0000950123-11-081829.txt : 20110901 0000950123-11-081829.hdr.sgml : 20110901 20110831175616 ACCESSION NUMBER: 0000950123-11-081829 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20110630 FILED AS OF DATE: 20110901 DATE AS OF CHANGE: 20110831 EFFECTIVENESS DATE: 20110901 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Pax World Funds Trust II CENTRAL INDEX KEY: 0001426870 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-22187 FILM NUMBER: 111069296 BUSINESS ADDRESS: STREET 1: 30 PENHALLOW STREET STREET 2: SUITE 400 CITY: PORTSMOUTH STATE: NH ZIP: 03801 BUSINESS PHONE: 603-431-8022 MAIL ADDRESS: STREET 1: 30 PENHALLOW STREET STREET 2: SUITE 400 CITY: PORTSMOUTH STATE: NH ZIP: 03801 0001426870 S000025093 Pax MSCI EAFE ESG Index ETF C000074653 Shares EAPS 0001426870 S000025094 Pax MSCI North America ESG Index ETF C000074654 Shares NASI N-CSRS 1 b87708a1nvcsrs.htm PAX WORLD FUNDS TRUST II nvcsrs
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21187
PAX WORLD FUNDS TRUST II
 
(Exact name of registrant as specified in charter)
     
30 Penhallow Street, Suite 400, Portsmouth, NH   03801
 
(Address of principal executive offices)   (Zip code)
Pax World Management LLC
30 Penhallow Street, Suite 400, Portsmouth, NH 03801
Attn.: Joseph Keefe
 
(Name and address of agent for service)
Registrant’s telephone number, including area code: 800-767-1729
Date of fiscal year end: December 31
Date of reporting period: 06/30/11
     Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
     A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. §3507.
 
 

 


 

Item 1. Annual Report to Shareholders

 


 

(FULL PAGE IMAGE)
June 30, 2011 SEMI-ANNUAL REPORT Pax MSCI North America Pax MSCI EAFE ESG Index ETF ESG Index ETF (NASI) (EAPS) The prospectus explains what you should know about the funds before you invest. Please read it carefully. The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy or accuracy of this Prospectus. Any representation to the contrary is a criminal offense.

 


 

Table of Contents
 
         
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For More Information
 
General Fund Information
888.729.3863
www.esgshares.com
 
Transfer Agent and
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
 
Investment Adviser
Pax World Management LLC
30 Penhallow Street, Suite 400
Portsmouth, NH 03801
 


 

(Joseph Keefe)

 
Letter to Shareholders
by Joseph Keefe, President & CEO
 
Dear fellow shareholders,
 
As I write, Congress and the White House have just concluded a fractious tug-of-war over raising the nation’s debt ceiling, which simply enables the United States to pay for obligations that it has already incurred, that is to say, money that has already been appropriated by Congress. National politicians actually took the country to the brink of default before recovering their senses.
 
The market registered its discontent with this partisan spectacle—and perhaps with the outcome (an agreement that essentially kicks the problem down the road)—a few days later by dropping 513 points in a single day. On the very next day, Standard & Poor’s, one of the three major rating agencies, downgraded the nation’s credit rating for the first time in history, lowering it from AAA to AA+. S&P stated that its move was a result of reduced confidence in the ability of our nation’s policy makers and political institutions to address our fiscal and economic challenges. Looking at Treasury yields, however, one can only conclude that investors and lenders have a higher degree of confidence in the nation’s credit standing than does S&P.
 
Moreover, the problems in Washington are not the sole and likely not the primary cause of market volatility—we have also had to contend with the European debt crisis, higher oil prices accompanying the Arab Spring, a cooling economy in China, and other challenges. On the domestic front, we still have high unemployment, continued foreclosures and depressed housing prices while consumers are still digging out of debt rather than stirring demand so that corporations, understandably, continue to sit on the largest cash balances in history. With the consumer on the sidelines and the U.S. government officially out of the stimulus business, it may be that we will continue to see tepid growth, at best, for an extended period of time.
 
There is no doubt that the failures of policy makers, the anemic economy at home and volatile markets abroad makes it more difficult for businesses to plan for the future, and more difficult for investors to make informed decisions about where to allocate their resources. That said, our job at Pax World is to find opportunities to protect and grow your capital and income—even in the most volatile of markets. It doesn’t get any easier but we work very hard to meet this challenge. And we are not panicked. To the contrary, we remain confident in the resilience of the U.S. economy and in the careful investment approach we deploy on behalf of our shareholders.


1


 

 
 
Suffice it to say that the first six months of the year proved to be a particularly challenging investment environment. A six-month snapshot can be deceiving in any market, however, particularly for a fund family such as ours that focuses on stable, long-term growth rather than trying to shoot the lights out every quarter. When we talk about Sustainable Investing, we’re not only referring to the inclusion of environmental, social and governance (ESG) factors in our investment approach but also about constructing durable investment portfolios that deliver long-term value. That is our investment philosophy, and we believe it remains the best approach for investors even though short-term trends, and blips, and jitters, can sometimes test our intestinal fortitude.
 
So, while we expect muted growth, at best, over the remainder of 2011, we are optimistic as always that an investment approach focused on identifying and investing in the most sustainable companies is the best strategy for our shareholders, and the right strategy for our times. In this regard, I should underscore as well that we continue to actively engage companies and policy makers on a range of issues that we hope will prod markets in the direction of better social, environmental and financial outcomes.
 
Finally, I cannot help but note that while the world has focused on sovereign debt crises in Europe and political and fiscal paralysis in Washington, tens of thousands of children have starved to death in the Horn of Africa in one of the worst droughts and famines in recent memory. At Pax, our Global Citizens Program allows shareholders to contribute all or a portion of their dividends and capital gains to support the work of Mercy Corps (www.mercycorps.org) and Women Thrive Worldwide (www.womenthrive.org), two organizations working to lift families out of poverty across the globe.* In these difficult times, it always bears remembering that there are many who are much less fortunate than us. May we resolve, amidst all of the daily hullabaloo in Washington and on Wall Street, not to mention our ubiquitous, increasingly banal, celebrity-saturated media, that we keep these the least of our brothers and sisters in our thoughts and in our prayers, and perhaps most importantly, in our charitable giving.
 
Peace.
 
-S-Joseph F. Keefe
Joseph F. Keefe
 
The Global Citizens Program is available to shareholders in Pax World Funds but not currently available to shareholders in ESG Managers Portfolios or ESG Shares ETFs.


2


 

June 30, 2011

(JulieGorte)

 
Sustainable Investing
by Julie Fox Gorte, SVP for Sustainable Investment
 
Sustainability Update
 
The proxy season of 2011 was the busiest ever for Pax World. All told, we voted 1,601 proxies for 714 companies, voting with management 20% of the time and against management, or abstaining, 80% of the time on management proposals. We voted for shareholder proposals on company ballots in 80% of cases. While proxies may contain many individual proposals and many ballots are unique, a few factors stood out: we tended to vote against management primarily due to insufficient board diversity, when boards were classified (or not elected all at once), and when we believed that company executive compensation plans were overly generous or not well aligned with performance.
 
In 2011, we revised our proxy voting policies to strengthen standards for gender diversity on boards. Pax has always opposed slates of board candidates that included no women or minorities, and written letters to the companies explaining why. But we have also noted, as the percentage of women on boards has crept up—far too gradually—that far too many companies have adopted a minimalist approach to board diversity, checking off the box and considering their boards “diverse” if they include a single woman. Global figures from Governance Metrics International (GMI) show that among the approximately 4,200 companies GMI rates, the average board has ten people, only one of whom is a woman. Given the contributions women make to corporate governance, and the fact, borne out by many academic studies, that diverse groups do a better job of decision-making than homogeneous ones, the check-box approach smacks of tokenism and simply will not do. So, Pax amended its proxy voting policies to withhold votes from most director slates if they included fewer than two women. While this means that we routinely withhold votes from many board slates, we believe that it is important that companies begin hearing that gender diversity on their boards needs to be made a priority. During the height of the proxy season—from March through June—Pax withheld votes from or voted against boards at 264 companies for insufficient gender diversity, and 138 of those companies had only a single woman among the director candidates.
 
Pax World also engages in various forms of shareholder advocacy each year, and this year our advocacy focused on environmental and governance issues, and women’s empowerment. Pax joined with other investors several times to support environmental initiatives, ranging from support for stronger


3


 

June 30, 2011

Sustainability Update, continued
 
environmental standards (such as fuel economy, greenhouse gas regulation and support for clean energy) to better company disclosure of environmental impacts, including climate-related risks and opportunities, risks and opportunities related to the availability of water, and deforestation impacts of supply chains. Our governance advocacy focused on executive compensation—in particular, advocating for annual advisory votes on executive compensation in the US and Canada—and on companies’ board membership in industry associations that have opposed regulation of greenhouse gas emissions or clean energy standards.
 
On women’s empowerment, Pax continues to co-lead an initiative of the United Nations Principles for Responsible Investment focusing on board diversity, and this year we also launched our “Say No to All Male Boards” campaign, urging investors, mutual funds, and asset owners to withhold votes from all-male board slates and follow up with letters to companies explaining the reasons for those votes.
 
Investor advocacy for better environmental, social and governance performance and disclosure is something that rarely achieves results quickly, but over the long term often does. It was largely due to investor advocacy that US companies are now required to offer shareholders the ability to cast advisory votes on executive compensation, for example. Investor interest in board diversity provided the spark that led several countries (e.g., Great Britain, France, Germany, Spain, Norway, Australia and Italy) to undertake stronger measures to encourage or require gender diversity on corporate boards. This work, whether we do it alone or as part of investor coalitions, does make a difference over time, and we intend to keep doing it.


4


 

 
Pax MSCI North America ESG Index ETF

June 30, 2011

 
Commentary
 
The Pax MSCI North America ESG Index ETF (NASI) employs a passive management approach, seeking to track the performance of the MSCI North America ESG Index, a broadly diversified, sector-neutral index of American and Canadian companies with superior ESG performance as rated by MSCI ESG Research.
 
The Fund’s NAV return of 4.38% for the six-month period ended June 30, 2011 closely tracked the benchmark MSCI North America ESG Index return of 4.83%. During the period the health care, industrials and the energy sectors made the most positive contributions to performance. While most of the sectors contributed positively to performance, a notable laggard to the overall performance was information technology (18.03% average weight of the total sector during the period). Companies that contributed most positively to performance included IBM, a company that provides computer solutions through technology service, systems and software, which performed well despite the overall lagging performance of the information technology sector; Johnson and Johnson, a health care products company, also contributed positively to performance (3.20% and 2.71% respectively, average weights of total investments for the period). Companies that detracted most from performance included Cisco Systems, Inc., a networking and communications equipment company, and Google, Inc., a global internet search engine company (1.61% and 2.19%, respectively, average weights of total investments for the period).
 
The Fund described herein is indexed to an MSCI index. The Fund referred to herein is not sponsored, endorsed or promoted by MSCI or its affiliates, and MSCI and its affiliates bear no liability with respect to any such fund or any index on which such fund is based.
 
The MSCI North America ESG Index is designed to measure the performance of equity securities of issuers organized or operating in the United States and Canada that have high Environmental, Social and Governance (ESG) ratings relative to their sector and industry group peers, as rated by MSCI ESG Research annually.
 
MSCI ESG Research evaluates companies’ ESG characteristics and derives corresponding ESG scores and ratings. Companies are ranked by ESG score against their sector peers to determine their eligibility for the MSCI ESG indices. MSCI ESG Research identifies the highest-rated companies in each peer group to meet the float-adjusted market capitalization sector targets. The rating system is based on general and industry-specific ESG criteria, assigning ratings on a 9-point scale from AAA (highest) to C (lowest). Constituents of the MSCI EAFE Index having an ESG rating of B or above are eligible for inclusion in the Index.


