Dear Pax World Shareholder:
On September 27, 1996, shareholders of the Fund approved the sale of Pax
World Management Corp. to members of the Shadek family. Laurence A. Shadek, a
graduate of Franklin and Marshall College (BA) and New York University's
Graduate School of Business Administration (MBA), became a Director and Chairman
of the Board. The offices of the Fund continue to be located in Portsmouth, NH
where Anthony S. Brown (a co-founder of the Fund) continues as Treasurer and
Portfolio Manager. The transition in management is going smoothly. Plans
continue for the creation of a socially responsible growth fund.
Although stocks posted solid returns in 1996 in response to low inflation,
low unemployment, and good profit margins, these very same factors generated
inflation fears resulting in uncertainty in both the bond and equity markets.
The market experienced extreme volatility with some intra-day swings of over 100
Dow points. For example, on the last day of the year, the Dow Industrials lost
over 101 points. Your management, seeking to lessen the risk in the portfolio,
reallocated assets toward short-term government agency bonds. This move resulted
in reducing the portfolio risk to about sixty percent of the risk in the market.
On page two of this report, you will find an interview with Anthony S.
Brown, Portfolio Manager, who discusses your management's strategy for dealing
with the 1996 market and compares the Fund's total return with several market
indices. As a balanced fund, Pax World Fund practices value investing. The
Portfolio Manager seeks to invest in high quality companies with good
fundamentals, and whose shares are of good value when their prices become
depressed. An example would be Pfizer, Inc. where the gain has been 120%.
In an article entitled, "Best Mutual Funds for Your Money Now" that
appeared in the December 23, 1996 issue of Fortune Magazine, Pax World was
listed number two among balanced funds in the study. We must try harder. This
article took into account sales load, annual expenses, turnover, consistency of
management, and total return over the last three years. During that time period,
Pax World's yearly total return averaged 13.53%.
A balanced fund has several advantages for the investor seeking income,
long-term growth, and less risk than market risk as a whole. During times of
high market volatility, if you can leave your money invested over the long term,
you can avoid the results of the high volatility that may accompany the stock
market in the short term. Also, a balanced fund offers diversification in both
equities and bonds that helps to manage some of the market risk.
Whatever your investment horizon, it makes good sense to develop a regular
investment plan. You may do this by practicing dollar cost averaging, investing
a regular amount at the same time each month or each quarter. Pax World has made
this easy to do by creating the Fund's "Automatic Investment Plan." A free
packet explaining the "Plan" is available by calling the Fund at 1-800-767-1729.
You will find on pages two and three of this report information that gives
a quick overview of the Fund's performance, holdings, diversifications, and
allocation of assets. In the box on the back panel of this Annual Report you
will find the Fund's total return for the periods of 1, 5, 10, and 15 years
annualized and cumulative.
It is always a pleasure to welcome shareholders to the Fund's Annual
Meeting that will be held in Boston on June 12, 1997 at State Street Bank &
Trust Company, 225 Franklin Street. Plan now to attend.
Thank you for your continued support of socially responsible investing.
On behalf of the Directors,
Luther E. Tyson
President
January 10, 1997
QUESTIONS AND ANSWERS - ANTHONY S. BROWN, PORTFOLIO MANAGER
Q. What factors affected Pax World's performance during the past year?
A. The Fund under-performed the stock market during 1996 for the following
reasons:
A) We took a conservative stance and allocated 40% of the overall
portfolio to high grade, relatively short term Federal Government
Agency Bonds during the year to protect the shareholders against
possible downside risk in the market.
B) The stock market favored the "High Tech" sector of the market during
the year where the Fund portfolio is lacking because of high risk and
social criteria factors.
Q. How did Pax World's portfolio perform in 1996?
A. The Fund's portfolio finished the year with a total return to shareholders
of 10.36%.
