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*
-1.05%
NAV*
$12.29
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 7/26/2024
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 7/26/2024 |
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) |
|---|---|---|---|---|---|---|---|---|
| -1.05% | -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 June 30, 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 (0.58%) at net asset value compared to 1.17% for the Index.
Market Conditions and Investment Strategies
Outperformance in overweight sectors including Financials, Information Technology (IT) and Consumer Staples couldn’t offset losses in Consumer Discretionary, Industrials and Utilities. At a country level, the Fund captured double-digit gains in South Africa, Hong Kong, Switzerland and Finland, while the U.K., Norway and Singapore also outperformed the benchmark. China, Sweden, Japan and France detracted, the latter of which was impacted by geopolitical turmoil as three parties vied for power in recent elections.
Among Financials, goeasy Ltd. was up more than 20% after announcing strong quarterly results that beat estimates, pointing to loan growth. U.K. mortgage lender, OSB Group, posted a robust trading update, highlighting loan originations and retail deposits. Other double-digit sector performers included: First Rand Ltd, which reported strong underlying performance and higher net interest margins; and Muthoot Finance Ltd., which gained market share after a competitor was charged with illegal gold lending practices by the Central Bank of India.
In IT, Kingboard Laminates charged ahead as destocking dwindled and consumer electronics customers began placing orders. The same thesis also held true for Yageo Corp, which noted demand recovery. Also Holding finalized its new CEO and management team; the market responded positively to this line of succession. Alten SA was a notable sector detractor, as the IT service management company reported a customer slowdown; improvement is expected in late 2024. The French company was further burdened by regional politics.
Industrials had barbell returns, as outsized gains from Bizlink Holding Inc. and Valmet OYJ were outmatched by losses at Bravida Holding AB, SIXT Se, JAC Recruitment Co. and Aalberts NV. Bizlink gained traction as its cable connection components have been qualified by NVIDIA, while it has also embarked on liquid cooling supply components tied to artificial intelligence (AI). Aalberts was a strong performer last quarter; the stock started to decline after issuing a late May trading update that outlined weakness in its building and industrial divisions. Bravida, which installs heating, electrical, plumbing and HVAC to commercial/ governmental businesses, was tied to an overbilling scandal in Region Skane (a province in Sweden).
Portfolio Changes
During the quarter, the Fund sold Tri Chemical Laboratories after a strong run-up in the stock price. The company hit our valuation target, so we sold and took profits. Capital was reallocated to purchase Barry Callebaut, the Belgian confectioner; Canadian software company, OpenText Corp.; and Walmart de Mexico SAB, the Mexican and Central American Walmart division.
Outlook
Large caps have outperformed all other asset classes for a handful of years, as the Magnificent Seven sped along on technology gains and AI excitement. However, we believe the heated large cap market may reverse course as interest rate cuts and an improved earnings outlook stand to benefit small and mid-cap stocks. The Fund has an abundance of both due to valuations. We continue to opportunistically add companies (in any asset class), seeking those that are attractively priced with the strongest business fundamentals likely to weather any macro-economic environment.
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.