Manager Commentary

As of December 31, 2013

Global equity markets delivered strong performance during the quarter and year ended December 31, 2013. Investors took encouragement from signs of economic recovery in Europe and aggressive economic stimulus policies in Japan. Th e commitment espoused by policymakers in China following leadership meetings there to transition that economy to a more open, consumer-driven market system pleased many investors, as did improving business conditions in other regions around the world. The year was not without its challenges. Fears of the potential negative impact on currencies was an ongoing concern through the fourth quarter as the U.S. Federal Reserve (the Fed) considered reducing its quantitative easing1 (QE)-related bond buying. Currency values were volatile and currency translation had the potential to reduce the investment returns of foreign investors in local markets.

The Pax World Global Women’s Equality Fund continued to navigate this environment effectively. For the quarter and the year ended December 31, 2013, the Fund returned 8.57% and 24.56%, respectively. For the same periods, the MSCI World (Net) Index2 (the Index) returned 8.00% and 26.68%, respectively.

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1Quantitative easing is monetary policy used by central banks to stimulate a national economy. Typically, central banks implement quantitative easing by buying financial assets from commercial banks and other private institutions, injecting a pre-determined quantity of money into the economy.

2Global markets are represented by the MSCI World Index (Net), a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The MSCI World Index consists of the following 24 developed market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States. Performance for the MSCI World Index is shown “net”, which includes dividend reinvestments after deduction of foreign withholding tax. One cannot invest directly in an index.

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