Total Return for 1996
PAX WORLD FUND +10.36%
LIPPER BALANCED FUND INDEX +13.01%
STANDARD & POOR S 500 INDEX +22.98%
DOW JONES COMPOSITE INDEX +19.60%
NYSE COMPOSITE INDEX +19.10%
(The returns on the first three named items reflect reinvested dividends.
There are no reinvested figures for the last two items.)
Q. What has your investment strategy been during this period?
A. As the stock market continued to rise during this period, we continued to
lighten up on the equity side of the portfolio and transferred the proceeds
into 3 to 5 year maturity bonds. We felt the market was over priced and
still do, so we chose this method to protect the shareholders somewhat from
a market correction.
Q. What are some examples of stocks you purchased during the year?
A. New positions were taken in only one company during 1996: AirTouch
Communications, Inc. All other new positions were taken in various
Government Agency Bond issues.
SECURITY DIVERSIFICATION, 12/31/96
U.S. Government Agency Bonds: 41%
Natural Gas: 12%
Pharmaceuticals: 12%
Retail: 11%
Food: 9%
Other: 9%
Telecommunications: 6%
ASSET ALLOCATION, 12/31/96
Common Stocks: 57%
U.S. Government Agency Bonds: 41%
Cash & Receivables: 2%
TEN YEAR ANNUAL REVIEW
HISTORICAL
Pax World Fund, Inc. Lipper Balanced Fund Index
1986 $10,000 $10,000
1987 $10,258 $10,203
1988 $11,409 $10,989
1989 $13,901 $13,134
1990 $14,946 $13,065
1991 $17,026 $15,681
1992 $17,089 $16,393
1993 $16,984 $17,560
1994 $17,249 $17,340
1995 $20,168 $19,799
1996 $21,204 $21,100
*Pax World Fund, Inc.
10.36%1 year total return
7.82% 5 year avg. total return
10.76%10 year avg. total return
Lipper Balanced Fund Index
13.01% 1 year total return
10.84% 5 year avg. total return
11.10% 10 year avg. total return
* The cumulative total return (compounding reinvested dividends and capital
gains) of Pax World Fund over the past ten years was 177.77%. A $10,000
investment would have grown to $27,777.
The line graph on the above chart for Pax World Fund was adjusted to exclude the
result of cumulatively compounding earnings from dividends and capital gains.
The Lipper Balanced Fund Index also excludes compounding.
PORTFOLIO HIGHLIGHTS
One Year ended 12/31/96
TEN LARGEST STOCK HOLDINGS, 12/31/96
Percent of
Company Net Assets
Merck & Co., Inc. ..................... 5.4%
H.J. Heinz Co. ........................ 4.1%
Peoples Energy Corp. .................. 3.6%
Toys R Us Inc. ........................ 3.5%
Brooklyn Union Gas Co. ................ 3.4%
Bay State Gas Co. ..................... 3.0%
Gap Inc. ............................. 2.9%
NYNEX Corp. ........................... 2.8%
Wal-Mart Stores Inc.................... 2.7%
CPC International Inc. ................ 2.6%
TOTAL 34.0%
KEY STATISTICS, 12/31/96
12 Month Total Return.........................10.36%
Net Increase in Net Assets Resulting
from Operations........................$49.1 million
Total Net Assets......................$513.4 million
PAX WORLD FUND, INCORPORATED
SCHEDULE OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME OF ISSUER AND TITLE OF ISSUE SHARES VALUE NET ASSETS
COMMON STOCKS
<S> <C> <C> <C>
CONSUMER PRODUCTS
Colgate-Palmolive Co. ........................ 50,000 $ 4,612,500
Liz Claiborne, Inc. .......................... 190,000 7,338,750
-------------
11,951,250 2.3%
-------------
ELECTRIC UTILITY
Teco Energy, Inc.............................. 200,000 4,825,000 1.0
-------------
FOOD
CPC International, Inc. ...................... 175,000 13,562,500
General Mills, Inc. .......................... 200,000 12,675,000
H.J. Heinz Co. ............................... 600,000 21,450,000
-------------
47,687,500 9.3
HOME IMPROVEMENT PRODUCTS
Masco Corp.................................... 100,000 3,600,000 .7
-------------
LOANS - STUDENT
Student Loan Marketing Association........... 42,600 3,967,125 .8
-------------
MAILING EQUIPMENT...............................
