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*
-3.36%

NAV*
$14.11

INCEPTION
January 29, 2019

MINIMUM INVESTMENT
$100,000

CUSIP
70472Q799

BENCHMARK
MSCI EM

NET EXPENSE RATIO(1)
1.00%

GROSS EXPENSE RATIO(2)
1.29%

 

*as of 11/29/2021

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 11/29/2021
Quarterly
As Of 09/30/2021
1 Year
As Of 09/30/2021
3 Years
As Of 09/30/2021
5 Years
As Of 09/30/2021
10 Years
As Of 09/30/2021
Since Inception As Of
09/30/2021
Total Gross Expense Ratio(1) Total Net Expense Ratio(2)
-3.36% -6.72% 17.23% N/A N/A N/A 17.07% 1.29% 1.00%

Calendar Year

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
32.29% 24.38% -16.73% 26.26% 5.88% -16.37% -0.74% -4.59% 21.82% -18.00% 19.76%

Portfolio

as of September 30, 2021

Top Ten Holdings

Percentage Of Total Net Assets 29.40%
Taiwan Semiconductor Manufacturing Co., Ltd. 8.20%
Samsung Electronics Company Limited 4.10%
Infosys Limited - SP 3.00%
Contemporary Amperex Technology Company, Ltd. 2.40%
Li Ning Company Limited 2.20%
Sberbank of Russia 2.10%
HDFC Bank Ltd. 2.00%
Bajaj Finserv Limited 1.80%
iShares Core MSCI Emerging Markets ETF 1.80%
Tencent Holdings Limited 1.80%

Sector Weightings

Percentage Of Total Net Assets 100.0%
Information Technology 30.30%
Financials 15.60%
Consumer Discretionary 13.10%
Industrials 10.40%
Health Care 8.60%
Materials 5.30%
Communication Services 5.10%
Energy 4.10%
Consumer Staples 3.90%
Utilites 1.20%
Mutual Funds* 1.80%
CASH + other assets (net) 0.60%

Top Ten Country Allocations

Percentage Of Total Net Assets 83.80%
China 21.20%
India 14.50%
Taiwan 14.30%
South Korea 12.90%
United States 5.40%
Mexico 4.30%
Russia 4.00%
Hong Kong 2.90%
Brazil 2.30%
Saudi Arabia 2.00%

Portfolio Characteristics

Net Assets $112,590,668
Number Of Holdings 121
Percentage in Top 10 Holdings 29.40%
Weighted Average Market Cap (Mil) $149,886.00
Annual Turnover 128.00%

Portfolio Allocation

Percentage of Portfolio 100.0%
Equity Securities 99.40%
Cash and Other Assets (Net) 0.60%

FOR THE QUARTER ENDED JUNE 30, 2021

The Pear Tree Axiom Emerging Markets World Equity Fund’s Ordinary Shares outperformed its benchmark, the MSCI EM Index (the “Index”). The Fund achieved a return of (6.83%) at net asset value compared to (7.97%) for the Index.

Market Conditions and Investment Strategies

The Fund outperformed this quarter despite global growth headwinds from the Covid-19 Delta variant, supply chain disruptions, and policy. Key global economic indicators continued to moderate this quarter. For example, the JPM Global PMI Composite has fallen every month since peaking in May at 58.6 and the most recent August data point of 52.6 indicates a more moderate pace of global recovery. The Emerging Market PMI, meanwhile, has slowed from 54.1 at the start of the year to 49.3 at the end of the third quarter. Leading the global slowdown, China’s local Caixin PMI Composite fell to 47.2 in August as China has been especially aggressive about reimposing a COVID lockdown in the face of Delta. In addition, President Xi’s policy turn towards more direct state control over the economy under the mantra of “common prosperity” resulted in a myriad of disruptive regulations. Recently, there have been signs of stabilization in China as policy has started easing in response to the slowdown. Moreover, COVID cases in China, Indonesia, India and Brazil are declining while mobility data is improving in key parts of the emerging market universe. While this includes countries that are important to the global supply chain, inflation remains elevated globally and it is still unclear how soon inflation will moderate once supply chain bottlenecks ease. Also providing support, the Delta-wave appears to have peaked and credit conditions continue to be favorable for equities.

The highest contributing sectors on a relative basis during the third quarter were Consumer Discretionary, Information Technology, led by top performing stock Mindtree, and Communication Services. Consumer Staples, Energy, and Health Care were the largest relative detractors for the quarter.

From a country perspective, China was the top contributor, due to strong performing stocks Alibaba and China Longyuan, followed by Brazil, led by WEG, and Argentina, driven by Globant. Taiwan, Korea, and South Africa were the top detracting countries during the quarter on a relative basis.

Portfolio Changes

The Fund reduced its exposure to the Communication Services sector during the period, trimming positions in China and South Korea. A continued escalation of the regulatory environment in China led to a reduction in allocation to internet stocks. In South Korea, lawmakers voiced concerns on market dominance for domestic internet firms, with concerns emerging that new regulations could be introduced. The Fund also decreased its allocation to the Materials sector during the period, trimming positions in which either the underlying company thesis had deteriorated, or underlying commodity data weakened. Capital was reallocated to areas exhibiting positive change, most notably the Health Care sector. The abovementioned reduction in positioning also allowed the Fund to add to its exposure in India. Positioning in India reflects a positive bias towards the IT consulting & services sub-sector. Additionally, the Fund exited travel-exposed Chinese Consumer Discretionary names which could be adversely impacted by a weakening outlook for a rebound in travel in China amidst a domestic COVID resurgence and associated travel curbs.

Outlook

While the recovery is continuing, year-on-year economic comparisons get more challenging, and we are also seeing some policy headwinds from proposed tax and interest rate hikes globally. Input prices, especially related to energy and logistics, also represent ongoing economic challenges. Notwithstanding the challenges, global growth seems likely to settle into a more moderate expansion supported by ongoing reopening and supply chain restocking absent additional major policy or health shocks. As growth moderates, value stocks which benefited from the cyclical tailwinds during the initial phase of reopening are likely to face renewed challenges.

Distributions

Dividend Short-Term Capital Gain Long-Term Capital Gain
2020 $0.3544 $0.0000 $0.0000
2019 $0.2522 $0.0000 $0.0000
2018 $0.1094 $0.0000 $0.0780

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 (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.

2. 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, 2022 for all funds and share classes except Pear Tree Essex Environmental Opportunities Fund. Fee waivers and/or expense reimbursement for Pear Tree Essex Environmental Opportunities Fund and its share classes are in effect through August 31, 2022.

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.