The instant invention provides a coating composition, a process of making a coating composition, a coated article, and a method of forming such articles.The coating composition according to the present invention comprises a dispersion comprising: (a) a core comprising a base polymer; (b) a shell at least partially surrounding said core, wherein said shell comprising a polar polymeric stabilizing agent; and (c) one or more hydrophobic particulate fillers embedded at least partially in said shell.The process for making a coating composition according to the present invention comprises the steps of: (1) selecting a base polymer; (2) selecting a polar polymeric stabilizing agent; (3) selecting one or more hydrophobic particulate fillers; (4) melt-blending said base polymer, said polar polymeric stabilizing agent, and said one or more hydrophobic particulate fillers; (4) contacting said melt-blended base polymer, polar polymeric stabilizing agent and one or more hydrophobic particulate fillers with water and optionally in the presence of a neutralizing agent; (5) thereby forming said dispersion comprising: (a) a core comprising said base polymer; (b) a shell at least partially surrounding said core, wherein said shell comprising said polar polymeric stabilizing agent; and (c) said one or more hydrophobic particulate fillers embedded at least partially in said shell.The coated article according to the present invention comprises: a substrate comprising cellulose base material; and a dispersion on at least one surface of said substrate, wherein said dispersion comprises: (a) a core comprising a base polymer; (b) a shell at least partially surrounding said core, wherein said shell comprising a polar polymeric stabilizing agent; and (c) one or more hydrophobic particulate fillers embedded at least partially in said shell.The method of making a coated article according to the present invention comprises the steps of: (1) providing a substrate comprising cellulose base material (2) providing a coating composition comprising a dispersion comprising: (a) a core comprising a base polymer; (b) a shell at least partially surrounding said core, wherein said shell comprising a polar polymeric stabilizing agent; and (c) one or more hydrophobic particulate fillers embedded at least partially in said shell; (3) applying said coating composition to at least one surface of said substrate; and (4) thereby making said coated article.