Pitney Bowes, Inc. ........................... 166,700 9,085,150 1.8
-------------
NATURAL GAS
Bay State Gas Co. ............................ 553,800 15,644,850
Brooklyn Union Gas Co. ....................... 587,600 17,701,450
Enron Corp. .................................. 250,000 10,781,250
Peoples Energy Corp. ......................... 551,900 18,695,612
--------------
62,823,162 12.2
--------------
PACKAGING
Bemis Co., Inc................................ 50,000 1,843,750 .4
-------------
PHARMACEUTICALS
Bristol-Myers Squibb Co. ..................... 100,000 10,875,000
Johnson & Johnson ............................ 236,400 11,760,900
Merck & Co., Inc. ............................ 350,000 27,737,500
Pfizer, Inc. ................................. 118,900 9,853,838
-------------
60,227,238 11.7
-------------
RETAIL
Darden Restaurants, Inc. ..................... 592,400 5,183,500
Gap, Inc. .................................... 500,000 15,062,500
Home Depot, Inc. ............................. 150,000 7,518,750
Toys R Us, Inc................................ 600,000 18,000,000
Wal-Mart Stores, Inc.......................... 600,000 13,725,000
------------
59,489,750 11.6
------------
</TABLE>
PAX WORLD FUND, INCORPORATED
SCHEDULE OF INVESTMENTS, continued
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME OF ISSUER AND TITLE OF ISSUE SHARES VALUE NET ASSETS
<S> <C> <C> <C>
COMMON STOCKS, continued
TELECOMMUNICATIONS
AirTouch Communications, Inc. ................ 300,000 $ 7,575,000
BellSouth Corp. .............................. 100,000 4,037,500
NYNEX Corp. .................................. 300,000 14,437,500
U.S. West, Inc. - Communications Group........ 200,000 6,450,000
-------------
32,500,000 6.3%
------------- ------
TOTAL COMMON STOCKS ............................ 297,999,925 58.1%
------------- ------
PRINCIPAL
GOVERNMENT AGENCY BONDS AMOUNT
Federal Farm Credit Banks Consolidated
7.750%, due December 9, 1997 ................. $10,000,000 10,187,790
Federal Home Loan Bank System
5.660%, due November 9, 1998.................. 7,000,000 6,960,590
5.025%, due February 23, 1999................ 9,000,000 8,821,440
5.825%, due March 12, 1999.................... 10,000,000 9,935,900
5.880%, due March 19, 1999.................... 13,000,000 12,955,280
5.660%, due January 12, 2000.................. 5,000,000 4,921,850
Federal National Mortgage Association
7.600%, due January 10, 1997.................. 10,000,000 10,003,100
6.050%, due November 10, 1997................. 14,000,000 14,043,484
7.510%, due November 14, 1997................. 10,000,000 10,155,560
5.620%, due February 10, 1999................. 10,000,000 9,852,390
5.230%, due February 24, 1999................. 8,000,000 7,840,560
6.110%, due September 20, 2000................ 12,000,000 11,936,280
6.080%, due September 25, 2000................ 5,000,000 4,968,750
5.820%, due December 5, 2000.................. 15,000,000 14,756,250
6.340%, due December 20, 2000................. 8,000,000 7,928,720
5.370%, due February 7, 2001.................. 20,000,000 19,315,600
5.410%, due February 13, 2001................. 10,000,000 9,670,300
5.360%, due February 16, 2001................. 10,000,000 9,651,600
6.710%, due July 24, 2001..................... 7,000,000 7,090,790
7.040%, due September 24, 2001................ 11,000,000 11,084,260
International Bank for Reconstruction
& Development
5.875%, due July 16, 1997................... 10,000,000 10,015,600
--------------
TOTAL GOVERNMENT AGENCY BONDS 212,096,094 41.3%
-------------- -------
TOTAL INVESTMENTS ........................ 510,096,019 99.4
Cash and receivables, less liabilities......... 3,336,926 .6
-------------- -------
NET ASSETS............................... $513,432,945 100.0%
-------------- -------
See notes to financial statements.
