relief organization not affiliated with Pax World Funds.

Newly hired Pax team member Sujatha R. Avutu will guide the portfolio. Avutu was hired in July as a senior vice president and senior portfolio manager at Pax World.

As a value fund, Pax Value Fund will include large-cap companies that are considered undervalued in terms of future growth potential and compared to their peer industry companies. Importantly, these companies must also pass Pax's sustainability standards. Pax examines companies past environmental, social and governance (ESG) performances carefully before including them in their portfolios.

"Pax World Value Fund fills in an important style niche for investors," said Avutu. "As a value-oriented manager, we believe - and we think the evidence shows - that a strong sensitivity to valuation and price will benefit an investment portfolio over the long run. That's true of value funds in general."

"We envision the Value Fund as a core foundation with lower volatility and higher dividends than its peer group under normal conditions. We believe it is properly viewed as an anchor holding in a diversified portfolio, so to that extent, it may well be an appropriate holding for many investors," Avutu continued.

The Fund is built on a "contrarian value" approach. Avutu describes this method as one that buys "great businesses at good prices and good businesses at great prices." Pax World Value Fund is dominantly a domestic value fund that may invest up to 45% in international stocks, including foreign companies that are traded on US stock exchanges, also known as American Depositary Receipts (ADRs).

This approach is especially effective on a global scale, Avutu believes, with consideration of the growth in infrastructure industries in developing countries

"Given that we are truly in a global environment and a global economy, we see less and less rationale for making distinctions based on where a company is domiciled," Avutu said. "Investors should know that we are not afraid to go where the investment opportunities are --whether that's here in the US, or in international markets where GDP growth has been much more attractive of late. The long and short of it is, we look for attractive investment opportunities wherever they may appear."

Pax's ESG criteria are grouped into five categories: environmental impact, community impact, workplace practices, product safety and integrity, and corporate governance. In each category Pax looks for companies' programs and policies governing performance to identify well-managed companies that present fewer risks

Avutu explained, "ESG catastrophes take many forms: an oil company has a major spill; a transportation company becomes a defendant in a massive EEO discrimination class-action lawsuit; a company must restate its financials due to extensive stock-option backdating. Any of these, as well as any of hundreds more, can have a lasting impact on the company's reputation and financial performance."

Pax's ESG investment philosophy states that companies that recognize the importance of managing ESG variables are likely to be well managed in many ways, and that these companies offer the best options for durable additions to shareholder value.

The environmental footprint of any company depends on its sector, Avutu pointed out. The energy business, for the most part, typically involves far more environmental impact than, as an example Avutu supplied, high tech. Pax's mangers have consistently found that there is a substantial difference between the ESG policies and performance of leading companies and that of laggards, within industries and sectors.

"We believe that by investing in leaders and using shareholder advocacy to improve their practices, we can advance sustainability and raise the standard of practice for all companies," Avutu said. "We have often observed that once one or more companies adopt new sustainability metrics or policies, others follow, often quickly.

The minimum individual investment in the Fund is $250. Institutional investors can invest in the Institutional World Value Fund (ticker: PXVIX) with a minimum investment of $500,000.

© SRI World Group, Inc. All Rights Reserved.

Order reprints | Send it to a friend | Print it | Save it

Related Articles


Mutual Funds | Community Investing | News | Sustainability Reports | Corporate Research | Shareowner Actions | Financial Services | Conferences
Home | Login | Contact | Support This Site | Terms of Use | Privacy Statement | Reprints

© 1998-2008 SRI World Group, Inc. All Rights Reserved.

Created and maintained by
SRI World Group web development services
Do your own research Work with an advisor SRI News SRI Learning Center Home