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 40 years of investment experience to the Fund.
Fund Overview
YTD RETURN*
22.78%
NAV*
$18.38
INCEPTION
May 1, 2008
MINIMUM INVESTMENT
$2,500
CUSIP
70472Q609
BENCHMARK
MSCI ACWI ex. US SMALL CAP
NET EXPENSE RATIO(1)
1.42%
GROSS EXPENSE RATIO(2)
1.52%
*as of 7/30/2025
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.
Sumanta Biswas, CFA
Bin Xiao, CFA
Jason Crawshaw
Performance
| YTD As Of 7/30/2025 |
Quarterly As Of 6/30/2025 |
1 Year As Of 6/30/2025 |
3 Years As Of 6/30/2025 |
5 Years As Of 6/30/2025 |
10 Years As Of 6/30/2025 |
Since Inception As Of 6/30/2025 |
Total Gross Expense Ratio(1) | Total Net Expense Ratio(2) |
|---|---|---|---|---|---|---|---|---|
| 22.78% | 17.20% | 18.05% | 14.11% | 12.27% | 5.76% | 6.70% | 1.52% | 1.42% |
Calendar Year
| 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|---|---|---|
| -2.31% | 20.78% | -17.60% | 15.11% | 6.36% | 20.24% | -19.09% | 33.06% | 2.46% | -1.49% | 6.54% |
Portfolio
as of June 30, 2025
Top Ten Holdings
| Percentage Of Total Net Assets | 30.80% |
|---|---|
| D'Ieteren S.A. | 3.60% |
| Poongsan Corporation | 3.60% |
| EQB Inc. | 3.40% |
| Equatorial Energia S.A. | 3.30% |
| Sixt SE | 2.90% |
| Computacenter plc | 2.90% |
| Tecnoglass, Inc. | 2.90% |
| Kyudenko Corporation | 2.80% |
| Sopra Steria | 2.80% |
| TISCO Financial Group | 2.60% |
Sector Weightings
| Percentage Of Total Net Assets | 100.00% |
|---|---|
| Financials | 23.90% |
| Industrials | 22.70% |
| Consumer Discretionary | 15.90% |
| Information Technology | 10.30% |
| Materials | 9.20% |
| Utilities | 7.70% |
| Consumer Staples | 3.20% |
| Health Care | 2.10% |
| Energy | 1.30% |
| Communication Services | 1.10% |
| Real Estate | 0.30% |
| CASH + other assets (net) | 2.30% |
Top Ten Country Allocations
| Percentage Of Total Net Assets | 68.90% |
|---|---|
| Japan | 12.80% |
| France | 11.90% |
| United Kingdom | 11.80% |
| Canada | 5.90% |
| Norway | 5.10% |
| South Korea | 5.10% |
| Thailand | 5.10% |
| Germany | 4.20% |
| Belgium | 3.70% |
| Brazil | 3.30% |
Portfolio Characteristics
| Net Assets | $757,846,445 |
|---|---|
| Number Of Holdings | 57 |
| Percentage in Top 10 Holdings | 30.80% |
| Weighted Average Market Cap (Mil) | $4,017.99 |
| Annual Turnover | 13.00% |
Portfolio Allocation
| Percentage of Portfolio | 100.00% |
|---|---|
| Equity Securities | 97.70% |
| Cash and Other Assets (Net) | 2.30% |
Commentary
For the Quarter ended June 30, 2025
The Pear Tree Polaris Foreign Value Small Cap Fund’s Ordinary Shares (the “Fund”) outperformed its benchmark, the MSCI ACWI ex USA Small Cap Index (the “Index”). The Fund had a return of 17.20% at net asset value compared to 17.16% for the Index.
Market Conditions and Investment Strategies
At the top of the list were defense related stocks, as European countries increase their defense budgets on the backdrop of continued geopolitical turmoil. South Korea’s Poongsan Corp. was up more than 100% on the quarter, as the company announced strong earnings due to steady demand for ammunition. U.K.-based defense tech company QinetiQ Group had record order intake, with strong demand for its mission-critical solutions. The company also announced a five-year extension to the agreement with the U.K. Ministry of Defence, increasing total order backlog. Another Information Technology company, Sopra Steria Corp. announced underwhelming first quarter results, but guided for stronger results in the ensuing months. The company renewed six major contracts, while expediting its defense/security business in the face of European rearmament. Among other top contributors, D’Ieteren Group had an upbeat capital markets day, alluding to good projections in its auto glass and auto parts businesses. Glanbia PLC’s results were better than expected, maintaining guidance as growth in health & nutrition and dairy nutrition offset declines elsewhere in its portfolio.
Daicel Corp. and Thanachart Capital were the only detractors of note. Japan’s high-performance chemical company Daicel reported increased net sales, but declining profitability due to 1) yen appreciation 2) increased fixed costs to expand capacity in engineering plastics and 3) higher inventory costs. The company also encountered malfunctions at its CO plant as it sought to switch its fuel sources. Thailand-based financial holding company Thanachart has been impacted by a protracted postpandemic recovery in the country. Compounding the situation is weak global demand from key export partners (China/U.S.) and the proposed tariff hikes. Thanachart also owns subsidiaries engaged in the truck leasing business; recent tariff policies are
impacting the trucking industry globally.
Portfolio Changes
During the quarter, the Fund sold out of Greencore Group, Duni AB and flatexDEGIRO as each reached respective valuation targets, while Misto Holdings Corp. was exited due to deteriorating fundamentals. Sales proceeds were used to purchase two Indian banks, Karur Vysya Bank and Karnataka Bank, which are based in regions with solid economic growth. We believe concerns about asset quality in Indian financials are overblown – hence the attractive valuation; both banks are implementing good systems and tightening their underwriting. Zhongsheng Group Holdings was purchased at a steep discount due to macroeconomics in China. However, we expect auto dealer Zhongsheng to hold up well, as the company sells premium OEMs
(Toyota, Mercedes) with long runways and heavy customer loyalty, while also increasing its auto service business, which is a natural profit center.
Outlook
Tariff concerns, rising U.S. debt levels, and slower growth projections are pushing investors toward attractive options in Europe and emerging markets. Add in foreign exchange impact on the back of a weak USD, and international equities become even more appealing. International small caps appear especially well positioned, less vulnerable to tariffs and geopolitics while capitalizing on the onshoring/near-shoring trend.
Distributions
| Dividend | Short-Term Capital Gain | Long-Term Capital Gain | |
|---|---|---|---|
| 2024 | $0.3708 | $0.0000 | $0.0000 |
| 2023 | $0.3280 | $0.0000 | $0.0000 |
| 2022 | $0.5771 | $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.