</TABLE>
PAX WORLD FUND, INCORPORATED
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments, at value - note A
Common stocks (cost - $220,473,813) .............................. $297,999,925
Bonds (cost - $214,008,870) ...................................... 212,096,094
------------
510,096,019
Cash ............................................................... 4,468,131
Receivables
Dividends and interest ........................................... 4,605,618
------------
Total assets ................................................... 519,169,768
------------
LIABILITIES
Payables
Capital stock reacquired ......................................... 5,274,181
Accrued expenses
Investment advisory fee .......................................... 222,908
Transfer agent fee ............................................... 130,000
Other accrued expenses ........................................... 109,734
------------
Total liabilities .............................................. 5,736,823
------------
Net assets (equivalent to $16.56 per share based on
31,008,406 shares of capital stock outstanding) - note E .... $513,432,945
------------
Net asset value, offering price and redemption price per share
($513,432,945 / 31,008,406 shares outstanding) .............. $ 16.56
------------
</TABLE>
See notes to financial statements.
PAX WORLD FUND, INCORPORATED
STATEMENT OF OPERATIONS - Year Ended December 31, 1996
<TABLE>
<S> <C> <C>
Investment income
Income - note A
Dividends ................................................ $ 8,723,197
Interest.................................................. 11,735,322
----------
Total income ........................................... 20,458,519
Expenses
Investment advisory fee - note B ......................... $2,553,873
Transfer agent fee ....................................... 756,988
Distribution expenses - note D ........................... 502,260
Custodian fees - note F .................................. 142,038
Printing ................................................. 137,012
State taxes .............................................. 111,652
Legal fees and related expenses - note B.................. 57,832
Audit fees ............................................... 54,435
Directors fees and expenses - note B 48,784
Registration fees ........................................ 48,763
Other..................................................... 32,649
-----------
Total expenses ......................................... 4,446,286
Less: Fees paid indirectly - note F .................... 138,618
-----------
Net expenses ........................................ 4,307,668
------------
Investment income - net ................................ 16,150,851
-----------
Realized and unrealized gain on investments - note C
Net realized gain on investments ........................... 26,195,518
Change in unrealized appreciation of investments
for the year.............................................. 6,708,027
-----------
Net gain on investments ................................ 32,903,545
-----------
Net increase in net assets resulting from operations ... $49,054,396
-----------
See notes to financial statements.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended December 31
----------------------
1996 1995
----- -----
Increase in net assets...........................................
Operations
Investment income - net ...................................... $ 16,150,851 $ 14,647,876
Net realized gain on investments ............................. 26,195,518 11,853,476
Change in unrealized appreciation of investments 6,708,0278 83,655,967
------------ -----------
Net increase in net assets resulting from operations......... 49,054,396 110,157,319
Net equalization (debits) ....................................... (38,061) (143,513)
Distributions to shareholders from
Investment income - net ($.55 and $.79 per share,
respectively) - note A ........................................ (16,099,745) (22,242,270)
Net realized gain on investments
($.892 and $.14 per share, respectively) - note A (26,195,473).. (3,936,953)
Capital share transactions - note E ............................. 29,735,468 4,892,325
------------- -------------
Net increase in net assets.................................... 36,456,585 88,726,908
Net assets
Beginning of year .............................................. 476,976,360 388,249,452
------------- --------------
End of year (including undistributed investment
income - net of $332,132 and $319,087, respectively)........... $513,432,945 $476,976,360
------------ ------------
</TABLE>
See notes to financial statements.
