Pear Tree Polaris Foreign Value Fund
The PEAR TREE POLARIS FOREIGN VALUE FUND provides investors with the opportunity to participate in the growth potential of companies predominantly located in developed foreign countries.
Investment Process
The Fund will generally own stocks of 50 to 125 non-U.S. companies located in the countries comprising the Morgan Stanley Europe, Australasia and Far East (EAFE) Index. In addition, the Fund may also invest a portion of its assets in emerging markets. The diversification within the Fund, coupled with the fact that the operation of the Fund’s investment model will generally lead the Fund to be invested in 15 or more countries, reduces the likelihood that performance of a single country will significantly impact the Fund’s return.
Buy and Sell Discipline
The investment process for the Fund combines both quantitative and fundamental techniques. The Fund’s approach is primarily “bottom up,” searching for individual stocks with strong, undervalued cash flows, regardless of location or industry. The Fund uses proprietary models to rank countries and industries on the basis of value and to narrow a universe of 40,000 companies down to 300 to 500 for further considerations. The Fund supplements the screening process by performing in-depth financial and fundamental analysis.
Portfolio Management
The Fund is managed by Polaris Capital Management, LLC, a Boston, Massachusetts money manager that specializes in the management of global, international, and domestic equity portfolios. Polaris brings over 40 years of investment experience to the Fund.
Fund Overview
YTD RETURN*
8.40%
NAV*
$24.40
INCEPTION
May 15, 1998
MINIMUM INVESTMENT
$2,500
CUSIP
70472Q708
BENCHMARK
MSCI EAFE
NET EXPENSE RATIO(1)
1.41%
GROSS EXPENSE RATIO(2)
1.51%
*as of 5/5/2025
Investment Professionals
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Sub-Advisor
Polaris Capital Management, LLC
Polaris is a leading global value equity manager, serving the investment needs of institutions and individuals since 1995. At Polaris Capital Management, we have a disciplined approach to investing in undervalued companies around the world, regardless of country, industry or market capitalization.
Portfolio Managers
Bernard R. Horn, Jr.
Bin Xiao, CFA
Jason Crawshaw
Performance
| YTD As Of 5/5/2025 |
Quarterly As Of 3/31/2025 |
1 Year As Of 3/31/2025 |
3 Years As Of 3/31/2025 |
5 Years As Of 3/31/2025 |
10 Years As Of 3/31/2025 |
Since Inception As Of 3/31/2025 |
Total Gross Expense Ratio(1) | Total Net Expense Ratio(2) |
|---|---|---|---|---|---|---|---|---|
| 8.40% | 5.33% | 1.27% | 3.29% | 11.59% | 3.79% | 5.74% | 1.51% | 1.41% |
Calendar Year
| 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.69% | 19.89% | -17.10% | 8.35% | 2.65% | 17.93% | -13.27% | 25.24% | 4.54% | -0.67% | -5.23% |
Portfolio
as of March 31, 2025
Top Ten Holdings
| Percentage Of Total Net Assets | 22.70% |
|---|---|
| DNB Bank ASA | 2.40% |
| Koninklijke Ahold Delhaize N.V. | 2.40% |
| United Overseas Bank Limited | 2.30% |
| Muenchener Rueckversicherungs-Gesellschaft | 2.30% |
| Next plc | 2.30% |
| Deutsche Telekom AG | 2.30% |
| Hannover Rueck SE | 2.20% |
| Takeda Pharmaceutical Company Limited | 2.20% |
| Vinci SA | 2.20% |
| Vipshop Holdings Limited | 2.10% |
Sector Weightings
| Percentage Of Total Net Assets | 100.00% |
|---|---|
| Financials | 20.80% |
| Consumer Discretionary | 18.10% |
| Industrials | 16.10% |
| Materials | 11.10% |
| Health Care | 8.20% |
| Communication Services | 6.80% |
| Consumer Staples | 6.00% |
| Information Technology | 5.60% |
| Energy | 4.10% |
| Cash and Other Assets (Net) | 3.20% |
Top Ten Country Allocations
| Percentage Of Total Net Assets | 81.20% |
|---|---|
| Japan | 13.30% |
| France | 12.30% |
| Germany | 9.80% |
| South Korea | 9.10% |
| United Kingdom | 8.90% |
| Canada | 8.00% |
| Norway | 6.90% |
| Ireland | 4.90% |
| Switzerland | 4.10% |
| Sweden | 3.90% |
Portfolio Characteristics
| Net Assets | $2,226,691,644 |
|---|---|
| Number Of Holdings | 62 |
| Percentage in Top 10 Holdings | 22.70% |
| Weighted Average Market Cap (Mil) | $47,307.51 |
| Annual Turnover | 21.00% |
Portfolio Allocation
| Percentage of Portfolio | 100.00% |
|---|---|
| Equity Securities | 96.80% |
| Cash and Other Assets (Net) | 3.20% |
Commentary
For the Quarter ended March 31, 2025
The Pear Tree Polaris Foreign Value Fund’s Ordinary Shares (the “Fund”) underperformed its benchmark, the MSCI EAFE Index (the “Index”). The Fund had a return of 5.33% at net asset value compared to 7.01% for the Index.
