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*
6.57%

NAV*
$16.71

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 5/24/2024

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 5/24/2024
Quarterly
As Of 3/31/2024
1 Year
As Of 3/31/2024
3 Years
As Of 3/31/2024
5 Years
As Of 3/31/2024
10 Years
As Of 3/31/2024
Since Inception As Of
3/31/2024
Total Gross Expense Ratio(1) Total Net Expense Ratio(2)
6.57% 1.79% 15.20% 2.03% 6.78% 5.06% 6.44% 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 March 31, 2024

Top Ten Holdings

Percentage Of Total Net Assets 27.00%
Vistry Group plc 3.00%
De'Longhi S.p.A. 2.90%
D'Ieteren S.A. 2.90%
Rubis 2.80%
Aalberts N.V. 2.80%
Hexpol AB 2.70%
Elis S.A. 2.60%
Glanbia plc 2.50%
Daicel Corporation 2.50%
Signify N.V., 2.30%

Sector Weightings

Percentage Of Total Net Assets 100.00%
Industrials 24.40%
Financials 21.50%
Consumer Discretionary 19.90%
Materials 8.10%
Information Technology 6.70%
Utilities 6.10%
Consumer Staples 4.40%
Energy 2.30%
Health Care 2.00%
Communication Services 1.00%
Real Estate 0.80%
CASH + other assets (net) 2.80%

Top Ten Country Allocations

Percentage Of Total Net Assets 70.40%
United Kingdom 17.20%
Japan 11.30%
France 10.00%
South Korea 6.00%
Netherlands 5.10%
Sweden 5.10%
Thailand 4.40%
Canada 4.20%
Norway 4.10%
Ireland 3.00%

Portfolio Characteristics

Net Assets $1,023,143,794
Number Of Holdings 66
Percentage in Top 10 Holdings 27.00%
Weighted Average Market Cap (Mil) $3,565.26
Annual Turnover 18.00%

Portfolio Allocation

Percentage of Portfolio 100.00%
Equity Securities 97.20%
Cash and Other Assets (Net) 2.80%

For the Quarter ended March 31, 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 1.72% at net asset value compared to 2.21% for the Index.

Market Conditions and Investment Strategies

The Fund outperformed in the majority of sectors, led by Consumer Discretionary, Utilities, Energy and Health Care. Gains were partially offset by lackluster returns in Information Technology, Communication Services and Financials. From a country perspective, the Fund outperformed in overweight France, United Kingdom, Ireland and Belgium, to name a few. Singapore, South Korea and Thailand dragged on performance, as did Equatorial Energia, the sole holding in Brazil.

Among Consumer Discretionary holdings, U.K.-based Vistry Group PLC continued its streak of strong performance, as the company exited private homebuilding in favor of housing partnerships with local governments. Following the business model switch, the company reported a strong outlook for deliveries. D’Ieteren Group, the Belgian auto distributor and vehicle glass repair business, posted strong results with a healthy free cash flow position.

Consumer Staples had barbell returns. Glanbia PLC announced strong full-year 2023 results, highlighting growth of its Optimum Nutrition brands. Orion Corp., a South Korean confectionary company, declined as investors questioned the synergies of a noncore $400 million acquisition of a pharmaceutical company. Lumpy returns could also define the Utilities sector, as Rubis stock jumped more than 40% on robust earnings and upbeat guidance. Investors lauded discussions about selling the remaining majority stake in Rubis’ terminals to private equity. At the other end of the spectrum was Equatorial Energia, which reported stable revenues and decent EPS, while alluding to a stable 2024 outlook. However, analysts downgraded the EPS estimates,
suggesting a decline in sentiment following the 2023 reporting season.

Semiconductor test solution provider, AEM Holdings, was the largest portfolio detractor for the quarter. AEM faced two headwinds: 1) a profit warning due to a $17-$25 million shortfall in its inventory and 2) a lack of strong catalysts, as its top customer chipmaker Intel provided guidance that fell short of expectations. In Financials, Ringkjoebing Landbobank and Mizuho Leasing Company both had returns in excess of 19% for the quarter; sector gains were eroded by OSB Group PLC and Tisco Financial.

Portfolio Changes

During the quarter, the Fund purchased Kingboard Laminates Holdings, an electronics manufacturer that specializes in the production of laminates (especially copper); and Krones AG, a market leader in the oligopolistic market for beverage filling equipment and warehouse automation. There were no complete sales.

Outlook

European markets rounded the corner with better inflation figures, while the U.S. continued its hot streak on the back of megacap tech stocks. Asian countries and select emerging markets also posted modestly positive returns, with a notable market re-rating in Japan as the country reevaluated its stance on deflation. China is showing early signs for recovery, weighed by deflation. Major central banks will continue to wrestle with the idea of rate cuts. In summary, markets remain mixed. On this backdrop, our research continues to identify any number of attractive investment prospects. In the coming quarters, we may replace a handful of portfolio holdings with new entrants based on better risk/return profiles.

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, 2024 for all funds except Pear Tree Polaris International Opportunities Fund whose net expense ratio will expire on September 30, 2024.

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.