PAX WORLD FUND, INCORPORATED
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE A - ACCOUNTING POLICIES
Pax World Fund, Incorporated (the "Fund") is a diversified, open-end
management investment company registered under the Investment Company Act of
1940, as amended. Significant accounting policies of the Fund are as follows:
Valuation of Investments: Securities listed on any national, regional or
local exchange are valued at the closing prices on such exchanges. Securities
listed on the NASDAQ national market system are valued using quotations obtained
from the market maker where the security is traded most extensively.
Federal Income Taxes: The Fund's policy is to comply with the requirements
of the Internal Revenue Code that are applicable to regulated investment
companies and to distribute substantially all its taxable income to its
shareholders. Therefore, no Federal income tax provision is required.
Equalization: The Fund uses the accounting practice known as
"equalization" by which a portion of the proceeds from sales and costs of
redemptions of capital shares, equivalent on a per share basis to the amount of
undistributed net investment income on the date of the transactions, is credited
or charged to undistributed income. As a result, undistributed net investment
income per share is unaffected by sales or redemptions of capital shares.
Equalization is a permanent book/tax difference that causes a difference
between investment income and distributions.
Distributions to Shareholders: All distributions to shareholders are
recorded by the Fund on the ex-dividend dates. In accordance with the Internal
Revenue Code and applicable Revenue Rulings, the amount of the 1995 distribution
which could be designated as a capital gain dividend ($11,855,124) was reduced
by $7,918,171, the amount of the 1994 capital loss carryover utilized in 1995.
The resulting distribution designated as a capital gain dividend was $3,936,953.
The 1995 distribution of net investment income, correspondingly, was increased
by $7,918,171.
Accounting Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles 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.
Other: The Fund follows industry practice and records security
transactions on the trade date. Dividend income is recognized on the ex-dividend
date, and interest income is recognized on an accrual basis.
NOTE B - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has an investment advisory agreement ("Agreement") with Pax World
Management Corp. ("Adviser") which provides for payment by the Fund of an annual
investment advisory fee of 3/4 of 1% of its average daily net assets on the
first $25,000,000 and 1/2 of 1% of its average daily net assets in excess of
that amount. Two officers, who are also directors of the Fund, are also officers
and directors of the Adviser. Another two officers of the Fund, who are not
directors of the Fund, are also officers of the Adviser. The Agreement provides
for an expense reimbursement from the Adviser if the Fund's total expenses,
exclusive of interest, brokerage commissions or fees, and taxes, but including
the investment advisory fee, exceeds 1-1/2% of the average daily net asset value
of the Fund for any full fiscal year. No expense reimbursement was required for
either 1996 or 1995.
All Directors are paid by the Fund for attendance at directors' meetings.
During 1996, the Fund incurred legal fees and related expenses of $57,832
with William M. Prifti, Esq., general counsel for the Fund. Mr. Prifti is
Secretary of the Fund.
All of the Adviser's capital stock is currently owned by four siblings
whose family has an ownership interest in a brokerage firm which the Fund
utilizes to execute security transactions. Brokerage commissions paid to this
firm during 1996 totalled $68,224 (18.6% of total 1996 commissions). Of this
amount, $22,630 was paid subsequent to the siblings' purchase of Adviser's
capital stock on September 27, 1996 (48.8% of total commissions paid during the
September 27, 1996 to December 31, 1996 period).
PAX WORLD FUND, INCORPORATED - NOTES TO FINANCIAL STATEMENTS, continued
NOTE C - INVESTMENTS
Purchases and proceeds from 1996 sales of investments, other than U.S.
Government agency bonds, aggregated $33,703,227 and $117,286,271, respectively.
Purchases and proceeds from 1996 sales and maturities of U.S. Government agency
bonds aggregated $141,778,479 and $52,000,000, respectively.
