Pear Tree Essex Environmental Opportunities Fund

The PEAR TREE ESSEX ENVIRONMENTAL OPPORTUNITIES FUND operates at the nexus of environment and finance, investing in companies that enable greater natural resource and energy efficiency.

Investment Process

The Fund invests in companies the management team believes solve environmental and related social challenges, seeking to provide attractive financial and social impact returns. The Fund is fossil fuel free, investing in public equities will full alignment to the U.N. Sustainable Development Goals. Investments are made across nine environmental themes, providing clean technology diversification in companies with revenue and earnings growth greater than the broad equity market, in companies exhibiting effective capital allocation and strong profitability.

Buy and Sell Discipline

The Fund is concentrated, typically owning 35-45 equity holdings, in growth companies which provide solutions to the world's environmental challenges. Stock selection is based on rigorous fundamental company analysis and a valuation process that is informed by the portfolio management team’s thematic industry assessment. The Fund is generally lower turnover, with half from existing positions. Position sizes average 2-3%, and are diversified across themes, geographies and industries. Risk management and assessment is integral to portfolio construction, with position sizes determined by industry maturity, liquidity, individual security volatility and the management of price and profit expectations.

Portfolio Management

The Fund is managed by William Page and Robert Uek of Essex Investment Management, LLC. Essex is an independent, employee-owned firm with over a 40-year history of growth equity investing. Page and Uek have almost 60 years of combined institutional investment experience. The portfolio management team has been managing clean technology portfolios for over 16 years, with the first listed impact strategy in North America.

Fund Overview

YTD RETURN*
8.50%

NAV*
$14.42

INCEPTION
September 1, 2021

MINIMUM INVESTMENT
$1,000,000

CUSIP
70472Q716

BENCHMARK
MSCI WORLD

NET EXPENSE RATIO(1)
0.99%

GROSS EXPENSE RATIO(2)
2.30%

 

*as of 1/27/2023

Investment Professionals

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Sub-Advisor

Essex Investment Management Co., LLC

Essex Investment Management Company, LLC. follows an investment philosophy based on the early identification of growth, wherever growth exists.

Portfolio Managers

Robert Uek, CFA
William Page

Performance

YTD
As Of 1/27/2023
Quarterly
As Of 12/31/2022
1 Year
As Of 12/31/2022
3 Years
As Of 12/31/2022
5 Years
As Of 12/31/2022
10 Years
As Of 12/31/2022
Since Inception As Of
12/31/2022
Total Gross Expense Ratio(1) Total Net Expense Ratio(2)
8.50% 0.99% -27.69% 9.45% 6.85% N/A 7.04% 2.30% 0.99%

Calendar Year

2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
-27.69% 11.15% 63.14% 25.83% -15.60% N/A N/A N/A N/A N/A N/A

Portfolio

as of December 31, 2022

Top Ten Holdings

Percentage Of Total Net Assets 38.70%
Landis+Gyr Group AG 4.50%
Energy Recovery, Inc. 4.50%
Badger Meter, Inc. 4.30%
Infineon Technologies AG 3.80%
Cognex Corporation 3.80%
Enphase Energy, Inc. 3.70%
SMA Solar Technology AG 3.60%
Vestas Wind Systems A/S 3.60%
Hubbell Incorporated 3.50%
Watts Water Technologies, Inc. 3.40%

Sector Weightings

Percentage Of Total Net Assets 100.0%
Industrials 47.20%
Information Technology 34.30%
Materials 8.20%
Utilities 2.90%
Consumer Discretionary 1.90%
Consumer Staples 1.70%
Cash and Other Assets (Net) 3.80%

Top Ten Country Allocations

Percentage Of Total Net Assets 100.00%
United States 60.30%
Germany 7.50%
Denmark 6.50%
Israel 4.90%
Japan 4.80%
Ireland 4.50%
Switzerland 4.50%
Sweden 3.20%
Cash and Other Assets (Net) 3.80%

Portfolio Characteristics

Net Assets $67,321,315
Number Of Holdings 35
Percentage in Top 10 Holdings 38.70%
Weighted Average Market Cap (Mil) $14,589.50
Annual Turnover 9.00%

Portfolio Allocation

Percentage of Portfolio 100.0%
Equity Securities 96.20%
Cash and Other Assets (Net) 3.80%

For the Quarter ended December 31, 2022

The Pear Tree Essex Environmental Opportunities Fund’s Ordinary Shares (the “Fund”) underperformed its benchmark, MSCI World Index (the Index”). The Fund achieved a return of 0.93% at net asset value compared 9.89% for the Index.¹

Market Conditions and Investment Strategies

To say 2022 was a difficult year for the global capital markets would be an understatement. The fourth quarter of 2022 was off
to a better start, with positive returns for October and November. With December came selling pressure as the market focused
on macro factors versus corporate fundamentals, exacerbated by technical trading and tax loss selling. As we enter 2023, while
the global macro environment remains uncertain, we are constructive on our Essex Global Environmental Opportunities Strategy
(“GEOS”) investment objective as we happily close the proverbial books on 2022.