5


 

 
Pax MSCI North America ESG Index ETF

June 30, 2011

Commentary, continued
 
The MSCI North America ESG Index includes or utilizes data, ratings, analysis, reports, analytics or other information or materials from MSCI’s ESG Research Group within Institutional Shareholder Services Inc., an indirect wholly-owned subsidiary of MSCI. The prospectus contains a more detailed description of the limited relationship MSCI has with Pax World Management LLC, ESG Shares and any related funds.


6


 

 
Pax MSCI North America ESG Index ETF

June 30, 2011

 
Portfolio Highlights
 
Returns—Period ended June 30, 2011
 
                                   
                  Total Return
       
            One
    Since
       
      YTD     Year     Inception1        
   
NAV Return2
      4.38 %     26.42 %     14.57 %        
Market Value Return2
      4.04 %     26.36 %     14.60 %        
                                   
MSCI North America ESG Index3
      4.83 %     27.81 %     15.41 %        
 
All total return figures assume reinvestment of dividends and capital gains at net asset value; actual returns may differ. Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. Total returns for periods of less than one year have not been annualized.
 
An index is a statistical measure of a specified financial market or sector. An index does not actually hold a portfolio of securities, incur expenses or pay any transaction costs. Therefore, index returns do not reflect deductions for fees or expenses and are not available for direct investment. In comparison, the Fund’s performance is negatively impacted by these deductions. Fund returns do not reflect brokerage commissions on transactions in Fund shares or taxes that a shareholder would pay on Fund distributions.
 
1The Fund’s inception date is May 18, 2010.
 
2The NAV return is based on the closing NAV (net asset value per share) of the Fund and the Market Value return is based on the market price per share of the Fund. The market prices used for Market Value returns are based on the midpoint of the bid/ask spread at 4 p.m. ET and do not represent the returns an investor would receive if shares were traded at other times.
 
3The MSCI North America ESG Index is designed to measure the performance of equity securities of issuers organized or operating in North America that have high environmental, social and governance (ESG) ratings from MSCI, selected initially and adjusted annually by MSCI.


7


 

 
Pax MSCI North America ESG Index ETF

June 30, 2011

Portfolio Highlights, continued
 
         
Asset Allocation   Percent of Net Assets
 
Common Stocks
    99 .8%
Money Market Funds
    0 .1%
Other Assets & Liabilities
    0 .1%
         
Total Net Assets
    100 .0%
 
Top Ten Holdings
 
         
Company   Percent of Net Assets
 
IBM
    3 .1%
Johnson & Johnson
    2 .7%
Procter & Gamble Co. 
    2 .6%
Oracle Corp. 
    1 .9%
Google, Inc. (Class A)
    1 .9%
Intel Corp. 
    1 .8%
PepsiCo, Inc. 
    1 .6%
Merck & Co., Inc. 
    1 .6%
McDonald’s Corp. 
    1 .3%
Cisco Systems, Inc. 
    1 .3%
         
Total
    19 .8%
 
Ten largest holdings do not include money market securities, certificates of deposit, commercial paper or cash and equivalents, if applicable.
 
Sector Diversification
 
         
Sector   Percent of Net Assets
 
Financials
    17 .1%
Information Technology
    17 .1%
Industrials
    12 .5%
Health Care
    11 .4%
Consumer Discretionary
    11 .1%
Consumer Staples
    10 .2%
Energy
    9 .8%
Materials
    5 .7%
Utilities
    2 .9%
Telecommunication Services
    2 .0%
Cash and cash equivalents plus other assets less liabilities
    0 .2%
         
Total
    100 .0%
 
Geographical Diversification
 
         
Country   Percent of Net Assets
 
United States
    88 .2%
Canada
    11 .7%
Other Assets & Liabilities
    0 .1%
         
Total
    100 .0%


8


 

 
Pax MSCI EAFE ESG Index ETF

June 30, 2011

 
Commentary
 
The Pax MSCI EAFE ESG Index ETF (EAPS) employs a passive management approach, seeking to track the performance of the MSCI EAFE ESG Index, which consists of companies operating in developed market countries around the world, excluding the U.S. and Canada, that have superior ESG performance as rated by MSCI ESG Research.
 
The Fund commenced operations on January 27, 2011. For the since inception period through June 30, 2011, the Fund’s NAV return was 0.66% versus the MSCI EAFE ESG Index return of 1.91%. During the period, country exposure to Japan, which is the largest country weighting in the ETF, was the largest detractor to performance. The tsunami and resulting nuclear crisis at the Fukushima Daiichi Nuclear Power Station significantly impacted shares of Japanese companies. Companies that detracted most from performance included Mitsui Fudosan Co., Ltd., a Japanese property development company, and Kubota Corp., a Japanese manufacturer of agricultural and construction equipment. Due to their heavier weightings than the index, both companies mentioned above created the majority of the tracking error versus the MSCI EAFE ESG Index (2.62% and 1.43%, respectively, average weights of total investments in the Fund versus 0.27% and 0.20%, respectively, average weights of the total investments in the index). On a positive note, Europe (45.28% average weight of total investments for the period), in general, was the largest positive contributor to performance. Companies that contributed most positively to performance included BASF SE, a world leading chemical company located in Germany, and GlaxoSmithKline PLC., one of the world’s leading research-based pharmaceutical and healthcare companies headquartered in the United Kingdom.
 
The Fund described herein is indexed to an MSCI index. The Fund referred to herein is not sponsored, endorsed or promoted by MSCI or its affiliates, and MSCI and its affiliates bear no liability with respect to any such fund or any index on which such fund is based.
 
The MSCI EAFE ESG Index is designed to measure the performance of equity securities of issuers organized or operating in the United States and Canada that have high Environmental, Social and Governance (ESG) ratings relative to their sector and industry group peers, as rated by MSCI ESG Research annually.
 
MSCI ESG Research evaluates companies’ ESG characteristics and derives corresponding ESG scores and ratings. Companies are ranked by ESG score against their sector peers to determine their eligibility for the MSCI ESG indices. MSCI ESG Research identifies the highest-rated companies in each peer group to meet the float-adjusted market capitalization sector targets. The rating system is based on general and industry-specific ESG criteria, assigning ratings on a 9-point scale from AAA (highest) to C (lowest). Constituents of the


9


 

 
Pax MSCI EAFE ESG Index ETF

June 30, 2011

Commentary, continued
 
MSCI EAFE Index having an ESG rating of B or above are eligible for inclusion in the Index.
 
The MSCI EAFE ESG Index includes or utilizes data, ratings, analysis, reports, analytics or other information or materials from MSCI’s ESG Research Group within Institutional Shareholder Services Inc., an indirect wholly-owned subsidiary of MSCI. The prospectus contains a more detailed description of the limited relationship MSCI has with Pax World Management LLC, ESG Shares and any related funds.


10


 

 
Pax MSCI EAFE ESG Index ETF

June 30, 2011

 
Portfolio Highlights
 
Returns—Period ended June 30, 2011
 
                       
            Total Return
     
      3 Month     Since Inception1      
 
NAV Return2
      1.22 %     0.66 %    
Market Value Return2
      0.00 %     -0.24 %    
                       
MSCI EAFE ESG Index3
      1.70 %     1.91 %    
 
All total return figures assume reinvestment of dividends and capital gains at net asset value; actual returns may differ. Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. Total returns for periods of less than one year have not been annualized.
 
An index is a statistical measure of a specified financial market or sector. An index does not actually hold a portfolio of securities, incur expenses or pay any transaction costs. Therefore, index returns do not reflect deductions for fees or expenses and are not available for direct investment. In comparison, the Fund’s performance is negatively impacted by these deductions. Fund returns do not reflect brokerage commissions on transactions in Fund shares or taxes that a shareholder would pay on Fund distributions.
 
1The Fund’s inception date is January 27, 2011.
 
2The NAV return is based on the closing NAV (net asset value per share) of the Fund and the Market Value return is based on the market price per share of the Fund. The market prices used for Market Value returns are based on the midpoint of the bid/ask spread at 4 p.m. ET and do not represent the returns an investor would receive if shares were traded at other times.
 
3MSCI EAFE ESG Index is a free float-adjusted market capitalization weighted index designed to measure the performance of equity securities of issuers organized or operating in Europe and the Asia Pacific region that have high environmental, social and governance (ESG) ratings from MSCI, selected initially and adjusted annually by MSCI.


11


 

 
Pax MSCI EAFE ESG Index ETF

June 30, 2011

Portfolio Highlights, continued
 
         
Asset Allocation   Percent of Net Assets
 
Common Stocks
    95 .4%
Money Market Funds
    4 .3%
Other Assets & Liabilities
    0 .3%
         
Total Net Assets
    100 .0%
 
Top Ten Holdings
 
         
Company   Percent of Net Assets
 
HSBC Holdings PLC
    3 .3%
Vodafone Group PLC
    2 .8%
Novartis AG
    2 .4%
GlaxoSmithKline PLC
    2 .3%
Roche Holding AG
    2 .2%
Banco Santander SA
    2 .0%
BASF SE
    2 .0%
Commonwealth Bank of Australia
    1 .8%
BG Group PLC
    1 .6%
Colruyt SA
    1 .5%
         
Total
    21 .9%
 
Ten largest holdings do not include money market securities, certificates of deposit, commercial paper or cash and equivalents, if applicable.
 
Sector Diversification
 
         
Sector   Percent of Net Assets
 
Financials
    24 .0%
Industrials
    11 .6%
Consumer Staples
    10 .8%
Consumer Discretionary
    10 .8%
Health Care
    10 .0%
Materials
    9 .2%
Energy
    6 .4%
Telecommunication Services
    6 .3%
Information Technology
    3 .2%
Utilities
    3 .1%
Cash and cash equivalents plus other assets less liabilities
    4 .6%
         
Total
    100 .0%


12


 

 
Pax MSCI EAFE ESG Index ETF

June 30, 2011

Portfolio Highlights, continued
 
Geographical Diversification
 
         
Country   Percent of Net Assets
 
Japan
    22 .0%
United Kingdom
    19 .9%
Australia
    9 .1%
Switzerland
    8 .3%
France
    7 .5%
Germany
    5 .9%
Spain
    5 .9%
Sweden
    4 .0%
Netherlands
    2 .2%
Belgium
    2 .1%
Denmark
    1 .7%
Italy
    1 .7%
Norway
    1 .2%
Finland
    1 .2%
Hong Kong
    0 .7%
Luxembourg
    0 .6%
New Zealand
    0 .5%
Greece
    0 .5%
Israel
    0 .4%
Short Term Investment
    4 .3%
Other Assets & Liabilities
    0 .3%
         
Total
    100 .0%


13


 

 
Pax World Funds Trusts II

June 30, 2011

 
Shareholder Expense Examples
 
Examples As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of your fund shares and (2) ongoing costs, including management fees, and other Fund expenses. The examples that follow are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and compare these costs with the ongoing costs of investing in other mutual funds. Transaction costs are not reflected. For more information, see the prospectus or talk to your financial adviser.
 
The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period beginning on January 1, 2011 and ending on June 30, 2011.
 
Actual Expenses The first line in the table provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
 
Hypothetical Examples for Comparison Purposes The second line in the table provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of other funds.
 
