Pax World Fund's Chris Brown Sees 'Mini Booms' During 2005 in Health Care Stocks, Tech, Mergers and BuybacksManager of Lipper-Ranked #9 Balanced Fund for 2004 Outlines His Views on Market (1) and Sees Weak Dollar as Boosting Large-Cap U.S. Firms With Big Overseas Roles PORTSMOUTH, N.H., Jan. 19 /PRNewswire/ -- How will the markets fare in 2005? Investors should look for surges during the new year in mergers, stock buybacks, dividend pay-outs, health care stocks and portions of the tech sector, according to Chris Brown, who, as manager of the Pax World Balanced Fund (PAXWX), is coming off a strong performance last year (2). PAXWX is America's first socially and environmentally responsible mutual fund. In outlining the key trends he expects to see in the new year, Brown highlighted nine publicly traded companies: Amgen (AMGN), Caremark (CMX), Checkpoint Software (CHKP), EMC Corporation (EMC), Guidant (GDT), Johnson & Johnson (JNJ), Microsoft (MSFT), Stryker (SYK), and Wellpoint (WLP). The Pax World Balanced Fund was the #9 balanced fund for the one-year period ending December 31, 2004, as tracked by Lipper Analytical Services for that period based upon total returns. Ranking in the top 2 percent of 576 such Lipper- tracked funds for calendar year 2004, the Pax World Balanced Fund posted an average annual total return of 13.39 percent for the one-year period ended December 31, 2004, well above the Lipper balanced fund index average annual total return of 7.93 percent for the same period. (1) Commenting on possible 2005 market trends, Chris Brown said: "We have a situation today where a number of major companies are sitting on a lot of cash, which is likely to increase activity associated with mergers, stock buybacks and dividend pay-outs. In addition to these possible 'mini booms' during 2005, I am going to be looking for a strong year for certain health care and tech stocks. While I think it is too much to hope for sector-wide upturns, I do see certain segments of the health care and tech worlds having a good year." WHAT TO WATCH IN 2005 Pax World Balanced Fund manager Chris Brown highlighted these possible trends for 2005: 1. Continuing weakness in the dollar may be a big plus for investors in U.S. large cap companies that have significant foreign exposures. Amgen and Stryker are two examples of companies that are poised to do well in this context. 2. Merger activity is likely to continue building as companies that need to make major market moves are able to do so with cash on hand. An example here already includes Johnson & Johnson/Guidant. This and other mergers may well be only the tip of the iceberg for what will emerge on the M&A front during 2005. 3. Rising cash balances at a number of large-cap growth companies may lead to stock buybacks and more dividend pay-outs. Microsoft's recent dividend pay-out and Check Point Software's recent stock buyback are two good examples of what investors should look for during 2005 on the buyback and dividend- payment fronts. 4. Pharmaceuticals without new drugs in the pipeline may have only mixed prospects at best, but HMOs focusing on lower-income individuals such as Wellpoint and personal benefit managers (PBMs) such as Caremark could flourish in 2005. 5. We don't expect a general tech boom. Instead, investors might anticipate a narrow recovery in certain key tech areas, such as high-volume data storage and enterprise storage. EMC is an example of a publicly traded company that could ride the crest of this wave. ABOUT CHRIS BROWN Christopher H. Brown is the vice president and portfolio manager of the Pax World Balanced Fund, the first socially responsible mutual fund in the U.S. He is a member of the Investment Committee of the Pax World Balanced Fund and of Pax World Capital Management, a separately managed account division. The Investment Committee oversees compliance issues concerning Pax World's investments. Brown also is a senior vice president with H.G. Wellington & Co., Inc., the Fund's advisor. Prior to joining Pax World, he was an investment consultant at Fahnestock & Co., a New York Stock Exchange brokerage firm, from 1987 to 1998, and a first vice president from 1994 to 1998. Brown is a graduate of the Boston University School of Management with a concentration in finance. ABOUT THE FUND Pax World Funds -- including Pax World Balanced Fund -- seeks to enable persons of conscience to invest in keeping with their ethical values and to challenge corporations to establish and meet certain ethical standards. The Funds seek to invest in companies that produce goods and services that improve the quality of life such as health care, technology, housing, food, education, pollution control, utilities, and leisure-time activities, and that are not engaged in the manufacture of defense or weapons-related products or that derive revenue from the manufacture of tobacco, liquor, or gambling products. EDITOR'S NOTE: A streaming audio replay of the Chris Brown media briefing will be available on the Web at http://www.paxworld.com as of 6 p.m. EST on January 19, 2005. (1) The Pax World Balanced Fund ended the December 31, 2004 one-year period as the #9 balanced fund tracked by Lipper for that period based upon total return, which put the Balanced Fund in the top 2 percent of 576 such funds. The Pax World Balanced Fund posted a total return of 13.39 percent for that period, well above the Lipper balanced fund index average of 7.93 percent for the same period. For the 5-year period ended December 31, 2004, the Pax World Balanced Fund came in at #127 out of 368 balanced funds tracked by Lipper for that period, with an average annual total return of 3.09 percent, compared to the Lipper index average annual total return of 2.01 percent for the same period. For the 10-year period ended December 31, 2004, the Pax World Balanced Fund came in at #13 out of 162 balanced funds tracked by Lipper for that period, with an average annual total return of 11.74 percent, compared to the Lipper index average annual total return of 9.09 percent. Over the past three-, five-, 10- and 20-year periods ended December 31, 2004, the Pax World Balanced Fund had average total returns of 6.62 percent, 3.09 percent, 11.74 percent and 11 percent, respectively. (2) Figures quoted represent past performance, which is no guarantee of future results. Investment return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than that quoted. For most recent month-end performance and other details, visit http://www.paxworld.com. You should consider a fund's investment objectives, risks, charges, and expenses carefully before investing. For this and other important information about the fund, please obtain a free fund prospectus by calling 1-800-767-1729 or visiting http://www.paxworld.com. Please read it carefully before investing. * As of December 31, 2004, the Pax World Balanced Fund holdings included the following: Amgen (1.76 percent); Johnson & Johnson (0.98 percent); Guidant, which is being acquired by Johnson & Johnson (0.98 percent); Microsoft (0.91 percent); Checkpoint Software (0.51 percent); Wellpoint (1.38 percent); Caremark (1.62 percent); and EMC Corp. (1.98 percent). This does not constitute a recommendation of these companies' financial attractiveness as an investment. Pax World Management Corp. 222 State Street Portsmouth, NH 03801 Distributor: H.G. Wellington & Co., Inc. January 2005