Mutual Fund Profile: Pax Global Green Fund
By Scott Secrest
This article first appeared in the July 2009 edition of the Natural Investing newsletter
As part of our emphasis on investment in renewable energy businesses and other climate change solution-oriented companies, sometimes generically referred to as “cleantech” companies, we have added the Pax Global Green Fund to our line-up.
This is an exciting new option, as it is a security that really gets to the heart of our common desire to take action in fighting global warming and its dire consequences. Environmentalists are sometimes criticized as doomsayers in regard to the global warming problem, putting forward only negative prognostications. Taking action by supporting companies that are providing real-world solutions to address the problem is a positive and hopeful—and rational—response to the risk. There is no silver bullet to solve the complex and entrenched problem of global warming. Rather there are a thousand small solutions that together can solve the problem, or at least manage it as effectively as possible.
The Pax Global Green Fund follows a sustainable investing approach, combining rigorous financial analysis with equally rigorous environmental, social, and governance (ESG) analysis in order to identify promising investments. The fund invests in companies whose businesses and technologies focus on mitigating the environmental impacts of commerce, including alternative energy and energy efficiency, water treatment, pollution control, waste technology, and resource management.
Market conditions over the past year and more have mostly been quite poor prior to the recent up-tick, and the experience in the cleantech sector was no exception. Though returns in this fund have been in the red over most of that period, losses have been far more contained in this fund than in most similar funds. A good investment manager will be able to minimize losses in poor markets, and maximize gains in strong markets. Pax has managed to meet the former goal, and we are optimistic about their ability to meet the later.
The fund’s investments are managed by Impax Asset Management, a London- based money manager specializing in environmental investment strategies. The fund is co-managed by Bruce Jenkyn-Jones and Ian Simm, assisted by ten analysts.
“When we decided to launch a global environmental fund we did a lot of due diligence and met with several potential portfolio managers,” said Pax World President, Joe 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.”
The managers invest the fund’s capital in companies around the world, with at least 40% in non-U.S. businesses. By attempting to identify promising companies through analyzing valuations and growth prospects based on their competitive and financial position as well as their political and regulatory environment, the fund has managed to amass a competitive performance record.
Natural Investments is pleased to be incorporating this innovative fund into our line-up. If you want to know more, speak with your advisor about whether this fund is appropriate for your investment goals.
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