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the second table is useful in comparing ongoing costs only, and will not help you


14


 

 
Pax World Funds Trusts II

June 30, 2011

Shareholder Expense Examples, continued
 
determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
 
                           
    Beginning
    Ending
  Annualized
   
    Account Value
    Account Value
  Expense
  Expenses Paid
    (1/1/11)     (6/30/11)   Ratio   During Period1
 
Pax MSCI North America ESG Index ETF
Based on Actual Fund Return
  $ 1,000     $ 1,043.80     0.50%   $ 2.53
 
 
Based on Hypothetical 5% Return
  $ 1,000     $ 1,022.32     0.50%   $ 2.51
 
 
Pax MSCI EAFE ESG Index ETF2
                         
Based on Actual Fund Return
  $ 1,000     $ 1,006.60     0.55%   $ 2.34
 
 
Based on Hypothetical 5% Return
  $ 1,000     $ 1,022.07     0.55%   $ 2.76
 
 
 
1 Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the period beginning on January 1, 2011 and ending on June 30, 2011).
 
2 Actual period is from January 27, 2011 (commencement of operations) to June 30, 2011. Hypothetical period is from January 1, 2011 to June 30, 2011.


15


 

 
Pax MSCI North America ESG Index ETF

June 30, 2011 (Unaudited)

Schedule of Investments
 
                 
Security Description   Shares     Value  
   
 
COMMON STOCKS: 99.8%
 
Consumer Discretionary: 11.1%
Advance Auto Parts, Inc. 
    54     $ 3,159  
Autoliv, Inc. 
    58       4,550  
AutoZone, Inc. (a)
    17       5,012  
Bed Bath & Beyond, Inc. (a)
    166       9,689  
Best Buy Co., Inc. 
    219       6,879  
BorgWarner, Inc. (a)
    73       5,898  
Cablevision Systems Corp. (Class A)
    139       5,033  
Canadian Tire Corp., Ltd. (Class A)
    51       3,337  
CarMax, Inc. (a)
    147       4,861  
Chipotle Mexican Grill, Inc. (a)
    21       6,472  
Coach, Inc. 
    193       12,339  
Darden Restaurants, Inc. 
    90       4,478  
DeVry, Inc. 
    43       2,543  
Discovery Communications, Inc. (Series A) (a)
    90       3,686  
Discovery Communications, Inc. (Series C) (a)
    92       3,363  
Ford Motor Co. (a)
    2,307       31,814  
GameStop Corp. (Class A) (a)
    99       2,640  
Genuine Parts Co. 
    103       5,603  
Gildan Activewear, Inc. 
    75       2,643  
Harley-Davidson, Inc. 
    154       6,309  
Hasbro, Inc. 
    81       3,558  
J.C. Penney Co., Inc. 
    116       4,007  
Johnson Controls, Inc. 
    444       18,497  
Kohl’s Corp. 
    181       9,052  
Liberty Global, Inc. (Series A) (a)
    74       3,333  
Liberty Global, Inc. (Series C) (a)
    70       2,989  
Liberty Media Corp. – Interactive (Class A) (a)
    373       6,255  
Limited Brands, Inc. 
    181       6,959  
Lowe’s Cos., Inc. 
    886       20,653  
Macy’s, Inc. 
    277       8,100  
Marriott International, Inc. (Class A)
    192       6,814  
Mattel, Inc. 
    228       6,268  
McDonald’s Corp. 
    657       55,398  
Mohawk Industries, Inc. (a)
    38       2,280  
Newell Rubbermaid, Inc. 
    190       2,998  
NIKE, Inc. (Class B)
    241       21,685  
Nordstrom, Inc. 
    114       5,351  
O’Reilly Automotive, Inc. (a)
    93       6,092  
PetSmart, Inc. 
    77       3,494  
Ross Stores, Inc. 
    78       6,249  
Staples, Inc. 
    473       7,473  
Starbucks Corp. 
    488       19,271  
Starwood Hotels & Resorts Worldwide, Inc. 
    126       7,061  
Target Corp. 
    438       20,547  
The Gap, Inc. 
    282       5,104  
The TJX Cos., Inc. 
    259       13,605  
The Washington Post Co. (Class B)
    3       1,257  
Thomson Reuters Corp. 
    247       9,274  
Tiffany & Co. 
    78       6,125  
Tim Hortons, Inc. 
    109       5,322  
Time Warner Cable, Inc. 
    225       17,559  
Urban Outfitters, Inc. (a)
    86       2,421  
V.F. Corp. 
    57       6,188  
Virgin Media, Inc. 
    201       6,016  
Whirlpool Corp. 
    50       4,066  
Yellow Media, Inc. 
    338       841  
Yum! Brands, Inc. 
    306       16,903  
                 
              479,373  
                 
Consumer Staples: 10.2%
Avon Products, Inc. 
    282       7,896  
Campbell Soup Co. 
    131       4,526  
Coca-Cola Enterprises, Inc. 
    216       6,303  
Colgate-Palmolive Co. 
    324       28,321  
ConAgra Foods, Inc. 
    285       7,356  
Dr. Pepper Snapple Group, Inc. 
    147       6,164  
Empire Co., Ltd. 
    18       1,043  
General Mills, Inc. 
    416       15,483  
Green Mountain Coffee Roasters, Inc. (a)
    84       7,498  
H.J. Heinz Co. 
    210       11,189  
Hansen Natural Corp. (a)
    49       3,967  
Hormel Foods Corp. 
    96       2,862  
Kellogg Co. 
    168       9,294  
Kimberly-Clark Corp. 
    265       17,638  
Kraft Foods, Inc. (Class A)
    1,037       36,533  
Loblaw Cos., Ltd. 
    73       2,948  
McCormick & Co., Inc. 
    79       3,916  
Mead Johnson Nutrition Co. 
    134       9,052  
Metro, Inc. (Class A)
    67       3,334  
PepsiCo, Inc. 
    987       69,514  
Procter & Gamble Co. 
    1,783       113,345  
Ralcorp Holdings, Inc. (a)
    36       3,117  
Safeway, Inc. 
    241       5,632  
Saputo, Inc. 
    93       4,485  
Sara Lee Corp. 
    387       7,349  
Sysco Corp. 
    381       11,880  
The Clorox Co. 
    90       6,070  
The Estee Lauder Cos., Inc. (Class A)
    79       8,310  
The J.M. Smucker Co. 
    78       5,962  
The Kroger Co. 
    396       9,821  
Viterra, Inc. 
    243       2,640  
Whole Foods Market, Inc. 
    96       6,091  
                 
              439,539  
                 
Energy: 9.8%
Apache Corp. 
    250       30,848  
ARC Resources, Ltd. 
    186       4,823  
Bonavista Energy Corp. 
    87       2,577  
Cabot Oil & Gas Corp. 
    69       4,575  
Cameron International Corp. (a)
    160       8,046  
Cenovus Energy, Inc. 
    493       18,607  
Chesapeake Energy Corp. 
    427       12,678  
Cimarex Energy Co. 
    56       5,036  
Concho Resources, Inc. (a)
    64       5,878  
Continental Resources, Inc. (a)
    30       1,947  
Crescent Point Energy Corp. 
    159       7,348  
Denbury Resources, Inc. (a)
    261       5,220  

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


16


 

 
Pax MSCI North America ESG Index ETF

June 30, 2011 (Unaudited)

 
Schedule of Investments, continued

                 
Security Description   Shares     Value  
   
 
COMMON STOCKS, continued
Energy, continued
Devon Energy Corp. 
    265     $ 20,885  
Diamond Offshore Drilling, Inc. 
    45       3,168  
El Paso Corp. 
    461       9,312  
Enbridge, Inc. 
    477       15,510  
Enerplus Corp. 
    117       3,694  
Ensco PLC, ADR
    37       1,972  
EOG Resources, Inc. 
    166       17,355  
EQT Corp. 
    93       4,884  
FMC Technologies, Inc. (a)
    157       7,032  
Hess Corp. 
    199       14,877  
Kinder Morgan Management, LLC (a)(b)
    55       3,607  
Marathon Oil Corp. 
    465       24,496  
National-Oilwell Varco, Inc. 
    276       21,586  
Newfield Exploration Co. (a)
    88       5,986  
Nexen, Inc. 
    345       7,777  
Noble Corp. 
    165       6,503  
Noble Energy, Inc. 
    115       10,308  
Pacific Rubiales Energy Corp. 
    166       4,449  
Penn West Petroleum ,Ltd. 
    298       6,881  
PetroBakken Energy, Ltd.(Class A)
    55       755  
Petrohawk Energy Corp. (a)
    198       4,885  
Pioneer Natural Resources Co. 
    69       6,180  
Plains Exploration & Production Co. (a)
    92       3,507  
QEP Resources, Inc. 
    115       4,810  
Range Resources Corp. 
    105       5,828  
Southwestern Energy Co. (a)
    228       9,777  
Spectra Energy Corp. 
    424       11,622  
Suncor Energy, Inc. 
    1,027       40,252  
Sunoco, Inc. 
    79       3,295  
Talisman Energy, Inc. 
    671       13,783  
Ultra Petroleum Corp. (a)
    100       4,580  
Vermilion Energy, Inc. 
    55       2,908  
Weatherford International, Ltd. (a)
    486       9,113  
Whiting Petroleum Corp. (a)
    78       4,439  
                 
              423,599  
                 
Financials: 17.1%
ACE, Ltd. 
    219       14,415  
AFLAC, Inc. 
    307       14,331  
American Express Co. 
    708       36,604  
Ameriprise Financial, Inc. 
    162       9,344  
Annaly Capital Management, Inc. (c)
    526       9,489  
Arch Capital Group, Ltd. (a)
    88       2,809  
Assurant, Inc. 
    66       2,394  
Axis Capital Holdings, Ltd. 
    73       2,260  
Bank of Nova Scotia
    705       42,470  
BB&T Corp. 
    454       12,185  
Berkshire Hathaway, Inc. (Class B) (a)
    564       43,648  
BlackRock, Inc. 
    60       11,509  
Boston Properties, Inc. (c)
    93       9,873  
Capital One Financial Corp. 
    297       15,346  
CB Richard Ellis Group, Inc. (Class A) (a)
    190       4,771  
Chubb Corp. 
    193       12,084  
Cincinnati Financial Corp. 
    102       2,976  
CME Group, Inc. 
    42       12,247  
Comerica, Inc. 
    115       3,976  
Discover Financial Services
    357       9,550  
Duke Realty Corp. (c)
    165       2,312  
Eaton Vance Corp. 
    77       2,328  
Everest Re Group, Ltd. 
    36       2,943  
Federal Realty Investment Trust (c)
    40       3,407  
Fifth Third Bancorp
    601       7,663  
Franklin Resources, Inc. 
    102       13,392  
General Growth Properties, Inc. (c)
    283       4,723  
Genworth Financial, Inc. (Class A) (a)
    321       3,300  
HCP, Inc. (c)
    262       9,613  
Health Care REIT, Inc. (c)
    112       5,872  
Host Hotels & Resorts, Inc. (c)
    445       7,543  
Hudson City Bancorp, Inc. 
    310       2,539  
Intercontinental Exchange, Inc. (a)
    48       5,986  
Invesco, Ltd. 
    301       7,043  
Jefferies Group, Inc. 
    90       1,836  
KeyCorp
    622       5,181  
Legg Mason, Inc. 
    94       3,079  
Liberty Property Trust (c)
    75       2,444  
Lincoln National Corp. 
    207       5,897  
M&T Bank Corp. 
    73       6,420  
Marshall & Ilsley Corp. 
    346       2,758  
New York Community Bancorp, Inc. 
    285       4,272  
Northern Trust Corp. 
    142       6,526  
NYSE Euronext
    171       5,860  
PartnerRe, Ltd. 
    42       2,892  
People’s United Financial, Inc. 
    237       3,185  
PNC Financial Services Group, Inc. 
    345       20,565  
Principal Financial Group, Inc. 
    210       6,388  
ProLogis, Inc. (c)
    277       9,928  
Prudential Financial, Inc. 
    316       20,094  
Regency Centers Corp. (c)
    54       2,374  
Regions Financial Corp. 
    823       5,103  
RenaissanceRe Holdings, Ltd. 
    35       2,448  
Royal Bank of Canada
    933       53,332  
SEI Investments Co. 
    97       2,184  
Simon Property Group, Inc. (c)
    192       22,316  
State Street Corp. 
    328       14,790  
T. Rowe Price Group, Inc. 
    169       10,198  
The Bank of New York Mellon Corp. 
    812       20,803  
The Charles Schwab Corp. 
    669       11,005  
The Macerich Co. (c)
    85       4,548  
The NASDAQ OMX Group, Inc. (a)
    81       2,049  
The Progressive Corp. 
    411       8,787  
The Toronto-Dominion Bank
    578       49,011  
The Travelers Cos., Inc. 
    282       16,463  
U.S. Bancorp
    1,258       32,092  
Ventas, Inc. (c)
    106       5,587  
Vornado Realty Trust (c)
    108       10,063  
W.R. Berkley Corp. 
    78       2,530  
XL Group PLC
    204       4,484  
                 
