During the third quarter of 2025, the Impax Sustainable Allocation Fund experienced a decline in performance when measured against its benchmark, which comprises 60% S&P 500 and 40% Bloomberg Barclays US Aggregate Bond Index.
Despite challenges such as geopolitical tensions and concerns regarding US fiscal stability, global equity markets demonstrated resilience and delivered strong returns. This positive trend was fueled by a robust macroeconomic environment, healthy corporate earnings, and supportive fiscal measures, alongside deregulation within the banking sector. For equities, the investment community is closely monitoring the Federal Reserve's policy trajectory, with expectations leaning towards interest rate cuts as inflationary pressures ease and the labor market returns to normalcy. In this dynamic landscape, the investment team is strategically prioritizing robust, high-quality businesses. Their focus areas include innovative healthcare, digital infrastructure, resource efficiency, and sustainable solutions, aiming to capitalize on secular growth trends and enhance portfolio stability.
Amidst a complex global economic environment, the Fund's strategic emphasis on sectors aligned with sustainable development, such as healthcare innovation and green technologies, positions it to potentially benefit from long-term trends. By focusing on companies that are not only resilient but also contribute to a sustainable global economy, the Fund aims to achieve consistent, positive outcomes for investors while promoting a better future.