Net realized gain or loss on sales of investments is determined on the
basis of identified cost. If determined on an average cost basis, the net
realized gain for 1996 would have been approximately the same
For Federal income tax purposes, the identified cost of investments owned
at December 31, 1996 was $434,482,683.
NOTE D - DISTRIBUTION EXPENSES
The Fund maintains a distribution expense plan pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended. The plan provides that the
Fund may incur distribution expenses of up to twenty-five one hundredths of one
percent (.25%) per annum of its average daily net assets to finance activity
which is primarily intended to result in the sale of Fund shares. Such expenses
include (but are not limited to) travel and telephone expenses, preparation and
distribution of sales literature and advertising, and compensation to be paid to
and expenses to be incurred by officers, directors and/or employees of the Fund
or other third parties for their distributional services, if sales of the Fund
are made by such third parties during a fiscal year. The Board may terminate the
plan at any time with no penalty to the Fund. If the plan is terminated, the
payment of fees to third parties would be discontinued at that time.
NOTE E - CAPITAL AND RELATED TRANSACTIONS
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
---------- ----------
December 31, 1996 December 31, 1995
----------------- -----------------
Shares Dollars Shares Dollars
------ ------- ------ -------
<S> <C> <C> <C> <C>
Shares sold ................................... 3,151,719 $ 52,809,366 2,834,187 $ 42,166,166
Shares issued in reinvestment of dividends..... 2,360,551 39,060,319 1,512,585 24,008,199
------------ ------------- ----------- ------------
5,512,270 91,869,685 4,346,772 66,174,365
Shares redeemed............................... (3,704,015) (62,134,217) (4,146,698) (61,282,040)
----------- ------------ ----------- -----------
Net increase................................... 1,808,255 $ 29,735,468 200,074 $ 4,892,325
------------ ------------ ---------- -----------
</TABLE>
The components of net assets at December 31, 1996, are as follows:
<TABLE>
<S> <C>
Paid-in capital (75,000,000 shares of $1 par value authorized).......................... $445,407,251
Undistributed investment income......................................................... 332,132
Excess distribution of capital gains.................................................... (1,603)
Accumulated prior years net realized losses on investments............................. (7,918,171)
Net unrealized appreciation of investments.............................................. 75,613,336
-------------
Net assets.............................................................................. $513,432,945
------------
</TABLE>
NOTE F - CUSTODIAN BANK AND CUSTODIAN FEES
State Street Bank and Trust Company is the custodian bank for the Fund's
assets. The custodian fees charged by the bank are reduced, pursuant to an
expense offset arrangement, by an earnings credit which is based upon the
average cash balances mantained at the bank. If the Fund did not have such an
offset arrangement, it could have invested the amount of the offset in an
income-producing asset.
PAX WORLD FUND, INCORPORATED
FINANCIAL HIGHLIGHTS
The following per share data, ratios and supplemental data have been derived
from information provided in the financial statements and the Fund's underlying
financial records.
1. PER SHARE COMPONENTS OF THE NET CHANGE DURING THE YEAR IN NET ASSET VALUE
(BASED UPON AVERAGE NUMBER OF SHARES OUTSTANDING).
