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*
12.52%
NAV*
$14.92
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 12/8/2023
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 12/8/2023 |
Quarterly As Of 9/30/2023 |
1 Year As Of 9/30/2023 |
3 Years As Of 9/30/2023 |
5 Years As Of 9/30/2023 |
10 Years As Of 9/30/2023 |
Since Inception As Of 9/30/2023 |
Total Gross Expense Ratio(1) | Total Net Expense Ratio(2) |
|---|---|---|---|---|---|---|---|---|
| 12.52% | -1.84% | 25.13% | 8.48% | 2.98% | 5.68% | 5.77% | 1.27% | 1.05% |
Calendar Year
| 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|---|---|---|
| -17.30% | 15.56% | 6.66% | 20.71% | -18.77% | 33.43% | 2.75% | -1.27% | 6.85% | 25.20% | 27.52% |
Portfolio
as of September 30, 2023
Top Ten Holdings
| Percentage Of Total Net Assets | 26.60% |
|---|---|
| Technip Energies N.V. | 3.30% |
| Equatorial Energia S.A. | 3.00% |
| Glanbia plc | 2.80% |
| Thanachart Capital PCL | 2.70% |
| Vistry Group plc | 2.70% |
| D'Ieteren S.A. | 2.50% |
| Hikma Pharmaceuticals plc | 2.50% |
| Inchcape plc | 2.40% |
| Elis S.A. | 2.40% |
| Daicel Corporation | 2.30% |
Sector Weightings
| Percentage Of Total Net Assets | 100.0% |
|---|---|
| Financials | 22.6 |
| Industrials | 17.6 |
| Consumer Discretionary | 16.2 |
| Information Technology | 8.6 |
| Materials | 7.1 |
| Consumer Staples | 7 |
| Utilities | 6.7 |
| Energy | 3.3 |
| Health Care | 2.5 |
| Communication Services | 1.5 |
| Real Estate | 1.2 |
| CASH + other assets (net) | 5.7 |
Top Ten Country Allocations
| Percentage Of Total Net Assets | |
|---|---|
| United Kingdom | 15.4 |
| Japan | 14.2 |
| France | 9.6 |
| Ireland | 5.5 |
| Thailand | 4.9 |
| Norway | 4.7 |
| Sweden | 4.6 |
| Taiwan | 3.8 |
| Canada | 3.5 |
| Denmark | 3.5 |
Portfolio Characteristics
| Net Assets | $953,857,709 |
|---|---|
| Number Of Holdings | 63 |
| Percentage in Top 10 Holdings | 26.60% |
| Weighted Average Market Cap (Mil) | $2,759.63 |
| Annual Turnover | 18.00% |
Portfolio Allocation
| Percentage of Portfolio | 100.0% |
|---|---|
| Equity Securities | 94.30% |
| Cash and Other Assets (Net) | 5.70% |
Commentary
For the Quarter ended September 30, 2023
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 (1.98%) at net asset value compared to (1.58%) for the Index.
Market Conditions and Investment Strategies
The Fund had absolute positive gains in Information Technology (IT), Communication Services, Energy and both Consumer sectors,
offset by losses in Industrials, Materials and Financials. At the country level, Taiwan, Japan, Ireland, Greece and China contributed
measurably; Colombia, Sweden, South Korea and Singapore detracted. Foreign exchange was the largest deterrent to portfolio
performance, as the U.S. dollar appreciated against almost all currencies to which the Fund has exposure.
U.K.-based Vistry Group PLC was the largest contributor to portfolio gains, as the company exited its private homebuilding
business in favor of a partnership model with local governments for social housing. This will result in surplus capital of which
Vistry is planning to release $1.2 billion to shareholders. In IT, Tripod Technology Corp. jumped as markets expect the company
to be an active participant in artificial intelligence. Computacenter PLC had notable half year results, with resilient demand and
market share gains. Multimedia company, Future PLC, released an optimistic trading statement about the stabilization of its
audience/customer base, while also announcing a buyback program. Technip SA, a leading engineering and tech company for the
energy industry, was up on new contracts in the liquified natural gas space; order books were solid and the company raised fullyear
guidance. Among other top 10 contributors were Kyundenko Corp., Glanbia PLC, Sanwa Holdings, and Prima Meat Packers.
Tecnoglass reported decent quarterly revenues and a healthy backlog, yet the stock was the largest detractor in the portfolio.
Investors were more concerned about forward projections, with higher interest rates potentially impinging on construction
demand, especially in Florida. Other Industrials posting lackluster results included Qinetiq Group PLC and Elis SA. Near-term
concerns over sluggish semiconductor capital spending dragged down ENF Technology, a major supplier of chemicals to the semi
industry. Another Materials holding, Hexpol AB, reported robust quarterly and half-year results, with steady sales and improving
margins; a healthy balance sheet supported its ongoing acquisitive growth strategy. Hexpol’s longtime CEO unexpectedly passed
away during the quarter; skittish investors sold down the stock. British financial services provider, OSB Group, booked a charge to
its income statement, as investors refinanced loans en-masse once teaser rates expired.
Portfolio Changes
During the quarter, the Fund sold out of Taiwan’s Elite Material Co. and Greek specialty retailer Jumbo SA on valuation, the
latter of which noted booming sales in its airport shops. Capital was reallocated to new purchases include Aalberts, a Dutch
engineering company with surface technologies for transportation, energy, construction and OEM industries; and Hikma
Pharmaceuticals, a British-based manufacturer of generic oral and injectables drugs with a worldwide sales platform.
Outlook
Expect some portfolio turnover in the coming quarters, as our bottom-up research has identified a number of high-quality
companies that tipped into value territory. Depressed stock prices are due to a global slowdown in demand, as interest rates
dampen consumer and company spending power. We intend to capitalize on market volatility, buying and selling opportunistically
to enhance the risk/return profile of the Fund.
Distributions
| Dividend | Short-Term Capital Gain | Long-Term Capital Gain | |
|---|---|---|---|
| 2022 | $0.6311 | $0.0000 | $0.0000 |
| 2021 | $0.2081 | $0.0000 | $0.1995 |
| 2020 | $0.5790 | $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 (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.
2. 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.
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.