              738,437  
                 

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


17


 

 
Pax MSCI North America ESG Index ETF

June 30, 2011 (Unaudited)

 
Schedule of Investments, continued

                 
Security Description   Shares     Value  
   
 
COMMON STOCKS, continued
Financials, continued
Health Care: 11.4%
Abbott Laboratories
    963     $ 50,673  
Aetna, Inc. 
    252       11,111  
Agilent Technologies, Inc. (a)
    228       11,653  
Allergan, Inc. 
    200       16,650  
Baxter International, Inc. 
    379       22,623  
Becton, Dickinson & Co. 
    145       12,495  
Biogen Idec, Inc. (a)
    150       16,038  
Bristol-Myers Squibb Co. 
    1,114       32,262  
CIGNA Corp. 
    177       9,103  
Coventry Health Care, Inc. (a)
    98       3,574  
Gilead Sciences, Inc. (a)
    520       21,533  
Henry Schein, Inc. (a)
    60       4,295  
Humana, Inc. 
    111       8,940  
Johnson & Johnson
    1,740       115,745  
Life Technologies Corp. (a)
    118       6,144  
Medco Health Solutions, Inc. (a)
    265       14,978  
Medtronic, Inc. 
    703       27,087  
Merck & Co., Inc. 
    1,967       69,415  
Patterson Cos., Inc. 
    64       2,105  
Valeant Pharmaceuticals International, Inc. 
    189       9,828  
Waters Corp. (a)
    60       5,744  
WellPoint, Inc. 
    246       19,377  
                 
              491,373  
                 
Industrials: 12.5%
3M Co. 
    442       41,924  
AMETEK, Inc. 
    105       4,715  
Avery Dennison Corp. 
    66       2,550  
Bombardier, Inc. (Class B)
    940       6,774  
C.H. Robinson Worldwide, Inc. 
    108       8,515  
CAE, Inc. 
    168       2,266  
Canadian National Railway Co. 
    301       24,075  
Canadian Pacific Railway, Ltd. 
    111       6,925  
Caterpillar, Inc. 
    398       42,371  
Cooper Industries PLC
    108       6,444  
CSX Corp. 
    729       19,114  
Cummins, Inc. 
    123       12,729  
Danaher Corp. 
    367       19,447  
Deere & Co. 
    276       22,756  
Delta Air Lines, Inc. (a)
    409       3,751  
Dover Corp. 
    122       8,272  
Eaton Corp. 
    210       10,804  
Emerson Electric Co. 
    493       27,731  
Equifax, Inc. 
    81       2,812  
Expeditors International Washington, Inc. 
    139       7,115  
Fastenal Co. 
    183       6,586  
FedEx Corp. 
    196       18,591  
Finning International, Inc. 
    112       3,321  
Fluor Corp. 
    115       7,436  
Foster Wheeler AG (a)
    82       2,491  
IHS, Inc. (Class A) (a)
    27       2,252  
Illinois Tool Works, Inc. 
    294       16,608  
Ingersoll-Rand PLC
    216       9,809  
Iron Mountain, Inc. 
    118       4,023  
J.B. Hunt Transport Services, Inc. 
    63       2,967  
Jacobs Engineering Group, Inc. (a)
    83       3,590  
Joy Global, Inc. 
    69       6,572  
Manpower, Inc. 
    54       2,897  
Masco Corp. 
    235       2,827  
Norfolk Southern Corp. 
    233       17,459  
PACCAR, Inc. 
    216       11,035  
Pall Corp. 
    75       4,217  
Parker Hannifin Corp. 
    106       9,512  
Pentair, Inc. 
    64       2,583  
Pitney Bowes, Inc. 
    133       3,058  
Precision Castparts Corp. 
    94       15,477  
Quanta Services, Inc. (a)
    138       2,788  
R.R. Donnelley & Sons Co. 
    135       2,647  
Ritchie Bros Auctioneers, Inc. 
    63       1,735  
Robert Half International, Inc. 
    91       2,460  
Rockwell Automation, Inc. 
    93       8,069  
Rockwell Collins, Inc. 
    102       6,292  
Roper Industries, Inc. 
    63       5,248  
Southwest Airlines Co. 
    388       4,431  
The Dun & Bradstreet Corp. 
    33       2,493  
Tyco International, Ltd. 
    310       15,323  
United Parcel Service, Inc. (Class B)
    481       35,079  
W.W. Grainger, Inc. 
    39       5,992  
Waste Management, Inc. 
    295       10,995  
                 
              537,953  
                 
Information Technology: 17.1%
Accenture PLC (Class A)
    420       25,376  
Adobe Systems, Inc. (a)
    331       10,410  
Advanced Micro Devices, Inc. (a)
    381       2,663  
Analog Devices, Inc. 
    196       7,672  
Applied Materials, Inc. 
    863       11,228  
Autodesk, Inc. (a)
    150       5,790  
CA, Inc. 
    267       6,098  
CGI Group, Inc. (Class A) (a)
    154       3,802  
Cisco Systems, Inc. 
    3,517       54,900  
Cognizant Technology Solutions Corp. (Class A) (a)
    199       14,595  
Dell, Inc. (a)
    1,136       18,937  
EMC Corp. (a)
    1,353       37,275  
Flextronics International, Ltd. (a)
    498       3,197  
Google, Inc. (Class A) (a)
    159       80,515  
Hewlett-Packard Co. 
    1,373       49,977  
IBM
    778       133,466  
Intel Corp. 
    3,470       76,895  
Intuit, Inc. (a)
    193       10,009  
Motorola Mobility Holdings, Inc. (a)
    183       4,033  
Motorola Solutions, Inc. (a)
    198       9,116  
NVIDIA Corp. (a)
    381       6,071  
Open Text Corp. (a)
    37       2,372  
Oracle Corp. 
    2,564       84,381  
Research In Motion, Ltd. (a)
    309       8,933  
Salesforce.com, Inc. (a)
    81       12,067  
Symantec Corp. (a)
    499       9,840  
Texas Instruments, Inc. 
    767       25,181  

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


18


 

 
Pax MSCI North America ESG Index ETF

June 30, 2011 (Unaudited)

 
Schedule of Investments, continued

                 
Security Description   Shares     Value  
   
 
COMMON STOCKS, continued
Information Technology, continued
Xerox Corp. 
    916     $ 9,536  
Yahoo!, Inc. (a)
    814       12,243  
                 
              736,578  
                 
Materials: 5.7%
Agnico-Eagle Mines, Ltd. 
    111       7,018  
Agrium, Inc. 
    103       9,045  
Air Products & Chemicals, Inc. 
    141       13,477  
Airgas, Inc. 
    52       3,642  
Alcoa, Inc. 
    695       11,023  
Allegheny Technologies, Inc. 
    66       4,189  
Ball Corp. 
    110       4,231  
Celanese Corp. (Series A)
    102       5,438  
Cliffs Natural Resources, Inc. 
    91       8,413  
Crown Holdings, Inc. (a)
    102       3,960  
Eastman Chemical Co. 
    46       4,695  
Ecolab, Inc. 
    153       8,626  
Franco-Nevada Corp. 
    82       3,061  
Inmet Mining Corp. 
    34       2,447  
International Flavors & Fragrances, Inc. 
    52       3,340  
International Paper Co. 
    273       8,141  
Kinross Gold Corp. 
    742       11,717  
Lubrizol Corp. 
    42       5,639  
LyondellBasell Industries NV (Class A)
    186       7,165  
Martin Marietta Materials, Inc. 
    30       2,399  
MeadWestvaco Corp. 
    110       3,664  
Nucor Corp. 
    207       8,532  
Osisko Mining Corp. (a)
    225       3,497  
Owens-Illinois, Inc. (a)
    107       2,762  
Potash Corp. of Saskatchewan, Inc. 
    559       31,925  
Praxair, Inc. 
    198       21,461  
Rock-Tenn Co. (Class A)
    45       2,985  
Sealed Air Corp. 
    105       2,498  
Sigma-Aldrich Corp. 
    80       5,870  
Teck Resources, Ltd. (Class B)
    381       19,365  
United States Steel Corp. 
    94       4,328  
Vulcan Materials Co. 
    84       3,236  
Yamana Gold, Inc. 
    485       5,662  
                 
              243,451  
                 
Telecommunication Services: 2.0%
American Tower Corp. (Class A) (a)
    261       13,658  
BCE, Inc. 
    163       6,392  
CenturyLink, Inc. 
    393       15,889  
Crown Castle International Corp. (a)
    190       7,750  
Frontier Communications Corp. 
    650       5,246  
MetroPCS Communications, Inc. (a)
    163       2,805  
NII Holdings, Inc. (a)
    111       4,704  
Rogers Communications, Inc. (Class B)
    276       10,929  
SBA Communications Corp. (Class A) (a)
    75       2,864  
Sprint Nextel Corp. (a)
    1,956       10,543  
Windstream Corp. 
    330       4,277  
                 
              85,057  
                 
Utilities: 2.9%
Alliant Energy Corp. 
    72       2,927  
American Water Works Co., Inc. 
    114       3,357  
Calpine Corp. (a)
    204       3,290  
Canadian Utilities, Ltd. (Class A)
    57       3,311  
CenterPoint Energy, Inc. 
    264       5,108  
Consolidated Edison, Inc. 
    191       10,169  
DTE Energy Co. 
    111       5,552  
Integrys Energy Group, Inc. 
    51       2,644  
MDU Resources Group, Inc. 
    123       2,767  
NextEra Energy, Inc. 
    262       15,054  
NiSource, Inc. 
    183       3,706  
Northeast Utilities
    115       4,045  
NSTAR
    68       3,127  
Oneok, Inc. 
    66       4,885  
Pepco Holdings, Inc. 
    147       2,886  
PG&E Corp. 
    259       10,886  
Pinnacle West Capital Corp. 
    71       3,165  
PPL Corp. 
    370       10,297  
SCANA Corp. 
    79       3,110  
Sempra Energy
    150       7,932  
TransAlta Corp. 
    138       2,946  
Wisconsin Energy Corp. 
    153       4,797  
Xcel Energy, Inc. 
    316       7,679  
                 
              123,640  
                 
TOTAL COMMON STOCKS
(Cost $3,860,184)
            4,299,000  
                 
 
SHORT TERM INVESTMENT: 0.1%
                 
MONEY MARKET FUND: 0.1%
               
                 
SSgA Prime Money Market Fund
               
(Cost $2,635)
    2,635       2,635  
                 
                 
TOTAL INVESTMENTS: 99.9%
(Cost $3,862,819)
            4,301,635  
                 
OTHER ASSETS & LIABILITIES: 0.1%
            5,510  
                 
                 
NET ASSETS: 100.0%
          $ 4,307,145  
                 

(a) Non-income producing security.
(b) Limited Partnership
(c) REIT = Real Estate Investment Trust
   ADR — American Depositary Receipt

