Pear Tree Axiom Emerging Markets World Equity Fund
The PEAR TREE AXIOM EMERGING MARKETS WORLD EQUITY FUND provides investors with the opportunity to participate in the growth potential of emerging market countries. Over 20 countries located in Europe, Latin America, Africa, the Middle East and Asia are classified as emerging markets.
Investment Process
The Fund, managed by Axiom Investors, uses a fundamental investment philosophy to select companies benefiting from a sustained period of dynamic earnings growth. The Fund concentrates its investments in companies domiciled in emerging market countries but also invests in select developed market companies achieving significant growth in emerging markets. The investment universe consists of a broad emerging market related opportunity set from which the Portfolio Managers select 100+ dynamic growth stocks by implementing Axiom's disciplined, repeatable investment process.
Buy and Sell Discipline
The Fund employs a fundamental, dynamic growth investment discipline to identify companies offering a combination of (1) under recognized improvements in the business's key operational drivers (2) sustainable underlying earnings growth providing durable investment performance tailwinds, and (3) an attractive valuation both enhancing the upside potential and moderating the investment risks. Companies are consistently evaluated using a database of fundamental information and a proprietary ratings framework to assess their risk/return profile. The Fund incorporates real time data daily to monitor the development of portfolio holdings, re-confirm security risk-return ratings and adjust portfolio positions proactively.
Portfolio Management
The Fund is managed by Lead Portfolio Manager and Axiom's Chief Investment Officer, Andrew Jacobson, CFA, and Co-Portfolio Managers, José Gerardo Morales, CFA, and Andrew Yoon, CFA. The portfolio management team has broad emerging markets expertise with an average industry experience of 25 years.
Fund Overview
YTD RETURN*
0.80%
NAV*
$18.86
INCEPTION
September 30, 1994
MINIMUM INVESTMENT
$2,500
CUSIP
70472Q880
BENCHMARK
MSCI EM
NET EXPENSE RATIO(1)
1.43%
GROSS EXPENSE RATIO(2)
1.65%
*as of 5/31/2023
Investment Professionals
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Sub-Advisor
Axiom Investors
Axiom Investors manages international, global, small cap, and emerging market equities on behalf of its global institutional clients.
Portfolio Managers
Andrew Jacobson, CFA
Jose Gerardo Morales, CFA
Andrew Yoon, CFA
Performance
| YTD As Of 5/31/2023 |
Quarterly As Of 3/31/2023 |
1 Year As Of 3/31/2023 |
3 Years As Of 3/31/2023 |
5 Years As Of 3/31/2023 |
10 Years As Of 3/31/2023 |
Since Inception As Of 3/31/2023 |
Total Gross Expense Ratio(1) | Total Net Expense Ratio(2) |
|---|---|---|---|---|---|---|---|---|
| 0.80% | 5.67% | -16.41% | 5.91% | -0.69% | 0.28% | 4.27% | 1.65% | 1.43% |
Calendar Year
| 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|---|---|---|
| -30.93% | -2.13% | 31.69% | 23.78% | -16.73% | 26.26% | 5.88% | -16.37% | -0.74% | -4.59% | 21.82% |
Portfolio
as of March 31, 2023
Top Ten Holdings
| Percentage Of Total Net Assets | 36.50% |
|---|---|
| Taiwan Semiconductor Manufacturing Co., Ltd. | 8.80% |
| Tencent Holdings Limited | 5.10% |
| Samsung Electronics Company Limited | 5.00% |
| Baidu, Inc. | 2.90% |
| Ping An Insurance Group H Share | 2.50% |
| Mercado Libre, Inc. | 2.50% |
| iShares Core MSCI Emerging Markets ETF | 2.50% |
| Trip.com Group Limited | 2.50% |
| HDFC Bank Ltd. | 2.40% |
| Alibaba Group Holding Ltd. | 2.30% |
Sector Weightings
| Percentage Of Total Net Assets | 100.0% |
|---|---|
| Information Technology | 23.20% |
| Financials | 18.70% |
| Consumer Discretionary | 16.90% |
| Communication Services | 9.60% |
| Consumer Staples | 8.30% |
| Industrials | 8.20% |
| Health Care | 5.30% |
| Real Estate | 2.30% |
| Materials | 2.20% |
| Energy | 1.80% |
| Mutual Funds* | 2.50% |
| CASH + other assets (net) | 1.00% |
Top Ten Country Allocations
| Percentage Of Total Net Assets | 83.40% |
|---|---|
| China | 26.80% |
| Taiwan | 13.00% |
| India | 10.50% |
| South Korea | 9.70% |
| Mexico | 5.80% |
| United States | 5.50% |
| Indonesia | 3.80% |
| Brazil | 3.00% |
| Thailand | 3.00% |
| Hong Kong | 2.30% |
Portfolio Characteristics
| Net Assets | $ |
|---|---|
| Number Of Holdings | 106 |
| Percentage in Top 10 Holdings | 36.50% |
| Weighted Average Market Cap (Mil) | $138,426.37 |
| Annual Turnover | 103.00% |
Portfolio Allocation
| Percentage of Portfolio | |
|---|---|
| Equity Securities | 99.00% |
| Cash and Other Assets (Net) | 1.00% |
Commentary
For the Quarter ended March 31, 2023
The Pear Tree Axiom Emerging Markets World Fund’s Ordinary Shares outperformed its benchmark, the MSCI EM Index (the “Index”). The Fund achieved a return of 5.67% at net asset value compared to 4.02% for the Index.