During the fourth quarter of 2022 ended December 31, GEOS, Strategy returned 1.18%, versus 9.89% for the MSCI World Index.
The Wilderhill Clean Energy Index² posted (19.99%) for the fourth quarter. For the year-to-date ended December 31, GEOS declined
(28.01%) versus (19.46%) for the MSCI Index and (46.22%) for the Wilderhill.

For fourth quarter 2022 transactions, we added a new position to the GEOS power technology theme, Stem in October. One of the
greatest challenges for our power grid as we move to more distributed energy technologies and renewable energy is dispatchable
storage. Stem’s energy storage technology helps stabilize the grid for utilities while mitigating the intermittency when renewables
are added to the mix as centralized coal-fired power is increasingly decommissioned. We forecast annual revenue growth in
excess of 25% for Stem over the next decade as this trend takes hold. We also added a new position to the GEOS renewable
energy theme, Vestas, the world leader in wind turbine manufacturing. Vestas is the most geographically diverse wind turbine
manufacturer, with 20% market share in an industry with 15% annualized growth. The wind turbine market has been depressed
the past several years, given razor thin margins which will change we believe as manufacturers operate with more capital and
pricing discipline as market demand accelerates due to the energy crisis and regulations. We added another wind power company,
TPI Composites, the global leader in wind blade technology. TPI has over 40% market share in wind blades, holding every
leading wind turbine manufacturer as customers. As the wind industry recovers, we believe TPI will benefit as global wind turbine
installations are expected to accelerate this year and as the company expands to the offshore wind market.

We added to our portfolio weight in silicon anode company Enovix, offering technology that improves lithium battery performance
and safety. We also increased portfolio weight in European power technology firm Landis+Gyr. Landis provides power optimization
solutions to electric utilities worldwide. Late in the quarter, we increased portfolio weights in both Vestas and TPI Composites.
SunOpta, the alternative milk company was trimmed in mid-October on very strong stock price performance. We sold Hannon
Armstrong, the environmental finance company given declining revenues and our concerns that rising interest rates could well
impair returns further. PSI Software, the utility services firm was sold due to declining growth. Amyris was also sold in November,
based on rapidly increasing operating expenses.

Attribution (Fourth Quarter 2022)

Top contributors:

SMA Solar Technology (S92 GR): (+54.8%) is in the GEOS power technology theme, providing solar power and battery inverters,
electric vehicle (EV) chargers, and software management systems for residential and commercial distributed energy systems. SMA
is based in Germany, and we believe is well positioned for the EU’s aggressive decade plus goals for solar systems.

Infineon Technologies AG (IFX GY): (+36.4%) is also in the GEOS power technology theme, providing semiconductor solutions for
several end markets, from industry to automotive and communication. Infineon solutions are in power applications such as solar
inverters, EVs and computer servers, enabling energy efficiency and high performance in harsh environments.

Landis+Gyr Group (LAND SW): (+28.4%) is also in the GEOS power technology theme, providing smart meters and power
optimization solutions to the residential market primarily, working with utilities across the globe. We believe Landis sales will be
driven by utility spend in North America to upgrade our antiquated electrical grid, global regulations, and the need for increased
management as more resources such as EV charging equipment are added to our grid.

Aspen Aerogels (ASPN): (+27.9%) has historically provided high performance insulation gel to the chemical industry, to optimize
pipeline and process temperatures. The company is amidst a transition, leveraging this legacy intellectual property to move to
the stationary storage and electric vehicle markets. Aspen technology enhances battery performance while limiting the effects of
battery fires, a key safety issue in the electrification transition.

PSI Software (PSAN GR): (+27.4%) is based in Berlin, providing network control and management systems for utilities and public
infrastructure. Our PSI position was sold during the quarter.