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


19


 

 
Pax MSCI EAFE ESG Index ETF

June 30, 2011 (Unaudited)

 
Schedule of Investments
 
                 
Security Description   Shares     Value  
   
 
COMMON STOCKS: 95.4%
 
Australia: 9.1%
Australia & New Zealand Banking Group, Ltd. 
    1,320     $ 31,147  
BlueScope Steel, Ltd. 
    2,476       3,200  
Commonwealth Bank of Australia
    781       43,810  
Fortescue Metals Group, Ltd. 
    606       4,127  
GPT Group (a)
    2,470       8,371  
Macarthur Coal, Ltd. 
    197       2,314  
Mirvac Group (a)
    5,926       7,945  
National Australia Bank, Ltd. 
    1,278       35,118  
Newcrest Mining, Ltd. 
    433       17,513  
Origin Energy, Ltd. 
    583       9,873  
OZ Minerals, Ltd. 
    300       4,247  
Westpac Banking Corp. 
    1,522       36,338  
Woolworths, Ltd. 
    690       20,537  
                 
              224,540  
                 
Belgium: 2.1%
               
Colruyt SA
    756       37,823  
Delhaize Group
    196       14,694  
                 
              52,517  
                 
Denmark: 1.7%
               
Danske Bank A/S (b)
    496       9,186  
Novo Nordisk A/S (Class B)
    236       29,618  
Vestas Wind Systems A/S (b)
    168       3,903  
                 
              42,707  
                 
Finland: 1.2%
               
Nokia OYJ
    1,884       12,212  
Stora Enso OYJ (R Shares)
    606       6,358  
UPM-Kymmene OYJ
    548       10,021  
                 
              28,591  
                 
France: 7.5%
               
Carrefour SA (b)
    370       15,195  
CGG: Veritasv(b)
    242       8,914  
Compagnie de Saint-Gobain
    318       20,593  
Danone SA
    348       25,964  
France Telecom SA
    968       20,586  
L’Oreal SA
    184       23,897  
Renault SA
    70       4,150  
Schneider Electric SA
    150       25,059  
Societe BIC SA
    168       16,235  
Technip SA
    160       17,154  
Veolia Environnement SA
    293       8,264  
                 
              186,011  
                 
Germany: 5.9%
               
BASF SE
    498       48,797  
Bayerische Motoren Werke AG
    206       20,556  
Deutsche Boerse AG
    114       8,663  
Deutsche Post AG
    728       13,988  
HeidelbergCement AG
    19       1,213  
Hochtief AG
    92       7,685  
K+S AG
    160       12,297  
Metro AG
    144       8,727  
Volkswagen AG Preference Shares
    86       17,753  
Wacker Chemie AG
    34       7,351  
                 
              147,030  
                 
Greece: 0.5%
               
Coca Cola Hellenic Bottling Co. SA (b)
    434       11,656  
                 
 
Hong Kong: 0.7%
               
CLP Holdings, Ltd. 
    1,000       8,860  
Hong Kong Exchanges and Clearing, Ltd. 
    10       210  
Li & Fung, Ltd. 
    4,000       7,967  
                 
              17,037  
                 
Israel: 0.4%
Delek Group, Ltd. 
    10       2,238  
Israel Chemicals, Ltd. 
    540       8,572  
                 
              10,810  
                 
 
Italy: 1.7%
               
ENI SpA
    400       9,461  
Intesa Sanpaolo SpA
    6,014       16,012  
UniCredit SpA
    8,132       17,217  
                 
              42,690  
                 
Japan: 22.0%
Canon, Inc. 
    400       18,931  
Central Japan Railway Co. 
    2       15,701  
Chugai Pharmaceutical Co., Ltd. 
    600       9,808  
Denso Corp. 
    200       7,408  
East Japan Railway Co. 
    200       11,428  
FANUC Corp. 
    100       16,620  
Fuji Heavy Industries, Ltd. 
    2,000       15,452  
Fujitsu, Ltd. 
    4,000       22,756  
Hitachi Construction Machinery Co., Ltd. 
    400       8,914  
Honda Motor Co., Ltd. 
    800       30,657  
Isetan Mitsukoshi Holdings, Ltd. 
    400       3,900  
Kao Corp. 
    400       10,484  
KDDI Corp. 
    2       14,335  
Komatsu, Ltd. 
    800       24,813  
Konica Minolta Holdings, Inc. 
    2,000       16,620  
Kubota Corp. 
    2,000       17,614  
Mitsubishi Electric Corp. 
    2,000       23,104  
Mitsubishi UFJ Financial Group, Inc. 
    6,200       30,035  
Mitsubishi UFJ Lease & Finance Co., Ltd. 
    190       7,316  
Mitsui Fudosan Co., Ltd. 
    1,000       17,117  
Mizuho Financial Group, Inc. 
    10,400       17,052  
Nippon Steel Corp. 
    2,000       6,459  
Nissan Motor Co., Ltd. 
    1,800       18,826  
Nomura Holdings, Inc. 
    2,200       10,822  
NTT DoCoMo, Inc. 
    10       17,763  
Panasonic Corp. 
    1,000       12,173  
Santen Pharmaceutical Co., Ltd. 
    400       16,198  
Shikoku Electric Power Co., Inc. 
    600       13,602  
Shin-Etsu Chemical Co., Ltd. 
    200       10,670  
Softbank Corp. 
    400       15,055  

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


20


 

 
Pax MSCI EAFE ESG Index ETF

June 30, 2011 (Unaudited)

 
Schedule of Investments, continued

                 
Security Description   Shares     Value  
   
 
COMMON STOCKS, continued
Japan, continued
Sony Corp. 
    600     $ 15,778  
Takashimaya Co., Ltd. 
    1,000       6,869  
Takeda Pharmaceutical Co., Ltd. 
    400       18,459  
The Chugoku Electric Power Co., Inc. 
    1,400       24,207  
TonenGeneral Sekiyu K.K
    1,000       12,273  
Ube Industries, Ltd. 
    2,000       5,987  
                 
              545,206  
                 
Luxembourg: 0.6%
               
Tenaris SA
    600       13,704  
                 
Netherlands: 2.2%
               
Akzo Nobel NV
    210       13,247  
ASML Holding NV
    254       9,356  
Unilever NV
    938       30,748  
                 
              53,351  
                 
New Zealand: 0.5%
               
Auckland International Airport, Ltd. 
    7,403       13,647  
                 
Norway: 1.2%
               
Aker Solutions ASA
    120       2,402  
Norsk Hydro ASA
    1,306       10,000  
Telenor ASA
    590       9,662  
Yara International ASA
    126       7,092  
                 
              29,156  
                 
Spain: 5.9%
Banco Santander SA
    4,236       48,915  
BBVA SA
    2,410       28,274  
Ferrovial SA
    688       8,696  
Iberdrola SA (b)
    2,364       21,039  
Industria de Diseno Textil SA
    198       18,043  
Repsol YPF SA
    620       21,524  
                 
              146,491  
                 
Sweden: 4.0%
               
Hennes & Mauritz AB (Class B)
    736       25,378  
Modern Times Group AB (Class B)
    104       6,868  
Nordea Bank AB
    2,102       22,598  
Sandvik AB
    700       12,273  
Skandinaviska Enskilda Banken AB (Class A)
    1,020       8,337  
Swedbank AB (Class A)
    604       10,151  
Volvo AB (Class B)
    830       14,500  
                 
              100,105  
                 
Switzerland: 8.3%
               
Compagnie Financiere Richemont SA
    312       20,429  
Novartis AG
    988       60,520  
Roche Holding AG
    330       55,226  
Swiss Reinsurrance Co., Ltd. (b)
    130       7,300  
Swisscom AG
    20       9,170  
Syngenta AG (b)
    58       19,578  
Wolseley PLC
    290       9,458  
Xstrata PLC
    1,050       23,112  
                 
              204,793  
                 
United Kingdom: 19.9%
Associated British Foods PLC
    684       11,889  
Barclays PLC
    3,077       12,665  
BG Group PLC
    1,796       40,758  
Bunzl PLC
    1,680       21,031  
Burberry Group PLC
    162       3,770  
Cairn Energy PLC (b)
    1,282       8,535  
GlaxoSmithKline PLC
    2,670       57,165  
HSBC Holdings PLC
    8,342       82,794  
Lonmin PLC
    220       5,130  
Pearson PLC
    1,731       32,671  
Prudential PLC
    1,713       19,795  
Royal Bank of Scotland Group PLC (b)
    9,738       6,011  
RSA Insurance Group PLC
    8,263       17,890  
Standard Chartered PLC
    1,248       32,809  
Tesco PLC
    4,702       30,337  
Tullow Oil PLC
    720       14,329  
Unilever PLC
    844       27,173  
Vodafone Group PLC
    25,988       68,946  
                 
              493,698  
                 
TOTAL COMMON STOCKS
(Cost $2,371,665)
            2,363,740  
                 
 
SHORT TERM INVESTMENT: 4.3%
                 
UNITED STATES: 4.3%
               
                 
MONEY MARKET FUND: 4.3%
               
                 
SSgA Prime Money Market Fund
               
(Cost $107,663)
    107,663       107,663  
                 
                 
TOTAL INVESTMENTS: 99.7%
(Cost $2,479,328)
            2,471,403  
                 
OTHER ASSETS AND LIABILITIES: 0.3%
            7,195  
                 
                 
NET ASSETS: 100.0%
          $ 2,478,598  
                 

(a) REIT = Real Estate Investment Trust
(b) Non-income producing security.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


21


 

 
Pax MSCI EAFE ESG Index ETF

June 30, 2011 (Unaudited)

 
Schedule of Investments, continued

 
Summary of Investments by Sector
 
               
          Percent of
Sector   Value     Net Assets
 
Consumer Discretionary
  $ 268,650       10.8%
Consumer Staples
    269,124       10.8%
Energy
    158,927       6.4%
Financials
    593,896       24.0%
Health Care
    246,993       10.0%
Industrials
    287,499       11.6%
Information Technology
    79,875       3.2%
Materials
    227,288       9.2%
Telecommunication Services
    155,516       6.3%
Utilities
    75,972       3.1%
Short Term Investments
    107,663       4.3%
Other Assets and Liabilities (Net)
    7,195       0.3%
               
Total Net Assets
  $ 2,478,598       100.0%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


22


 

 
Pax World Funds Trust II

June 30, 2011 (Unaudited)

Statements of Assets and Liabilities
 
                 
    Pax MSCI
       
    North
  Pax MSCI
   
    America ESG
  EAFE ESG
   
    Index ETF   Index ETF    
 
 
ASSETS
               
Investments, at value (Note B)
  $ 4,301,635   $ 2,471,403    
Cash
    31        
Receivable for investments sold
    3,228        
Receivable for foreign taxes recoverable
        2,423    
Dividends receivable (Note B)
    5,769     9,519    
                 
Total Assets
    4,310,663     2,483,345    
                 
                 
LIABILITIES                
Due to custodian
    47     3,636    
Payable for investments purchased
    2,011        
Accrued advisory fee (Note C)
    1,460     1,111    
                 
Total Liabilities
    3,518     4,747    
                 
NET ASSETS
  $ 4,307,145   $ 2,478,598    
                 
NET ASSETS CONSIST OF:
               
Paid in capital
  $ 3,885,589   $ 2,505,729    
Undistributed (distribution in excess of) net investment income
    2,770     666    
Accumulated net realized gain (loss) on:
               
Investments and foreign currency transactions
    (20,040)     (19,817)    
Net unrealized appreciation (depreciation) of:
               
Investments
    438,816     (7,925)    
Foreign currency
    10     (55)    
                 
