Pear Tree Polaris Foreign Value Small Cap Fund
The PEAR TREE POLARIS FOREIGN VALUE SMALL CAP FUND provides investors with the opportunity to participate in the growth potential of small cap companies located in foreign countries. A small cap company will generally be a company with a market capitalization from $50 million to $5 billion.
Investment Process
The Fund will generally own 50 to 100 stocks of non-U.S. companies located in Europe, Australia and the Far East. In addition, the Fund may also invest in companies located 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 foreign markets, reduces the likelihood that negative 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 over 30,000 companies down to 400 to 600 for further consideration. 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 35 years of investment experience to the Fund.
Fund Overview
YTD RETURN*
-1.28%
NAV*
$15.48
INCEPTION
May 1, 2008
MINIMUM INVESTMENT
$1,000,000
CUSIP
70472Q500
BENCHMARK
MSCI ACWI ex. US SMALL CAP
NET EXPENSE RATIO(1)
1.05%
GROSS EXPENSE RATIO(2)
1.27%
*as of 11/20/2024
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.
Sumanta Biswas, CFA
Bin Xiao, CFA
Jason Crawshaw
Performance
| YTD As Of 11/20/2024 |
Quarterly As Of 9/30/2024 |
1 Year As Of 9/30/2024 |
3 Years As Of 9/30/2024 |
5 Years As Of 9/30/2024 |
10 Years As Of 9/30/2024 |
Since Inception As Of 9/30/2024 |
Total Gross Expense Ratio(1) | Total Net Expense Ratio(2) |
|---|---|---|---|---|---|---|---|---|
| -1.28% | 6.20% | 20.87% | 3.33% | 8.50% | 5.94% | 6.63% | 1.27% | 1.05% |
Calendar Year
| 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|---|---|---|
| 21.29% | -17.30% | 15.56% | 6.66% | 20.71% | -18.77% | 33.43% | 2.75% | -1.27% | 6.85% | 25.20% |
Portfolio
as of September 30, 2024
Top Ten Holdings
| Percentage Of Total Net Assets | 25.40% |
|---|---|
| Vistry Group plc | 2.90% |
| EQB Inc. | 2.70% |
| D'Ieteren S.A. | 2.70% |
| Inchcape plc | 2.60% |
| Tecnoglass, Inc. | 2.60% |
| Thanachart Capital PCL | 2.50% |
| Amundi | 2.40% |
| Elis S.A. | 2.40% |
| Aalberts N.V. | 2.30% |
| Daicel Corporation | 2.30% |
Sector Weightings
| Percentage Of Total Net Assets | 100.00% |
|---|---|
| Industrials | 24.20% |
| Financials | 23.30% |
| Consumer Discretionary | 18.40% |
| Materials | 7.40% |
| Utilities | 5.50% |
| Information Technology | 4.60% |
| Consumer Staples | 4.40% |
| Energy | 2.20% |
| Health Care | 2.00% |
| Communication Services | 1.70% |
| Real Estate | 1.00% |
| CASH + other assets (net) | 5.30% |
Top Ten Country Allocations
| Percentage Of Total Net Assets | 68.80% |
|---|---|
| United Kingdom | 17.30% |
| Japan | 11.40% |
| France | 9.00% |
| South Korea | 4.90% |
| Canada | 4.90% |
| Sweden | 4.90% |
| Thailand | 4.80% |
| Norway | 4.50% |
| Netherlands | 4.10% |
| Ireland | 3.00% |
Portfolio Characteristics
| Net Assets | $1,050,610,237 |
|---|---|
| Number Of Holdings | 63 |
| Percentage in Top 10 Holdings | 25.40% |
| Weighted Average Market Cap (Mil) | $3,518.29 |
| Annual Turnover | 21.00% |
Portfolio Allocation
| Percentage of Portfolio | 100.00% |
|---|---|
| Equity Securities | 94.70% |
| Cash and Other Assets (Net) | 5.30% |
Commentary
For the Quarter ended September 30, 2024
The Pear Tree Polaris Foreign Value Small Cap Fund’s Ordinary Shares (the “Fund”) underperformed its benchmark, the MSCI ACWI ex USA Small Cap Index (the “Index”). The Fund had a return of 6.14% at net asset value compared to 9.03% for the Index.
Market Conditions and Investment Strategies
Negative returns in Materials and Information Technology hampered results, as did underperformance in Utilities and Consumer Staples. The Fund outperformed in the Consumer Discretionary, Real Estate and Energy sectors, while Industrials and Financials added measurably.
From a country perspective, developed markets proved lackluster, with the Fund trailing in Japan, Netherlands, Denmark, Singapore and South Korea, the latter of which was attributable to a semiconductor industry slowdown on realistic AI expectations. Double-digit gains were captured in developing markets, including Thailand, Indonesia, Taiwan, China, Portugal and Colombia.
Consumer Staples was dragged down by Glanbia PLC, while Utilities had tempered, albeit positive, returns for all holdings with the exception of Rubis. ENF Technology and Hexpol hurt the Materials sector. ENF Technology, which produces electronic materials/chemicals for chips, fell in line with the overall semiconductor industry. Swedish polymer producer, Hexpol, reported underwhelming second quarter results, with the market worrying about weak end demand in auto, building and construction.
Tecnoglass Inc. was the top portfolio contributor and leader in the Industrial sector, up more than 35% on solid quarterly results, with record revenue in its residential, commercial and multifamily builds. Loomis AB, delivered robust organic sales growth while increasing margins. Conversely, Doosan Bobcat was the main sector detractor, after news of a merger with Doosan Robotics was met with derision from minority shareholders and Korean government regulators.
Among Consumer Discretionary stocks, U.K. housebuilder Vistry Group announced robust semi-annual results, while proffering an upbeat outlook for the housing sector on the back of Bank of England rate cuts. The U.K. government plan to increase home supply and reform the planning system was also encouraging. Japan’s Open House Group was equally ebullient about a housing market recovery, pointing to high sales of Tokyo condos, strong U.S. real estate business and an upturn in single-family home sales. Other sector gainers included Inchcape, Samson Holding, Coats Group and China Meidong Auto Holdings.
Nearly 40% of Financials holdings had gains in excess of 10% for the quarter, led by Thanachart Capital, Lancashire Holdings and Amundi SA. The Thai government kicked off its “digital wallet” stimulus to boost the local economy; Thanachart was a tangential beneficiary of this scheme. At the opposite end of the spectrum, goeasy declined after the resignation of its CEO, as investors pondered the company’s future.
Portfolio Changes
During the quarter, the Fund sold Keller Group at a tidy profit as it reached valuation limits; other sales included The Nature Holdings Co. and AEM Holdings. Fund holding Redrow PLC was acquired by fellow homebuilder Barratt Developments; we exited following the deal news. There were no new buys during the period.
Outlook
Real wages (adjusted for inflation) have risen in most countries, while interest rates are falling; this bodes well for consumer purchasing power. In such macro-economic environs, Consumer Discretionary stocks and other cyclicals often do well; the Fund is traditionally overweight in cyclicals and is thus poised to capitalize on this trend. Our research continues to identify any number of attractive investment opportunities (especially in Asian markets, and specifically China); we expect to add new names to the portfolio in the next few months.
Distributions
| Dividend | Short-Term Capital Gain | Long-Term Capital Gain | |
|---|---|---|---|
| 2023 | $0.3895 | $0.0000 | $0.0000 |
| 2022 | $0.6311 | $0.0000 | $0.0000 |
| 2021 | $0.2081 | $0.0000 | $0.1995 |
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.
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.