PAX Environment Innovations

AROUND THE WORLD, INNOVATIVE COMPANIES ARE WORKING TO SOLVE CRITICAL ENVIRONMENTAL CHALLENGES.
* Examples shown for illustration purposes only.
*
THE PAX WORLD GLOBAL ENVIRONMENTAL MARKETS FUND (PGRNX)
INVESTS IN THEM.
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You should consider a fund's investment objectives, risks and charges and expenses carefully before investing. For this and other important information, please obtain a fund
prospectus by calling 800.767.1729 or visiting www.paxworld.com. Please read it carefully before investing. Past performance is no guarantee of future results.
Equity investments are subject to market fluctuations. The Fund's share price can fall because of weakness in the broad market, a particular industry, or specific holdings.
Emerging market and international investments involve risk of capital loss from unfavorable fluctuations in currency values, differences in generally accepted accounting
principles, economic or political instability in other nations or increased volatility and lower trading volume.
The Pax World Global Environmental Markets Fund (PGRNX) invests in companies around
the world that are developing innovative solutions in such areas as energy efficiency, water
infrastructure and waste management technologies. We believe the leading companies in
these markets are fast becoming major drivers of global growth as businesses and economies
confront a series of challenges:
• Global population growth together with rising consumption and gross domestic
product (GDP) growth in emerging markets
• Increased global demand for energy, water, food and other scarce resources
• Long-term increases in the prices of commodities
• Climate change and the escalating incidence of extreme weather events worldwide
• The demand for energy efficiency and clean, cost-effective technologies to address
resource scarcity and related environmental challenges
• The necessary transition to lower carbon, more resource-efficient economic models
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* Based on Impax’s proprietary environmental markets database which tracks companies, sales, new market entrants and Mergers and Acquisitions (M&A), earnings and sectors based on Bloomberg data December 2011.
Impax Asset Management Ltd. is the subadviser to the Pax World Global Environmental Markets Fund.
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
World-class Major
16
14
12
10
8
6
4
2
0
8
7
6
5
4
3
2
1
0
Number of ore discoveries
1
Exploration expenditure $ billion, real
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2011
260
240
220
200
180
160
140
120
100
80
60
40
MGI Commodity Price Index (Years 1999-2001 = 100)
World War I
World War II
1970s Oil Shock
Postwar Depression Great Depression
As global resources become scarcer, the need
for efficiency solutions grows proportionately.
Environmental Markets are a large and important component of the global economy
• Approximately $1.3 trillion in annual revenues*
• Approximately 1,400 companies in the sector*
• New market entrants: 16 Initial Public Offerings (IPOs) and 37 Merger & Acquisition (M&A)
transactions In 2011*
• Most standard economic sectors represented with a bias towards Industrials, Utilities, Energy*
• Full range of early cyclical, late cyclical and defensive stocks represented*
Source: McKinsey & Company report, “Resource Revolution: Meeting the world’s energy, materials, food and
water needs,” November 2011, p5
Source: McKinsey & Company report, “Resource Revolution: Meeting the world’s energy, materials, food and
water needs”, November 2011, p48
1
BP Energy Outlook 2030, January 19, 2011.
2
U.S. Environmental Protection Agency presentation, page 4 - www.epa.gov/osw/rcc/web-academy/2011/pdfs/wijs1-11.pdf.
3
World Water Development Report 2, 2006. web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTWAT/0,,contentMDK:21633289~menuPK:4620510~pagePK:210058~piPK:210062~theSitePK:4602123,00.html.
4
Environmental Protection Agency (EPA) Clean Watershed Needs Survey report, June 2010 www.water-technology.net/news/news87474.html/
5
Veolia Environmental Services synthesis, From Waste to Resource: An Abstract of World Waste Survey 2009, page 11, paragraph 2. www.scrap-ex.com/pdfs/news/from_waste_to_resource_report_veolia.pdf
Resource scarcity, rising demand and the need for
efficiency solutions: the case for environmental investing
Energy
The rate of global demand is
growing at an accelerating pace.
Since 1900, while the world’s population has
quadrupled, primary energy consumption has
increased by a factor of more than five times that
amount
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. Low-cost fossil fuel supplies are dwindling,
and more costly new discoveries are falling short of
burgeoning worldwide demand, leading to continued
upward pricing pressures and volatility. At the same
time, concerns about rising greenhouse gas emissions
and energy security are escalating across the globe,
and industries, governments and societies are under
pressure to find alternative ways of accessing secure,
cleaner energy resources.
Water
It ’s scarce now, and it ’s
getting scarcer.
Water scarcity is set to become a critical global
resource problem in the next two decades, with 50%
of the world’s population predicted to be living in
areas of high water stress by 2030
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. To meet fresh
water demand, the World Bank estimates that $180
billion
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of water infrastructure investment will be
needed each year until 2030, while the EPA
estimates the United States alone needs to spend a
total of $298 billion to update its water
infrastructure to acceptable levels
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. We believe this
urgent need for vast amounts of capital investment
creates an array of opportunities for investors.
Waste
If global expansion has one sure
by-product, this seems to be it.
An estimated 10 million tons of waste is produced
every day on a worldwide basis
5
. The need to
manage increasing global waste volumes in a
sustainable way that is compatible with ongoing
economic expansion suggests a positive outlook for
the waste management and environmental support
services sectors.
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Environmental Markets include
a variety of subcategories
*
“IT’S A SIMPLE EQUATION. WITH EXPONENTIALLY INCREASED DEMAND BEING PLACED ON FINITE NATURAL RESOURCES,
THE ENVIRONMENTAL SECTOR’S GROWTH DRIVERS OFFER, IN MY VIEW, SIGNIFICANT UPSIDE POTENTIAL.”