NET ASSETS
  $ 4,307,145   $ 2,478,598    
                 
NET ASSET VALUE PER SHARE
               
Net asset value per share
  $ 28.71   $ 24.79    
                 
Outstanding beneficial interest shares (unlimited amount authorized, $0.01 par value)
    150,000     100,000    
                 
COST OF INVESTMENTS:
               
Investments, at cost (Note B)
  $ 3,862,819   $ 2,479,328    
                 
Foreign currency, at cost
  $ (47)   $ (3,546)    
                 
 
 

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


23


 

 
Pax World Funds Trust II

For the Period Ended June 30, 2011 (Unaudited)

 
Statement of Operations
 
                 
    Pax MSCI
       
    North
  Pax MSCI
   
    America ESG
  EAFE ESG
   
    Index ETF   Index ETF*    
 
 
INVESTMENT INCOME
               
Dividend income
  $ 29,672   $ 53,039    
Foreign taxes withheld
    (585)     (4,562)    
                 
Total Investment Income
    29,087     48,477    
                 
EXPENSES
               
Advisory fee (Note C)
    7,390     5,823    
                 
Total Expenses
    7,390     5,823    
                 
Net Investment Income
    21,697     42,654    
                 
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
               
Net realized gain (loss) on:
               
Investments
    17,653     (19,975)    
Foreign currency transactions
    15     158    
Net change in unrealized appreciation (depreciation) on:
               
Investments
    139,536     (7,925)    
Foreign currency translation
    4     (55)    
                 
Net realized and unrealized gain (loss) on investments and foreign currency
    157,208     (27,797)    
                 
Net increase in net assets resulting from operations
  $ 178,905   $ 14,857    
                 
 
 
* Commencement of operations — January 27, 2011.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


24


 

 
Pax World Funds Trust II

Statement of Changes in Net Assets
 
                       
        Pax MSCI
   
        EAFE ESG
   
    Pax MSCI North America ESG Index ETF   Index ETF    
            For the
   
    Six Months
  For the
  Period
   
    Ended
  Period
  1/27/11*-
   
    6/30/11
  5/18/10*-
  6/30/11
   
    (Unaudited)   12/31/10   (Unaudited)    
 
 
INCREASE IN NET ASSETS FROM OPERATIONS:
                     
Net investment income
  $ 21,697   $ 26,729   $ 42,654    
Net realized gain (loss) on investments and foreign currency transactions
    17,668     (37,807)     (19,817)    
Net change in unrealized appreciation (depreciation) on investments and foreign currency translation
    139,540     299,286     (7,980)    
                       
Net increase in net assets resulting from operations
    178,905     288,208     14,857    
                       
Distributions to shareholders from:
                     
Net investment income
    (19,065)     (26,492)     (41,988)    
                       
Total distributions to shareholders
    (19,065)     (26,492)     (41,988)    
                       
From capital share transactions:
                     
Proceeds from sale of shares sold
    1,384,619     2,500,000     2,505,729    
Cost of shares redeemed
        (49,030)        
                       
Net increase (decrease) in net assets from capital share transactions
    1,384,619     2,450,970     2,505,729    
                       
Net increase in net assets during the period
    1,544,459     2,712,686     2,478,598    
Net assets at beginning of period
    2,762,686     50,000        
                       
Net assets end of period (1)
  $ 4,307,145   $ 2,762,686   $ 2,478,598    
                       
(1) Including undistributed net investment income
  $ 2,770   $ 138   $ 666    
                       
Shares of beneficial interest:
                     
Shares sold
    50,000     100,000     100,000    
Shares issued to shareholders from reinvestment of distributions
               
Shares redeemed
        (2,000)        
                       
Net increase (decrease) in shares outstanding
    50,000     98,000     100,000    
                       
 
 
* Commencement of operations

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


25


 

 
Pax World Funds Trust II

Financial Highlights
Selected data for a share outstanding throughout each period
 
                     
    Pax MSCI North America
     
    ESG Index ETF      
    Six Months
    For the
     
    Ended
    Period
     
    6/30/11
    5/18/10*-
     
    (Unaudited)     12/31/10      
 
 
Net asset value, beginning of period
  $ 27.63     $ 25.00      
                 
Income (loss) from investment operations:
                   
Net investment income (loss)1
    0.21       0.27      
Net realized and unrealized gain (loss)2
    1.00       2.62      
                 
Total from investment operations
    1.21       2.89      
                 
Distributions to shareholders from:
                   
Net investment income
    (0.13)       (0.26)      
                 
Total distributions
    (0.13)       (0.26)      
                 
Net asset value, end of period
  $ 28.71     $ 27.63      
                 
Total return3
    4.38 %     11.58 %    
Net assets, end of period (in 000’s)
  $ 4,307     $ 2,763      
Ratio of expenses to average net assets
    0.50 %4     0.50 %4    
Ratio of net investment income (loss) to average net assets
    1.47 %4     1.69 %4    
Portfolio turnover rate5
    9 %     30 %    
 
 
 
 
1 Based on average shares outstanding during the period.
2 Amounts shown in this caption for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period because of the timing of sales and repurchases of Fund shares in relation to fluctuating market values for the Fund.
3 Total return is calculated assuming a purchase of shares at net asset value on the first day of the period, reinvestment of all dividends and distributions at net asset value during the period, and a sale at net asset value on the last day of the period. Total return for periods of less than one year is not annualized. Broker commission charges are not included in this calculation.
4 Annualized.
5 Portfolio turnover rate excludes the value of securities received or delivered from in kind processing of creations or redemptions of the Fund’s capital shares.
 
* Commencement of operations

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


26


 

 
Pax World Funds Trust II

 
Financial Highlights — (continued)
Selected data for a share outstanding throughout each period
 
             
    Pax MSCI
     
    EAFE ESG
     
    Index ETF      
    For the
     
    Period
     
    1/27/11*-
     
    6/30/11
     
    (Unaudited)      
 
 
Net asset value, beginning of period
  $ 25.06      
           
Income (loss) from investment operations:
           
Net investment income (loss)1
    0.43      
Net realized and unrealized gain (loss)2
    (0.28)      
           
Total from investment operations
    0.15      
           
Distributions to shareholders from:
           
Net investment income
    (0.42)      
           
Total distributions
    (0.42)      
           
Net asset value, end of period
  $ 24.79      
           
Total return3
    0.66 %    
Net assets, end of period (in 000’s)
  $ 2,479      
Ratio of expenses to average net assets
    0.55 %4    
Ratio of net investment income (loss) to average net assets
    4.00 %4    
Portfolio turnover rate5
    11 %    
 
 
 
 
1 Based on average shares outstanding during the period.
2 Amounts shown in this caption for a share outstanding may not accord with the change in aggregate gains and losses in securities for the fiscal period because of the timing of sales and repurchases of Fund shares in relation to fluctuating market values for the Fund.
3 Total return is calculated assuming a purchase of shares at net asset value on the first day of the period, reinvestment of all dividends and distributions at net asset value during the period, and a sale at net asset value on the last day of the period. Total return for periods of less than one year is not annualized. Broker commission charges are not included in this calculation.
4 Annualized.
5 Portfolio turnover rate excludes the value of securities received or delivered from in kind processing of creations or redemptions of the Fund’s capital shares.
 
* Commencement of operations

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


27


 

 
Pax World Funds Trust II

June 30, 2011 (Unaudited)

Notes to the Financial Statements
 
NOTE A—Organization
 
Pax World Funds Trust II (the “Trust”), which is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), is an open-end management investment company organized under the laws of the Commonwealth of Massachusetts on February 7, 2008.
 
As of June 30, 2011, the Trust offered two portfolios which represent series of beneficial interest in the Trust: the Pax MSCI North America ESG Index ETF and Pax MSCI EAFE ESG Index ETF (each referred to as a “Fund” or collectively as the “Funds”). The Funds commenced operations on May 18, 2010 and January 27, 2011, respectively and first listed on NYSE Arca, Inc. on May 19, 2010 and January 28, 2011, respectively. Each Fund operates as a non-diversified investment company. The Funds’ investment objectives are to seek investment returns that closely correspond to the price and yield performance, before fees and expenses, of the MSCI North America ESG Index and the MSCI EAFE ESG Index, respectively.
 
NOTE B—Significant Accounting Policies
 
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements:
 
Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
 
Indemnifications and Guarantees Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this could involve future claims that may be made against the Trust that have not yet occurred. However, while the Trust has a relatively short operating history, the Trust nonetheless expects the risk of loss to be remote.
 
Security Valuation The Funds investments for which market quotations are readily available are valued at market value. Market values for various types of securities and other instruments are determined on the basis of closing prices or


28


 

 
Pax World Funds Trust II

June 30, 2011 (Unaudited)

 

last sales prices on an exchange or other market, or based on quotes or other market information obtained from quotation reporting systems, established market makers or pricing services. Short-term investments having a maturity of 60 days or less are generally valued at amortized cost, which approximates fair value.
 
If market quotations are not readily available (including in cases when available market quotations are deemed unreasonable), the Funds’ investments will be valued as determined in good faith pursuant to policies and procedures approved by the board of trustees (so called “fair value pricing”). Fair value pricing may require subjective determinations about the value of a security or other asset, and fair values used to determine each Fund’s net asset value per share (“NAV”) may differ from quoted or published prices, or from prices that are used by others, for the same investments. Also, the use of fair value pricing may not always result in adjustments to the prices of securities or other assets held by the Funds.
 
The Funds may determine that market quotations are not readily available due to events relating to a single issuer (e.g., corporate actions or announcements) or events relating to multiple issuers (e.g., governmental actions or natural disasters). The Funds may determine the fair value of investments based on information provided by pricing services and other third-party vendors, which may recommend fair value prices or adjustments with reference to other securities, indices or assets. In considering whether fair value pricing is required and in determining fair values, the Funds may, among other things, consider significant events (which may be considered to include changes in the value of U.S. securities or securities indices) that occur after the close of the relevant market and the usual time of valuation. Fair value pricing could result in a difference between the prices used to calculate the Funds’ NAVs and the prices used by the Funds’ benchmark indexes, which, in turn, could result in a difference between the Funds’ performance and the performance of the Funds’ benchmark indexes.
 
Non-U.S. markets can be significantly more volatile than domestic markets, causing the prices of some of the Fund’s investments to fluctuate significantly, rapidly and unpredictably. Non-U.S. securities may be less liquid than domestic securities; consequently, the Funds may at times be unable to sell non-U.S. securities at desirable times or prices. Other risks related to non-U.S. securities include delays in the settlement of transactions; less publicly available information about issuers; different reporting, accounting and auditing standards; the effect of political, social, diplomatic or economic events; seizure, expropriation or nationalization of the issuer or its assets; and the possible imposition


29


 

 
Pax World Funds Trust II

June 30, 2011 (Unaudited)

 
Notes to the Financial Statements, continued

of currency exchange controls. If a Fund invests substantially in securities of non-U.S. issuers tied economically to a particular country or geographic region, it will be subject to the risks associated with such country or geographic region to a greater extent than a fund that is more diversified across countries or geographic regions.
 
The Board of Trustees of the Trust has determined that, because shares of the Funds are purchased or redeemed principally by the delivery of securities in kind, rather than cash, the use of local market closing prices to determine the value of foreign securities, rather than fair values determined as of the New York Stock Exchange (“NYSE”) Close to give effect to intervening changes in one or more indexes, is unlikely to result in material dilution of the interests of the Funds’ shareholders. Therefore, and in order to minimize tracking error relative to the respective index (which is based on local market closing prices), the Funds generally intend to use local market closing prices to value foreign securities, and may determine in the future to value foreign securities using a different methodology.
 