Underperformers:

Generac Holdings (GNRC): (-43.5%) is in the GEOS power technology theme, providing back-up power generation systems for
homeowners and commercial properties. Generac has acquired several companies over the past three years that should allow a
broadening of product offerings across its strong domestic distribution channel. Execution is now key and will be assessed in the
coming year.

Amyris (AMRS): (-43.4%) rests in the low carbon commerce theme, providing plant-based personal care products through a
proprietary synthetic biology platform. Amyris was sold during the quarter.

Livent (LTHM): (-35.2%) is in the GEOS efficient transportation theme, as it is a vertically integrated lithium supplier, the primary
and leading chemistry for high-density batteries for use in electric vehicles. We believe lithium batteries will be the primary
technology for stationary power storage also, for the next decade and beyond.

Stem (STEM): (-34.4%) resides in the GEOS power technology theme and was purchased during the quarter. Stem provides AI
driven clean energy solutions. In December, Stem announced a 10 MW energy storage project in Texas with REX storage holdings.

Enovix (ENVX): (-33.3%) is a GEOS power technology holding, designing and producing next generation lithium-ion batteries
with technology that can provide at least 25%, to more than a 100% improvement in energy output than traditional lithium-ion
technology. The key to the improved energy density is the use of silicon anodes which can store up to ten times more energy than
traditional graphite anodes, improving battery performance. We added to the ENVX position during the quarter.

Social Impact Management Update

The year 2022 was eventful for ESG investing. The SEC proposed two ESG-related rules, with one focusing on corporate climate
disclosures and the other seeking to enhance ESG disclosure transparency for ESG funds. It is still unclear how the climate-related
disclosure rule, which attracted thousands of comment letters, will address scope 3 emissions, but both are expected to be
finalized in 2023. ESG investing became a common topic in political discourse throughout the year as well. Republican lawmakers
and attorney generals pushed back against ESG integration by asset managers, framing ESG investing as sacrificing performance to
advance social goals. This led to several states, including Texas and Florida, proposing rules that restrict state pensions from doing
business with asset managers that integrate ESG factors or have associations with certain ESG organizations. On the other end of
the spectrum, Democrats challenged asset managers for not doing enough to push companies to reduce greenhouse gas emissions
and transition away from fossil fuels. Finally, the 27th Conference of the Parties, or COP27, was held in Egypt in November. COP27
was framed as the “implementation COP”, a reference to the Conference’s focus on ensuring countries work to achieve their
previously announced net-zero goals and climate financing commitments. While there were fewer headlines from COP27 compared
to COP26, we believe countries and stakeholders should focus on achieving their previously announced net-zero goals in 2023
using the cost-effective clean technologies available today.

We believe GEOS is well positioned despite the scrutiny of ESG investing in 2022. Our approach is intentional and clear: we
identify and invest in companies providing environmental solutions that positively impact society. Our thematic ESG approach is
differentiated compared to most ESG strategies available since we explicitly focus on solutions to environmental challenges and
do not use ESG ratings. Many other ESG strategies only integrate ESG factors, frequently using ESG ratings, to mitigate potential
risks, but fail to adequately consider the investment opportunities associated with the low carbon transition. We believe companies
providing environmental solutions will grow revenue and earnings faster than the market and view the low carbon transition as the
investment megatrend of our generation. To highlight our differentiated approach, we published several insights and white papers
throughout the year on various topics including managing portfolio climate risk, sustainable agriculture, and climate adaptation.

The GEOS team engaged with many portfolio companies on ESG issues throughout 2022. While we believe all companies in
our portfolio are well positioned to capitalize on environmental opportunities, strong management of internal ESG issues like
human capital management, diversity, and physical climate risk are important to maximize long-term financial performance.
Engagements provide an opportunity to convey our view of material ESG issues that companies should prioritize. In addition,
engagement dialogues facilitate opportunities to learn from companies about how they are managing ESG issues and improving
ESG performance. As we have often stated, there is no perfect company, and ESG progress is a long, intentional journey.

One example of a company we recently engaged with is Stem, a provider of AI powered energy storage solutions. As a relatively
new public company, Stem has not provided investors with standardized ESG disclosures on material ESG topics. Our dialogue
helped clarify internal progress on ESG topics, with highlights such as the company establishing an ESG Steering Committee and
hiring a new employee to lead ESG strategy on a day-to-day basis. We view these as important developments given the central role
strong governance plays in managing material ESG issues and we plan to track Stem’s progress in 2023.

