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March 12, 2013

Pax World Adds TIAA-CREF to ESG Managers Portfolio
    by Robert Kropp

TIAA-CREF's fixed-income Social Choice Bond Fund, launched in September, will be included in the Moderate and Conservative portfolios of the series of asset allocation funds. -- Pax World Management and Morningstar Associates have added the Social Choice Bond Fund of Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF), the financial services organization and one of the nation's largest pension funds, to their ESG Managers Portfolios, a series of asset allocation funds launched in 2010.

The ESG Managers Portfolios consists of four asset allocation funds, ranging from conservative to aggressive growth. Pax World serves as the investment adviser to the funds, while Morningstar provides asset allocation, manager selection, portfolio construction, and monitoring services. TIAA-CREF's Social Choice Bond Fund, a sustainable fixed-income mutual fund, will be included in the Moderate and Conservative portfolios.

TIAA-CREF launched the Social Choice Bond Fund in September, stating at the time that "the fund targets 10 percent of fund investments to fixed-income securities considered to be 'proactive social investments'." The four thematic areas on which the proactive social investments focus include affordable housing, community and economic development, renewable energy and climate change, and natural resources.

"While this is a new fund, it draws upon TIAA-CREF's long-term track record investing in socially responsible fixed-income investments," Joe Keefe, President and CEO of Pax World, said. "TIAA-CREF is a good fit for ESG Managers Portfolios as they understand the value proposition underlying ESG issues and formally incorporate ESG criteria into their investment decisions regarding fixed income investments."

The group of subadvisers that TIAA-CREF has joined employs different investment strategies, but all of them account for environmental, social, and corporate governance (ESG) factors in their investment analyses. When the ESG Managers Portfolios was launched in 2010, Keefe said that over time such an approach should lead to "significant investment returns associated with the shift to a sustainable economy."

"The growth of sustainable investing will depend on our industry's ability to roll out innovative solutions for investment advisors and their clients," Keefe said at the launch.

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