Investments initially valued in currencies other than the U.S. dollar are converted to U.S. dollars using exchange rates obtained from pricing services. As a result, NAV of each Fund’s shares may be affected by changes in the value of currencies in relation to the U.S. dollar. The value of investments traded in markets outside the United States or denominated in currencies other than the U.S. dollar may be affected significantly on a day that the New York Stock Exchange is closed, and the NAV of each Fund’s shares may change on days when an investor is not able to purchase or redeem shares.
 
For purposes of calculating NAV, the Funds normally use pricing data for domestic equity securities received shortly after the NYSE Close and do not normally take into account trading, clearances or settlements that take place after the NYSE Close. Domestic fixed income and foreign securities are normally priced using data reflecting the earlier closing of the principal markets for those securities, subject to possible fair value adjustments. Information that becomes known to the Funds or their agents after NAV has been calculated on a particular day will not generally be used to retroactively adjust the price of a security or NAV determined earlier that day.
 
Fair value is defined as the price that the Funds would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. A three-tier hierarchy has been established to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that


30


 

 
Pax World Funds Trust II

June 30, 2011 (Unaudited)

 

market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.
 
  • Level 1 — quoted prices in active markets for identical investments
 
  • Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
 
  • Level 3 — significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments)
 
Equity securities, including restricted securities and options on equity securities, for which market quotations are readily available, valued at the last reported sale price or official closing price as reported by an independent pricing service, are generally categorized as Level 1 in the hierarchy. Debt securities are valued at evaluated prices received from independent pricing services and are generally categorized as Level 2 in the hierarchy. Investments in mutual funds are generally categorized as Level 1. Short-term securities with remaining maturities of sixty days or less, which are valued at amortized cost, are generally categorized as Level 2 in the hierarchy.
 
In addition to those noted above, investments that use Level 2 or Level 3 inputs may include, but are not limited to: (i) an unlisted security related to corporate actions; (ii) a restricted security (e.g., one that may not be publicly sold without registration under the Securities Act of 1933, as amended); (iii) a security whose trading has been suspended or which has been de-listed from its primary exchange; (iv) a security that is thinly traded; (v) a security in default or bankruptcy proceedings for which there is no current market quotation; (vi) a security affected by currency controls or restrictions; and (vii) a security affected by a significant event (e.g., an event that occurs after the close of the markets on which a security is traded but before the time at which the Funds’ net assets are computed and that may materially affect the value of the


31


 

 
Pax World Funds Trust II

June 30, 2011 (Unaudited)

 
Notes to the Financial Statements, continued

Funds’ investments). Examples of events that may be “significant events” are government actions, natural disasters, armed conflict, acts of terrorism, and significant market fluctuations. Utilization of inputs for such investments may result in transfers between Levels. The inputs or methodology used for valuation are not necessarily an indication of the risk associated with investing in those investments.
 
The following is a summary of the inputs used to value the Funds’ net assets as of June 30, 2011:
 
                                 
Pax MSCI North America
                       
ESG Index ETF   Level One     Level Two     Level Three     Total  
   
Common Stocks
  $ 4,299,000     $        —     $        —     $ 4,299,000  
Money Market Fund
    2,635                   2,635  
                                 
Total
  $ 4,301,635     $     $     $ 4,301,635  
 
 
 
                                 
Pax EAFE MSCI ESG
                       
Index ETF   Level One     Level Two     Level Three     Total  
   
Common Stocks
  $ 2,363,740     $        —     $        —     $ 2,363,740  
Money Market Fund
    107,663                   107,663  
                                 
Total
  $ 2,471,403     $     $     $ 2,471,403  
 
 
 
The Funds did not hold any Level 3 categorized securities during the period from December 31, 2010 through June 30, 2011.
 
Investment Transactions Investment transactions are recorded as of the date of purchase, sale or maturity. Net realized gains and losses from the sale or disposition of securities are determined on the identified cost basis, which is also used for federal income tax purposes. Corporate actions (including cash dividends) are recorded net of foreign tax withholdings.
 
Investment Income Dividend income is recorded on the ex-dividend date. Interest income is recorded on the accrual basis and includes accretion of discount and amortization of premiums, if any. The value of additional securities received as dividend payments is recorded as income and as an increase to the cost basis of such securities.
 
Distributions to Shareholders Distributions to shareholders are recorded by the Funds on the ex-dividend date. The Funds expect to pay dividends of net investment income and to make distributions of capital gains, if any, at least annually. Income and capital gains distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles.
 
Expenses The Funds are charged a unified management fee that includes all the costs and expenses of the Funds (other than taxes, charges of governmental


32


 

 
Pax World Funds Trust II

June 30, 2011 (Unaudited)

 

agencies, interest, brokerage commissions incurred in connection with portfolio transactions and extraordinary expenses), including accounting expenses, administrator, transfer agent and custodian fees, Fund legal fees and other expenses.
 
Federal Income Taxes The Funds intend to elect to be treated and qualify each year as regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). If each Fund so qualifies and satisfies certain distribution requirements, such Fund will ordinarily not be subject to federal income tax on its net investment income (which includes short-term capital gains) and net capital gains that it distributes to shareholders. The Funds expect to distribute all or substantially all of their income and gains to shareholders every year. Therefore, no Federal income or excise tax provision is required. The Funds are treated as separate entities for U.S. Federal income tax purposes.
 
Foreign Currency Transactions The accounting records of the Funds are maintained in U.S. dollars. In addition, purchases and sales of investment securities, dividend and interest income, and certain expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses occurring during the holding period of investment securities are a component of realized gain (loss) on investment transactions and unrealized appreciation (depreciation) on investments, respectively.
 
NOTE C—Investment Advisory Fee and Transactions with Affiliated and Other Parties
 
The Trust has entered into an Investment Advisory Contract (the “Agreement”) with Pax World Management LLC (the “Adviser”). Pursuant to the terms of the agreement, the Adviser, subject to the supervision of the Board of Trustees of the Trust, is responsible for managing the assets of each Fund in accordance with the Funds’ investment objectives, investment programs and policies.
 
Pursuant to the Agreement the Adviser has contracted to furnish the Funds continuously with an investment program, determining what investments to purchase, sell and exchange for the Funds and what assets to hold uninvested. The Adviser also has contracted to provide office space and certain management and administrative facilities for the Funds. Each Fund pays a unified


33


 

 
Pax World Funds Trust II

June 30, 2011 (Unaudited)

 
Notes to the Financial Statements, continued

management fee to the Adviser at the following annual rates (expressed as a percentage of the average daily net assets of such Fund):
 
         
    Annual Rate  
   
Pax MSCI North America ESG Index ETF
    0.50 %
Pax EAFE MSCI ESG Index ETF
    0.55 %
 
Out of the management fee, the Adviser pays all expenses of managing and operating the Funds, except taxes, charges of governmental agencies, interest, brokerage commissions incurred in connection with portfolio transactions and extraordinary expenses.
 
NOTE D—Investment Information
 
At June 30, 2011, the Funds had in-kind contributions and in-kind redemptions as follows:
 
                 
    Contributions     Redemptions  
   
Pax MSCI North America ESG Index ETF
  $ 1,379,537     $  
Pax EAFE MSCI ESG Index ETF
  $ 2,496,341     $  
 
At June 30, 2011, the Funds had purchases and sales of investment securities as follows:
 
                 
    Purchases     Sales  
   
Pax MSCI North America ESG Index ETF
  $ 266,317     $ 263,147  
Pax EAFE MSCI ESG Index ETF
  $ 169,555     $ 274,294  
 
At June 30, 2011, the identified cost of investments in securities owned by each Fund for federal income tax purposes was substantially the same as the cost for financial reporting purposes. Accordingly, gross unrealized appreciation and depreciation at June 30, 2011 were as follows:
 
                                 
          Gross
    Gross
    Net Unrealized
 
          Unrealized
    Unrealized
    Appreciation
 
    Identified Cost     Appreciation     Depreciation     (Depreciation)  
   
Pax MSCI North America ESG Index ETF
  $ 3,862,819     $ 496,215     $ 57,399     $ 438,816  
Pax EAFE MSCI ESG Index ETF
  $ 2,479,328     $ 107,281     $ 115,206     $ (7,925 )
 
At December 31, 2010, Pax MSCI North America ESG Index ETF had capital loss carryforwards which may be used to offset any net realized gains, expiring December 31, 2018 of $36,976.


34


 

 
Pax World Funds Trust II

June 30, 2011 (Unaudited)

 

 
The tax character of distributions paid during the periods ended June 30, 2011 and December 31, 2010 were as follows:
 
                                 
    Distributions Paid in 2011     Distributions Paid in 2010  
    Ordinary
    Long-term
    Ordinary
    Long-Term
 
    Income     Capital Gains     Income     Capital Gains  
   
Pax MSCI North America ESG Index ETF
  $ 19,065     $     $ 26,492     $  
Pax EAFE MSCI ESG Index ETF
  $ 41,988     $     $     $  
 
Tax Information The timing and characterization of certain income and capital gains distributions are determined annually in accordance with federal tax regulations, which may differ from GAAP. These differences primarily relate to investments in foreign denominated securities and real estate investment trusts. Additionally, timing differences may occur due to wash sale loss deferrals. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period, and may result in reclassification among certain capital accounts. For tax purposes, short-term capital gains are considered ordinary income.
 
Pax EAFE MSCI ESG Index ETF has yet to complete its first tax reporting period. Management has analyzed the Funds’ current tax positions which will be subject to examination by the Funds’ major tax jurisdictions. The Funds recognize interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. Management has concluded that, as of and during the period ended June 30, 2011, no provision for federal income tax is necessary and, therefore, the Funds did not have a liability for any unrecognized tax expenses.
 
NOTE E—Shareholder Transactions
 
The Funds issue and redeem shares only to Authorized Participants (typically broker-dealers) in exchange for delivery of a basket of assets (securities and/or cash), referred to as a Creation Unit, in aggregations of 50,000 shares. The Fund may impose a creation transaction fee and a redemption transaction fee to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units. The standard creation and redemption transaction fee of $1,000 for Pax MSCI North America ESG Index ETF and $1,800 for Pax EAFE MSCI ESG Index ETF is charged to each purchaser on the day such purchaser creates a Creation Unit. The fee is a single charge regardless of the number of Creation Units purchased by an investor on the same day. Similarly, the standard redemption transaction fee will be $1,000 and $1,800, respectively regardless of the number of Creation Units redeemed that day.


35


 

 
Pax World Funds Trust II

June 30, 2011 (Unaudited)

 
Notes to the Financial Statements, continued

Purchasers and redeemers of Creation Units for cash (when cash creations and redemptions are permitted) will also be subject to an additional variable charge of up to a maximum of four times the standard creation/redemption transaction fee to offset the transaction cost to the Fund of buying portfolio securities. In addition, purchasers and redeemers of Creation Units are responsible for payment of the costs of transferring securities to or from a Fund. From time to time, the Adviser may cover the cost of any transaction fees.
 
Retail investors may only buy and sell shares of the Fund on a national securities exchange (NYSE Arca) through a broker-dealer. Such transactions may be subject to customary brokerage commission charges. Shares can be bought and sold throughout trading day like other publicly-traded securities, trading at current market prices, which may be different from the Fund’s net asset value.
 
NOTE F—Approval of Investment Advisory Agreement Review Process
 
The Investment Company Act of 1940 (the “1940 Act”) requires that the Trustees request and evaluate, and that Pax World Management LLC (the “Adviser”) furnish, such information as may reasonably be necessary for the Trustees to evaluate the terms of the Trust’s investment advisory contract (the “Management Contract”). The Trustees who are not “interested persons” (as defined in Section 2(a)(19) of the 1940 Act) of the Trust (the “Independent Trustees”) met telephonically and in person in May and June of 2010 for the purpose of considering the Management Contract (the “contract review meetings”). In addition, the Trustees consider matters bearing on the Trust and its investment management and other arrangements at their regular meetings throughout the year, which will include reviews of investment results and performance data at each regular meeting and periodic presentations from the Adviser.
 