Another company we engaged with in 2022 was Cognex, a manufacturer of machine vision systems. Similar to Stem, ESG
disclosures from Cognex were sparse and provided investors with limited information concerning how they were addressing ESG
issues. We encouraged Cognex to improve ESG disclosures and provided a list of recommended disclosure topics to include in
their initial ESG report. We also provided the company with several model ESG and sustainability reports to use as a guideline as
they developed their own report. Later in the year, Cognex published their inaugural sustainability report and included several of the topics requested by the GEOS team. While we view Cognex disclosing more ESG-related information as a positive step, strong
ESG performance is even more critical. We plan to continue monitoring Cognex to ensure their performance on key ESG issues
continues to progress over the coming years.

Outlook

As we look to 2023, one could easily get caught up in the consensus forecast that global economies are headed to recession,
the result of central bank engineering to slow inflation by raising interest rates. We know that liquidity has been squeezed rapidly
from financial systems – easy money is a thing of the past. What is not obsolete is the ability for differentiated companies to drive
growth – this is the case across market environments yet is dependent on several factors:

Commercial viability: We have often stated that we don’t invest in lab experiments. A company with commercial viability has
a differentiated technology or service which is experiencing adoption because it makes economic sense. The offering is scaling
because it saves resources – money, or inputs such as less energy, materials, water or labor. GEOS invests in clean technologies,
which we have described as “doing more with less”, enabling our economies to scale with fewer resources. If a company provides a
commercially viable technology, growth and profitability should result with strong financial discipline.

Discipline: We have emphasized the importance of financial discipline and look to a firm’s returns on investment. A company
which is struggling to scale may have to constantly find capital in the forms of loans or equity offerings which dilute shareholders.
Ineffective capital discipline could cause excessive cash “burn”, which, when coupled with a technology which is struggling to
scale commercially will cause an excessive debt burden and leverage. Effective discipline leads to optimal allocations of capital
– a balance between investing for growth, such as research and development, or hiring, versus capital retention for periods of
uncertainty, such as longer sales cycles. Discipline can take the form of capital and financial discipline, but also strong operational
governance – knowing how to bring a new offering to the right market is key and avoids expensive missteps. The clean tech arena
is littered with companies that have strong potential offerings yet may stumble when trying to scale manufacturing.

Catalysts: This is more than being in the right place at the right time. What is the market dynamic? What is the global, federal or
local regulatory environment? What are consumer or demographic trends?

We believe we are entering an exciting era for clean technology investment. As we reflect on the decade and beyond, we have
been focused on GEOS, we have experienced some companies that are not commercially viable, with some execution problems
exacerbated by a lack of catalysts and discipline. Our GEOS investment objective and process has been consistent. What we have
honed is using our experience to further focus on companies providing profitable growth across our nine GEOS themes. As the
market stares into 2023, we have never been more constructive and excited on the opportunities for clean tech. Our companies
are experiencing commercial viability – the offerings reflected by the GEOS holdings are taking share and growing because they
are solving problems from water to electrical grid quality. Currently more than ever, discipline matters. We believe strongly our
companies can execute in this competitive arena. And lastly, the catalysts for clean technology have never been stronger. We
believe the Inflation Reduction Act plan here in the U.S. or the energy-crisis induced RePower E.U. plan provide strong and longterm
incentives to enable the new energy economy.

¹The 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.                                            

²The priority of the Wilder-Hill Index is to define and track the Clean Energy sector: specifically, businesses that stand to benefit substantially from a societal transition toward use of cleaner energy, zero-CO2 renewables, and conservation. Stocks and sector weightings within the Wilder-Hill Index are based on their significance for clean energy, technological influence and relevance to preventing pollution in the first place. The Wilder-Hill Index emphasizes new solutions that make both ecological and economic sense and aim to stay the leaders in this field.

Disclosures:

This commentary is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. The opinions and analyses expressed in this commentary are based on Essex Investment Management LLC’s (“Essex”) research and professional experience and are expressed as of the date of its release. Certain information expressed represents an assessment at a specific point in time and is not intended to be a forecast or guarantee of future results, nor is it intended to speak to any future periods.  Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties.

Distributions

Dividend Short-Term Capital Gain Long-Term Capital Gain
2022 $0.0000 $0.0007 $0.0000
2021 $0.0000 $0.2301 $0.9761
2020 $0.0000 $0.1204 $0.1626

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, 2023.

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.