Pear Tree Polaris International Opportunities Fund
The PEAR TREE POLARIS INTERNATIONAL OPPORTUNITIES 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 approximately 75 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 40,000 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*
1.61%
NAV*
$12.62
INCEPTION
January 30, 2019
MINIMUM INVESTMENT
$1,000,000
CUSIP
70472Q740
BENCHMARK
MSCI ACWI ex US
NET EXPENSE RATIO(1)
1.06%
GROSS EXPENSE RATIO(2)
1.38%
*as of 7/15/2024
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 7/15/2024 |
Quarterly As Of 6/30/2024 |
1 Year As Of 6/30/2024 |
3 Years As Of 6/30/2024 |
5 Years As Of 6/30/2024 |
10 Years As Of 6/30/2024 |
Since Inception As Of 6/30/2024 |
Total Gross Expense Ratio(1) | Total Net Expense Ratio(2) |
|---|---|---|---|---|---|---|---|---|
| 1.61% | -0.49% | 2.94% | -1.38% | 5.11% | N/A | 6.60% | 1.38% | 1.06% |
Calendar Year
| 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|---|---|---|
| 16.39% | -19.08% | 13.43% | 13.71% | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Portfolio
as of March 31, 2024
Top Ten Holdings
| Percentage Of Total Net Assets | 22.90% |
|---|---|
| D'Ieteren S.A. | 2.50% |
| Neurones S.A. | 2.50% |
| SOL S.p.A. | 2.40% |
| Sparebanken Vest | 2.40% |
| Midea Group Co., Ltd. | 2.30% |
| Cranswick plc | 2.30% |
| Reply S.p.A. | 2.20% |
| Computacenter plc | 2.10% |
| SpareBank Nord-Norge | 2.10% |
| Zhejiang Supor Co. | 2.10% |
Sector Weightings
| Percentage Of Total Net Assets | 100.00% |
|---|---|
| Consumer Discretionary | 26.30% |
| Financials | 24.50% |
| Information Technology | 20.60% |
| Industrials | 12.90% |
| Materials | 7.30% |
| Consumer Staples | 6.20% |
| Utilities | 1.40% |
| Cash and Other Assets (Net) | 0.80% |
Top Ten Country Allocations
| Percentage Of Total Net Assets | 72.10% |
|---|---|
| United Kingdom | 12.80% |
| Canada | 9.50% |
| Italy | 7.60% |
| China | 7.30% |
| Japan | 7.00% |
| Taiwan | 6.90% |
| France | 6.70% |
| Australia | 5.90% |
| Norway | 4.50% |
| Sweden | 3.90% |
Portfolio Characteristics
| Net Assets | $87,201,540 |
|---|---|
| Number Of Holdings | 76 |
| Percentage in Top 10 Holdings | 22.90% |
| Weighted Average Market Cap (Mil) | $23,578.90 |
| Annual Turnover | 57.00% |
Portfolio Allocation
| Percentage of Portfolio | 100.00% |
|---|---|
| Equity Securities | 99.20% |
| Cash and Other Assets (Net) | 80.00%% |
Commentary
For the Quarter ended March 31, 2024
The Pear Tree Polaris International Opportunities Fund’s Ordinary Shares (the “Fund”) underperformed its benchmark, the MSCI ACWI ex USA Index (the “Index”). The Fund had a return of (2.44%) at net asset value compared to 4.81% for the Index.
Market Conditions and Investment Strategies
Underperformance was mainly due to market cap concentration of the benchmark, which skews heavily to large-cap stocks (~80%). The MSCI ACWI-ex USA Index has been consumed by a few giant Health Care and Information Technology (IT) companies, driven almost entirely by multiple expansion, not earnings. In comparison, the Fund is more evenly balanced across the market cap spectrum, tailored more to the small- and mid-cap space. However, this diversification hurt performance for the quarter, as large-caps outperformed.
Benchmark-beating results in Consumer Staples and Materials couldn’t offset losses in overweight Financial and IT sectors. At the country level, the Fund outperformed in Belgium, Sweden, Hong Kong, Indonesia and a handful of other locales. Notable detractors were holdings in Taiwan, Canada, United Kingdom, Australia and Japan.
SOL SpA was the top contributor, as the Italian technical/medical gas company reported strong annual results, with higher revenues, net income and EPS. The company is capitalizing on a strong secular trend as demand increases due to population growth, health care needs, urbanization and emerging market exposure, while supply side is tight. Among Consumer Discretionary holdings, Chinese major appliance manufacturer Midea Group Co. announced strong growth and record profits in 2023, with overseas markets accounting for 40% of total sales. D’Ieteren Group, the Belgian auto distributor and vehicle glass repair business, posted strong results with a healthy free cash flow position. Japan’s Tri Chemical Laboratories gained ground in its core business, supplying consumables to the heated (on artificial intelligence) semiconductor manufacturing industry.
Collins Foods’ sales/volumes were resilient, but the stock fell on news of the CEO’s leave of absence due to a family member’s health issues. Investors also fretted over continued high inflation, concerned that consumers will cook at home rather than frequent fast-food establishments. Other underperformers were China Meidong Auto Holdings and Zhongsheng Group Holdings, both of which were weak on slack Chinese consumer demand. Also Holding AG, a distribution and logistics company, declined as German and Polish customers postponed investment due to the unstable geopolitical situation.
Portfolio Changes
During the quarter, the Fund added six new investments across myriad sectors. Among the new buys were: Kingboard Laminates Holdings, an electronics manufacturer that specializes in the production of laminates (especially copper); SIXT, the German car rental company expanding in the U.S.; Genuit Group PLC, which makes pipes for new construction; Pets At Home, a British pet supplies retailer with an integrated veterinary business; Krungthai Card PLC, a Thai-based credit and debit card service; and Oxford Instruments, a U.K. based company that manufactures high-tech products for research. There were no sales.
Outlook
While style differences versus the benchmark hampered results this quarter, we do expect small and mid-caps to prevail in the long term. Why? Many of these companies have better growth profiles and more attractive valuations than their large cap brethren. Our strategy remains consistent and focused, as we identify many good investment candidates that can round out our portfolio.
Distributions
| Dividend | Short-Term Capital Gain | Long-Term Capital Gain | |
|---|---|---|---|
| 12/14/2023 | $0.0200 | $0.0000 | $0.0000 |
| 10/24/2023 | $0.1379 | $0.0000 | $0.0000 |
| 2022 | $0.1952 | $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, 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.