The Trustees met and discussed the Management Contract with representatives of the Adviser. The Independent Trustees were assisted in their evaluation of the Management Contract by independent legal counsel, from whom they received assistance and advice, including a written memorandum, regarding the legal standards applicable to the consideration of advisory arrangements and with whom they met separately from management. During the course of the contract review meetings, the Independent Trustees made various requests for additional information or explanations from management regarding information that had been provided, to which management responded either orally or in writing.


36


 

 
Pax World Funds Trust II

June 30, 2011 (Unaudited)

 

 
In their deliberations, the Trustees did not identify any particular information that was all-important or controlling. Some of the factors that figured particularly in Trustees’ deliberations are described below, although individual Trustees may have evaluated the information presented differently from one another, or given different weights to various factors in reaching their unanimous conclusion. The Trustees’ conclusions may be based, in part, on their consideration of these arrangements during the course of the year. The Trustees evaluated all information available to them on a fund-by-fund basis, and their determinations were made separately in respect of each fund. However, they also took into account the common interests of all the funds in their review.
 
Nature, Extent and Quality of Services In considering the Management Contract, the Trustees, including the Independent Trustees, evaluated the nature, extent and quality of the advisory services provided to the Trust by the Adviser. They considered the terms of the Management Contract and received and considered information provided by management that described, among other matters:
 
  •  the nature and scope of the advisory services provided to the Funds and information regarding the experience, qualifications and adequacy of the personnel providing those services,
 
  •  the investment program used by the Adviser to manage the Fund,
 
  •  possible conflicts of interest and fall-out benefits,
 
  •  brokerage practices,
 
  •  the compliance function of the Adviser,
 
  •  financial results, assets under management and other information relating to the financial resources of the Adviser, and
 
  •  information relating to portfolio manager compensation.
 
The Trustees considered, among other matters, the Adviser’s general oversight of the Trust. They also took into account, to the extent they deemed relevant in light of the Fund’s index-based investment approach, information concerning the investment philosophy and investment process used by the Adviser in managing the Fund as well as the Adviser’s in-house investment and social research capabilities. They also considered various investment resources available to the Adviser.
 
The Trustees considered, among other matters, that the Adviser provides the Trust with office space and personnel, and provides oversight and coordination of the Fund’s third-party service providers. These services include accounting,


37


 

 
Pax World Funds Trust II

June 30, 2011 (Unaudited)

 
Notes to the Financial Statements, continued

bookkeeping, tax, legal, audit, custody and transfer agency services, and preparation of prospectuses, shareholder reports and other regulatory filings. They also took into account the Adviser’s compliance and operational functions, as well as steps taken by the Adviser to enhance compliance and operational capabilities and the resources being devoted to each. The Trustees also took into account the fact that the fee paid to the Adviser is a unified fee that includes all of the costs and expenses of the Fund (other than taxes, charges of governmental agencies, interest, brokerage commissions incurred in connection with portfolio transactions and extraordinary expenses), including accounting expenses, administrator, transfer agent and custodian fees, Fund legal fees and other expenses.
 
The Trustees concluded, within the context of their overall conclusions regarding the Management Contract, that the scope of the services provided to the Fund by the Adviser under the Management Contract was consistent with the Fund’s operational requirements; that the Adviser has the capabilities, resources and personnel necessary to provide the advisory services currently required by the Fund; and that, overall, the nature, extent and quality of the services provided by the Adviser to the Trust were sufficient to warrant approval of the Management Contract.
 
Fund Performance Because the North America Sustainability Index ETF was launched on May 18, 2010, no performance data for the Fund was available at the contract review meetings.
 
Fees and Other Expenses The Trustees, including the Independent Trustees, considered the advisory fees paid by the Fund to the Adviser, as well as the Fund’s estimated total expense ratio. In connection with their review, the Trustees noted that the Adviser, at the time of the contract review meetings, did not have a significant institutional advisory business outside of the Fund and other investment companies, and considered the differences in the services provided and proposed to be provided to institutional clients and those provided to the Fund, as well as differences in the advisory fees charged and proposed to be charged to such clients and those charged to the Fund. The Trustees observed that the Fund’s advisory fees and total expenses appeared generally to be in line with those of other exchange-traded funds identified by the Adviser.
 
Based on this and other information, the Trustees concluded, within the context of their overall conclusions regarding the Management Contract, that the fees and expenses to be charged represented reasonable compensation to the Adviser in light of the services provided.


38


 

 
Pax World Funds Trust II

June 30, 2011 (Unaudited)

 

 
Costs of Services Provided and Profitability The Trustees recognized that the Adviser should, in the abstract, be entitled to earn a reasonable level of profit for the services provided to the Fund, and that it is difficult to make comparisons of profitability from investment company advisory contracts because comparative information is not generally available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions about cost allocations and the Adviser’s capital structure and cost of capital. The Trustees concluded that, particularly in light of the small size and relatively recent launch of the Fund, they were satisfied that the Adviser’s level of profitability from its relationship with the Trust was not excessive.
 
Possible Fall-Out Benefits The Trustees, including the Independent Trustees, considered information regarding the direct and indirect benefits to the Adviser from its relationships with the Trust, including reputational and other “fall out” benefits. During the course of the year, the Board of Trustees received presentations from the Adviser about its trading practices and brokerage arrangements, including its policies with respect to research provided in connection with trade execution for other investment companies advised by the Adviser (soft dollar arrangements), and the Trustees accepted the representation of the Adviser that it fulfills its fiduciary obligation of seeking best execution when engaging in portfolio transactions for the Fund. The Trustees considered the receipt of these benefits in light of the Adviser’s overall profitability, and concluded that such benefits were not excessive.
 
Possible Economies of Scale The Trustees, including the Independent Trustees, considered the extent to which the Adviser might realize economies of scale or other efficiencies in managing and supporting the Fund. They noted that as assets increase, certain fixed costs may be spread across a larger asset base, and it was noted that any economies of scale or other efficiencies might be realized (if at all) across a variety of products and services, including the Fund, and not only in respect of a single Fund.
 
The Trustees noted that, in light of the small size and relatively recent launch of the Fund, the Fund did not yet appear to have achieved significant economies of scale. The Trustees concluded that the Fund’s overall fee arrangements represent an appropriate sharing at the present time between Fund shareholders and the Adviser of any economies of scale or other efficiencies in the management of the Fund at current asset levels.
 
Conclusions Based on their evaluation of factors that they deemed to be material, including those factors described above, the Board of Trustees, including the Independent Trustees, unanimously concluded that the


39


 

 
Pax World Funds Trust II

June 30, 2011 (Unaudited)

 
Notes to the Financial Statements, continued

continuation of the Management Contract with respect to the Fund, was in the best interests of the Fund and should be approved.
 
NOTE G—Other
 
Subsequent Events Management has evaluated the possibility of subsequent events existing in the Trust’s financial statements, and has determined that there are no material events that would require disclosure in the Trust’s financial statements through this date.
 
Proxy Voting You may obtain a description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities, without charge, upon request by contacting the Fund at 888.729.3863 or on the SEC’s website at www.sec.gov. The information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12 month period ended June 30 is available without charge, upon request, by telephoning ESG Shares (toll-free) at 888.729.3863 or visiting ESG Shares website at www.esgshares.com and will be available without charge by visiting the SEC’s website at www.sec.gov.
 
Quarterly Portfolio Holdings Disclosure The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each Fund’s Form N-Qs are available on the SEC website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 800.SEC.0330. Information contained in the Fund’s Form N-Qs may also be obtained by visiting ESG Shares website at www.esgshares.com or telephoning ESG Shares (toll-free) at 888.729.3863.


40


 

Item 2. Code of Ethics.
     This disclosure is not required for the Semi-annual report filing.
Item 3. Audit Committee Financial Expert.
     This disclosure is not required for the Semi-annual report filing.
Item 4. Principal Accountant Fees and Services.
     This disclosure is not required for the Semi-annual report filing.
Item 5. Audit Committee of Listed Registrants.
     This disclosure is not applicable to the Registrant.
Item 6. Schedule of Investments.
     A complete series of schedules of investments are included as part of the Report to Shareholders filed under Item 1
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
     This disclosure is not applicable to the Registrant, as it is an open-end investment company.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
     This disclosure is not applicable to the Registrant, as it is an open-end investment company.
Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
     This disclosure is not applicable to the Registrant, as it is an open-end investment company.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Directors that have been implemented since the Registrant last provided disclosure in response to the requirements of this Item.
Item 11. Controls and Procedures.
     (a) It is the conclusion of the Registrant’s principal executive officer and principal financial officer (or persons performing similar functions), based on an evaluation of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) (the “Disclosure Controls”) as of a date within 90 days of the filing date of this report on Form N-CSR, that the design and operation of the Disclosure Controls are effective to reasonably ensure that information required to be disclosed by the Registrant in this report on Form N-CSR has been recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.
     (b) There has been no change in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940, as amended) that occurred during the second fiscal quarter of the period covered by this report on Form N-CSR that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 12. Exhibits.

 


 

         
(a)
  (1)   The registrant’s code of ethics pursuant to Item 2 of Form N-CSR is filed with the registrant’s annual Form N-CSR.
 
       
 
  (2)   Certifications of the principal executive officer and principal financial officer of the Registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are attached.
 
       
 
  (3)   Written solicitation to repurchase securities issued by closed-end companies: not applicable.
 
       
(b)   Certification of the principal executive officer and principal financial officer of the Registrant required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended.
SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pax World Funds Trust II
         
By (Signature and Title)
  /s/ Joseph F. Keefe
 
Joseph F. Keefe, President
   
 
       
Date August 24, 2011
       
     Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf by the Registrant and in the capacities and on the dates indicated.
         
By (Signature and Title)
  /s/ Joseph F. Keefe
 
Joseph F. Keefe, President (Principal Executive Officer)
   
 
       
Date August 24, 2011
       
 
       
By (Signature and Title)
  /s/ Alicia K. DuBois
 
Alicia K. DuBois, Treasurer (Principal Financial Officer)
   
Date August 24, 2011
       

6

EX-99.CERT 2 b87708a1exv99wcert.htm CERTIFICATIONS OF PEO AND PFO exv99wcert
CERTIFICATION
     I, Joseph F. Keefe, certify that:
     1. I have reviewed this report on Form N-CSRS of Pax World Funds Trust II;
     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
     4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
     a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
     d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
     5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
     a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
     b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
         
Date: August 24, 2011
  /s/ Joseph F. Keefe
 
Joseph F. Keefe, President (Principal Executive Officer)
   

 


 

CERTIFICATION
     I, Alicia K. DuBois, certify that:
     1. I have reviewed this report on Form N-CSRS of Pax World Funds Trust II;
     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
     4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
     a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
     d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
     5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
     a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
     b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
         
Date: August 24, 2011
  /s/ Alicia K. DuBois
 
Alicia K. DuBois, Treasurer (Principal Financial Officer)
   

 

EX-99.906CERT 3 b87708a1exv99w906cert.htm SECTION 906 CERTIFICATION exv99w906cert
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned officers of Pax World Funds Trust II (the “Registrant”), certify that:
1.   The Form N-CSRS of the Registrant for the period ended June 30, 2011 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
2.   The information contained in the Form N-CSRS of the Registrant for the period ended June 30, 2011 fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Date: August 24, 2011
     
/s/ Joseph F. Keefe
 
Joseph F. Keefe
   
President (Principal Executive Officer)
   
 
   
/s/ Alicia K. DuBois
 
Alicia K. DuBois
   
Treasurer (Principal Financial Officer)
   

 

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