Ian Simm, Co-Portfolio Manager, Pax World Global Environmental Markets Fund
Energy
Renewable & Alternative Energy
• Renewable energy developers and
Independent power producers
• Solar energy generation equipment
• Wind power generation equipment
• Biofuels
• Other renewable equipment
Energy Efficiency
• Power network efficiency
• Industrial energy efficiency
• Buildings energy efficiency
• Transport energy efficiency
• Energy storage
Water
Water Infrastructure & Technologies
• Water infrastructure
• Water treatment equipment
• Water utilities
Pollution Control
• Pollution control solutions
• Environmental testing and gas sensing
Waste
Waste Management & Technologies
• Waste technology equipment
• Recycling & value-added waste processing
• Hazardous waste management
• General waste management
Environmental Support Services
• Environmental consultancies
• Carbon & other environmental assets trading
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We believe an efficiency
revolution is already underway.
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While the investment community has long focused on supply expansion,
in our view efficiency solutions are becoming just as important, if not
more so, for a host of reasons:
• We can no longer take scarce natural resources for granted.
• Resource scarcity is exacerbated by changing demographics,
urbanization, rising consumption and climate change.
• Replenishing reserves of our resources is becoming
increasingly difficult and expensive.
• Efficiency gains offer compelling solutions to the high cost
and increasing scarcity of energy, water, food and materials.
The Pax World Global Environmental Markets Fund invests in a diverse
group of companies around the globe that are developing and
delivering efficiency solutions that address critical resource and
environmental challenges.
Diversified
Environmental
10
%
Water Infrastructure
25
%
Cash
2
%
Pollution Control
16
%
Waste
Management
10
%
Renewable &
Alternative Energy
4
%
Energy Efficiency
33
%
Global Environmental Markets Fund Portfolio Composition*
* As of 06/30/2012
The Global Environmental Markets Fund’s investment objective is to seek long-term growth of capital by investing
in innovative companies around the world whose businesses and technologies focus on environmental mar-
kets.
Investment Management
Impax Asset Management Ltd.,
sub-adviser to the Pax World
Global Environmental Markets
Fund, specializes in environmental markets investing.
With over a decade of experience and a seasoned team
of more than 20 investment professionals located
around the globe, Impax is uniquely positioned to invest
globally in the stocks of companies that are active in
“green markets,” particularly in the alternative energy,
energy efficiency, water treatment, pollution control,
waste technology and resource management sectors.
Ian Simm is the Co-Portfolio
Manager of the Pax World Global
Environmental Markets Fund. Mr.
Simm has been responsible for the
management of the Fund since its
inception in 2008. He is the Chief
Executive of Impax Asset Management, the subadviser
of the Pax World Global Environmental Markets Fund,
and has been with the company since 1996. He holds a
first class honors degree in physics from Cambridge
University and has a Masters of Public Administration
from Harvard’s Kennedy School of Government.
Bruce Jenkyn-Jones is the Co-
Portfolio Manager of the Pax World
Global Environmental Markets
Fund. Mr. Jenkyn-Jones has been
responsible for the management of
the Fund since its inception in 2008
and has been a portfolio manager with Impax Asset
Management, the subadviser of the Pax World Global
Environmental Markets Fund, since 1999. Mr. Jenkyn-
Jones holds a Masters of Business Administration from
IESE (Barcelona), a Masters of Science in Environmental
Technology from Imperial College and a degree in
chemistry from Oxford.
Simon Gottelier is Investment
Manager, Listed Equities. Mr.
Gottelier has worked at Impax since
2004, co-managing the
Environmental Leaders and Water
Strategies and has worked on the
Global Environmental Markets Fund portfolio since its
inception in 2008. He has an honors degree in Modern
Languages from the University of Bristol.
Strategy
• Under normal market conditions, the Fund invests
primarily in equity securities of companies located
around the world, including at least 40% of its net assets
in securities of non-U.S. issuers.
• The Fund invests in environmental markets and seeks to
take advantage of rapidly accelerating global demand for
efficiency solutions in the areas of energy (alternative
energy and energy efficiency), water (water
infrastructure and technologies, pollution control) and
waste (waste management and technologies,
environmental support services).
• The Fund selects securities primarily on a company-to-
company basis by analyzing their valuation and growth
prospects based on their market and competitive
position, financial condition and economic, political and
regulatory environment. It may buy stocks in any sector
or industry, and is not limited to investing in securities of
a specific market capitalization, nor is it constrained by
any particular investment style. Therefore, it may invest
in “growth” stocks, “value” stocks or a combination of
both as well as securities of large, medium and/or small
capitalization companies.
• Sustainability or Environmental, Social and Governance
(ESG) analysis offers added insight into companies’
ability to grow and manage risk.
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The Pax World Global Environmental Markets Fund
Impax Asset Management, Ltd. and Morningstar Associates, LLC are not affiliated with ALPS Distributors, Inc. Distributed by: ALPS Distributors, Inc. Member FINRA
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ESG Managers
®
Portfolios are multi-manager funds, which are a mix of underlying mutual funds, ETFs and sleeve subadviser portfolios. The Funds'allocations may change due to market fluctuations
and other factors. Emerging market and international investments involve risk of capital loss from unfavorable fluctuations in currency values, differences in generally accepted accounting
principles, economic or political instability in other nations or increased volatility and lower trading volume.
2
Separately managed accounts and related advisory services are provided by Pax World Management LLC, a federally registered investment adviser. ALPS Distributors, Inc. is not the distributor for
Pax World's separately managed accounts.
PAX004288 (7/14)
Pax World Investments
30 Penhallow Street, Suite 400
Portsmouth, NH 03801
800.767.1729
[email protected]
www.paxworld.com




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E-mail: [email protected]
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®
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