<TABLE>
<CAPTION>
Year Ended December 31
----------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year .... $16.33 $13.39 $13.55 $14.27 $14.99 $13.97 $13.98 $11.92 $11.58 $13.19
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Investment income - net. .550 .80 .49 .51 .64 .82 .60 .61 .61 .55
Realized and unrealized
gain (loss) on
investments - net.... 1.122 3.07 (.15) (.66) (.39) 2.17 .86 2.32 .71 (.15)
------ ------- -------- -------- -------- ------- ------- ------- ------- -------
Total from investment
operations .......... 1.672 3.87 .34 (.15) .25 2.99 1.46 2.93 1.32 .40
----- ------ -------- -------- -------- ------ ------- ------- ------- -------
Less distributions
Dividends from net
investment income..... .550 .79(A) .50 .50 .67 .77 .61 .62 .61 .75
Distributions from
realized gains ....... .892 .14(A) - .07 .13 1.04 .84 .25 .37 1.24
Tax return of capital.... - - - - .17 .16 .02 - - .02
-------- -------- --------- --------- -------- ------- ---------------- -------- -------
Total distributions...... 1.442 .93 .50 .57 .97 1.97 1.47 .87 .98 2.01
----- ------- -------- ------- -------- ------- ------- ------- ------ -------
Net asset value,
end of year ......... $ 16.56 $ 16.33 $ 13.39 $ 13.55 $ 14.27 $ 14.99 $13.97 $ 13.98 $ 11.92 $ 11.58
------- ------- ------- ------- ------- ------- ------ ------- ------- -------
2. TOTAL RETURN ......... 10.36% 29.19% 2.65% (1.05)% .6% 20.8% 10.5% 24.9% 11.5% 2.6%
3. RATIOS AND SUPPLEMENTAL DATA
Ratio of total expenses
to average net
assets (B) .......... .89% .97% .98% .94% 1.0% 1.2% 1.2% 1.1% 1.1% 1.1%
Ratio of investment
income - net to
average net assets... 3.24% 3.44% 3.66% 3.63% 3.7% 5.1% 5.4% 5.8% 5.0% 4.1%
Portfolio turnover rate 34.55% 28.44% 25.45% 22.15% 17.4% 25.7% 38.9% 37.4% 57.5% 123.9%
Average commission
rate paid (C)......... $ .0599 $ .0714
Net assets, end
of year (`000s)...... $513,433 $476,976 $388,249 $462,762 $469,275 $270,488 $119,831 $ 93,030 $ 73,650 $ 65,787
Number of capital
shares outstanding,
end of year (`000s)... 31,008 29,200 29,000 34,142 32,878 18,042 8,576 6,653 6,177 5,683
-------- -------- -------- -------- -------- ------------------------------------------------
</TABLE>
(A) Reference is made to note A to the financial statements.
(B) In order to conform to current disclosure requirements, the 1996 and 1995
ratios are based upon total expenses, including the gross amount of custodian
fees (before being reduced pursuant to an expense offset arrangement). The
ratios for prior years were based upon net expenses and are not required to be
restated.
(C) The 1996 and 1995 average commission rates are presented to conform to
current disclosure requirements. This disclosure was not required in prior years
and has not been computed for the prior years.
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
Pax World Fund, Incorporated
We have audited the statement of assets and liabilities of Pax World Fund,
Incorporated, including the schedule of investments, at December 31, 1996, and
the related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended and
financial highlights for each of the ten years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of Pax
World Fund, Incorporated at December 31, 1996, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and financial highlights for each of the ten years in the
period then ended, in conformity with generally accepted accounting principles.
Pannell Kerr Forster, P.C.
January 17, 1997
PAX WORLD FUND, INCORPORATED
222 State Street
Portsmouth, NH 03801-3853
1-800-767-1729
www.paxfund.com
A NO-LOAD DIVERSIFIED FUND
Transfer and Disbursing Agent
PFPC, Inc.
P.O. Box 8950
Wilmington, DE 19899
General Counsel
William M. Prifti, Esq.
220 Broadway
Suite 204
Lynnfield, MA 01940
Independent Auditors
Pannell Kerr Forster, P.C.
125 Summer Street
Boston, MA 02110
Investment Adviser
Pax World Management Corp.
222 State Street
Portsmouth, NH 03801-3853
1-800-767-1729
All account inquiries should be addressed to:
Pax World Fund, Inc.
P.O. Box 8930
Wilmington, DE 19899-8930
For Shareholder Account Information:
1-800-372-7827
PAX WORLD FUND, INC
TOTAL RETURN
Annualized Cumulative
1 Year 10.36% 10.36%
5 Years 7.82% 45.71%
10 Years 10.76% 177.77%
15 Years 12.67% 498.20%
ANNUAL
REPORT
DECEMBER 31, 1996