Market Conditions and Investment Strategies
Growth stock premiums have begun rebounding from last year’s sell-down as the outlook for developed market GDP growth
and inflation continues to moderate. The manager expects this trend to continue as central banks become more cautious and
data-dependent in their monetary policy decisions. The Fund’s stocks were resilient to the Financial sector turmoil this quarter
which resulted, in part, from the recent rapid expansion of the money supply and then the equally rapid rate hikes. The notable
acceleration in the adoption of AI and machine learning technologies, as well as the ongoing investment in automation in
response to persistent labor tightness, all suggest an important new wave of innovation and growth investment opportunities.
The best performing sectors on a relative basis during the first quarter were Consumer Discretionary, led by a Latin American
e-commerce company which is seeing earnings upside amid an improving competitive landscape in its key Brazilian market.
The Industrials sector contributed positively, largely due to the Fund’s exposure to Mexican airports. Communication Services
also contributed, due to strong performance from a Chinese internet search company. Financials, Energy, and Real Estate were
the largest relative detractors for the quarter. Mexico was a top relative contributing country this quarter, due to the Fund’s
overweight position and a strong performance from a retail bank. India was also a positive contributor led by the Fund’s
underweight position to underperforming sectors including Information Technology, Industrials and Utilities. The largest relative
detractor was Korea, followed by the United Kingdom and Saudi Arabia.
Portfolio Changes
From a sector perspective, the largest addition was to Information Technology. Within this sector, the most notable addition
was to the semiconductor industry, particularly semiconductor foundries, predicated on a favorable long-term secular growth
outlook driven by the growth in high-performance computing, coupled with an expected cyclical rebound in demand for consumer
electronics. The Fund increased its exposure to Taiwan. Much of this increase was due to the higher allocation to the Information
Technology sector mentioned above. The overweight stance in Mexico was also increased, particularly due to increased allocation
to positions that should directly benefit from companies seeking to regionally diversify their existing manufacturing footprint and
“near-shore” capacity closer to the United States.
Outlook
The manager continues to be optimistic on the outlook for emerging markets (EM) into 2023. EM GDP is anticipated to
accelerate to 3.9% in 2023 from 3.1% in 2022. The gap between emerging and developed growth, which compressed to under
one percentage point in 2021 and 2022, is expected to increase to 3.5% in 2023 - the widest gap in ten years – as EM growth
is expected to accelerate and developed market (DM) growth to decelerate. This magnitude of growth gap has historically been a
catalyst for EM outperformance. Other tailwinds for the EM asset class include near decade-low foreign ownership of EM equities,
lower inflationary pressure than DM, and one standard deviation cheap relative valuation vs. US markets.
Distributions
| Dividend | Short-Term Capital Gain | Long-Term Capital Gain | |
|---|---|---|---|
| 2022 | $0.0000 | $0.0000 | $0.0000 |
| 2021 | $0.3977 | $0.0000 | $1.9041 |
| 2020 | $0.2402 | $0.0000 | $0.0000 |
Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than performance data quoted. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than original cost.
Before investing, carefully consider the Fund's investment objectives, risks, charges and expenses. For this and other information obtain the Fund's prospectus or, if available, the Fund's summary prospectus by calling (800) 326-2151 or by clicking the Literature and Forms section of this website to view or download a prospectus or, if available, a summary prospectus. Please read the prospectus carefully before you invest or send money.
1, 3, 5, and 10Yr performance numbers quoted are average annual total returns. Performance numbers quoted under one year are cumulative.
Polaris Capital began subadvising the Pear Tree Small Cap Fund on January 1, 2015.
Axiom International Investors began subadvising the Pear Tree Axiom Emerging Markets World Equity Fund December 8, 2018.
The Pear Tree Essex Environment Opportunities Fund (the “Fund”) is the successor to the investment performance of the Essex Environmental Opportunities Fund (“Predecessor Fund”) as a result of the reorganization of the Predecessor Fund into the Environmental Opportunities Fund on September 1, 2021. Performance information shown prior to the close of business on August 31, 2021 is that of the Predecessor Fund’s for the Fund’s Ordinary Shares and Institutional Shares.
Expense Ratios Disclosure
1. Expense Ratio (Net)
Net Expense Ratio is the total annual operating expense from the class of shares of the funds stated as a percent of the fund's total net assets as disclosed in the fund’s most recent prospectus after any fee waiver and/or expense reimbursements that will reduce any fund operating expenses until July 31, 2023.
2. Expense Ratio (Gross)
The gross expense ratio is the total operating expense from the class of shares of the fund stated as a percent of the fund's total net assets as disclosed in the fund’s most recent prospectus before waivers or reimbursements.
Risk Disclosure
Pear Tree Polaris Foreign Value
Pear Tree Polaris Foreign Value Small Cap
Pear Tree Polaris International Opportunities
Pear Tree Polaris Small Cap
Pear Tree Axiom Emerging Markets World Equity
Pear Tree Essex Environmental Opportunities
Foreign and Emerging Market Risk. Foreign markets, particularly emerging markets, can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market. Emerging markets can be subject to greater social, economic, regulatory, and political uncertainties and can be extremely volatile.
Small Cap Investing. The value of securities of smaller, less well-known issuers can perform differently from the market as a whole and other types of stocks and can be more volatile than that of larger issuers.