Market Conditions and Investment Strategies
Financials, Health Care and Industrials contributed most, followed by Index-beating results in Energy and Consumer Discretionary sectors. Materials was the only sector in absolute negative territory, as tariff concerns weighed heavily. Portfolio holdings in Germany, Norway, Sweden, Switzerland, China, Netherlands and Italy posted double-digit gains, while Canada and Ireland detracted on the back of underperforming materials companies.
Four of the top 10 overall portfolio contributors hailed from the Financials sector, led by Norwegian institutions, DNB Bank and Sparebank 1 Sor Norge. DNB’s stock price rose more than 30% after announcing solid quarterly earnings, healthy profit margins and an interest rate/currency hedging strategy. Sparebank 1 Sor Norge continued its stellar run, raising return-on-equity targets. Germany’s Hannover Re focused on expansion, seeking out new European underwriting opportunities. Fellow reinsurer Munich Re increased
profitability in global specialty insurance, while maintaining pricing and underwriting discipline in the property & casualty market despite loss events.
Among Industrials, outsized gains from Loomis AB and Vinci SA were tempered by losses at International Consolidated Airlines Group (IAG). Swedish cash handling company, Loomis, cited good organic growth and margins, coupled with strong free cash flow. Vinci SA rebounded from 2024 lows, as new management outlined global expansion, renewable energy integration, and tech advancements. IAG reported solid results, driven by favorable pricing in the North Atlantic region. However, travel stocks slid after Delta Airlines and
Southwest Airlines cut profit expectations on weakening travel demand.
In the Consumer Discretionary sector, Next PLC saw its share price rise due to strong financial performance, an upgraded 2026 profit forecast and online sales growth. China e-commerce site, Vipshop Holdings, had impressive fourth quarter earnings. Conversely, Canada’s Magna International fell on the threat of 25% tariffs on auto parts, potentially disrupting supply chains and increasing costs.
Barbell results defined the Communication Services sector, with Deutsche Telekom gaining more than 20%, driven by a solid earnings outlook, growth in its U.S. subsidiary T-Mobile, upside in B2B offerings, and resiliency in the local German market. By contrast, Publicis Groupe lost more than -10% even though the company had solid results and new business wins during the quarter.
Methanex Corp. dragged down the Materials sector results. The Canadian methanol producer addressed an unplanned outage in its Geismar 3 plant; downtime will impact second quarter results. Smurfit Westrock’s stock price trended down since releasing mixed fourth quarter 2024 results.
Portfolio Changes
We exited Swiss generic drug/biosimilars pharmaceutical company, Sandoz AG, as it reached valuation limits. There were no other sales for the quarter. We completed the purchase of International Consolidated Airlines Group, a well-managed, diversified airline with global leadership positions.
Outlook
At the end of the day, we expect tariffs and non-tariff trade barriers to be negotiated and renegotiated as bargaining chips in an increasingly interconnected world. We must remember that global trade stands at the forefront of prosperity for all economies – including the U.S. To the degree global trading relationships become more frictionless, and based on underlying comparative economic advantages, this could be very positive for a new era of economic growth.
Distributions
| Dividend | Short-Term Capital Gain | Long-Term Capital Gain | |
|---|---|---|---|
| 2024 | $0.4387 | $0.0000 | $0.0000 |
| 2023 | $0.4349 | $0.0000 | $0.0000 |
| 2022 | $0.2965 | $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.
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, 2025 for all funds except, Polaris International Opportunities Institutional and R6, Polaris Small Cap Institutional and R6 and Quality R6. For these fund classes the fee waiver and/or expense reimbursements that will reduce any fund operating expenses will be in effect until October 31, 2025.
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 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.