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*
4.67%
NAV*
$11.21
INCEPTION
January 30, 2019
MINIMUM INVESTMENT
$2,500
CUSIP
70472Q757
BENCHMARK
MSCI ACWI ex US
NET EXPENSE RATIO(1)
1.50%
GROSS EXPENSE RATIO(2)
1.60%
*as of 9/22/2023
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 9/22/2023 |
Quarterly As Of 6/30/2023 |
1 Year As Of 6/30/2023 |
3 Years As Of 6/30/2023 |
5 Years As Of 6/30/2023 |
10 Years As Of 6/30/2023 |
Since Inception As Of 6/30/2023 |
Total Gross Expense Ratio(1) | Total Net Expense Ratio(2) |
|---|---|---|---|---|---|---|---|---|
| 4.67% | 0.60% | 15.09% | 11.22% | N/A | N/A | 7.00% | 1.60% | 1.50% |
Calendar Year
| 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|---|---|---|
| -19.57% | 13.11% | 13.26% | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Portfolio
as of June 30, 2023
Top Ten Holdings
| Percentage Of Total Net Assets | 20.70% |
|---|---|
| D'Ieteren S.A. | 2.50% |
| Alimentation Couche-Tard Inc. | 2.40% |
| Midea Group Co., Ltd. | 2.20% |
| United Overseas Bank Limited | 2.10% |
| Toronto-Dominion Bank | 2.00% |
| TISCO Financial Group | 2.00% |
| Neurones S.A. | 1.90% |
| SpareBank Nord-Norge | 1.90% |
| NEXTAGE Co., Ltd. | 1.90% |
| Collins Foods Limited | 1.80% |
Sector Weightings
| Percentage Of Total Net Assets | 100.0% |
|---|---|
| Consumer Discretionary | 26.80% |
| Financials | 24.50% |
| Information Technology | 18.20% |
| Industrials | 13.70% |
| Materials | 7.70% |
| Consumer Staples | 3.80% |
| Utilities | 1.70% |
| Communication Services | 1.30% |
| Cash and Other Assets (Net) | 2.30% |
Top Ten Country Allocations
| Percentage Of Total Net Assets | 67.40% |
|---|---|
| United Kingdom | 10.90% |
| Canada | 10.00% |
| Japan | 9.70% |
| China | 6.90% |
| Australia | 6.50% |
| France | 5.80% |
| Taiwan | 5.40% |
| Sweden | 4.40% |
| Italy | 4.10% |
| Norway | 3.70% |
Portfolio Characteristics
| Net Assets | $28,288,998 |
|---|---|
| Number Of Holdings | 74 |
| Percentage in Top 10 Holdings | 20.70% |
| Weighted Average Market Cap (Mil) | $24,015.02 |
| Annual Turnover | 57.00% |
Portfolio Allocation
| Percentage of Portfolio | 100.0% |
|---|---|
| Equity Securities | 97.70% |
| Cash and Other Assets (Net) | 2.30% |
Commentary
For the Quarter ended June 30, 2023
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 0.60% at net asset value compared to 2.67% for the Index.
Market Conditions and Investment Strategies
Financials, Information Technology and Utilities were the top contributors, partially offset by underperformance in overweight
Industrials and Consumer Discretionary sectors. At the country level, the Fund benefitted from its holdings in Canada, Greece,
Brazil, India, Norway and Thailand; select stocks from Sweden, China and the United Kingdom detracted.
More than two-thirds of Financials were in absolute positive territory, led by Muthoot Finance Ltd. and two Canadian companies,
EQB Inc. and goeasy Ltd. Muthoot, Indian’s largest gold loan business, guided for 15% loan growth in 2024. EQB announced
record quarterly earnings, maintained full year forecasts and increased its dividend. Similarly, goeasy had record quarterly
earnings with strong loan growth and stable credit costs.
Among other portfolio standouts was Equatorial Energia SA, which is expected to benefit from Brazil’s concessions/utility
distribution renegotiations. Equatorial is a rumored participant in the restructuring of Light SA, while also eyeing the acquisition
of Enel Ceara, a Brazilian power distribution firm owned by Italy’s Enel SpA.
The Fund’s Consumer Discretionary holdings dragged down performance, as China’s Alibaba Group and Zhongsheng Group
encountered consumer spending headwinds. Accent Group, the Australian footwear/clothing retailer, introduced an online shoe
marketplace to compete with Amazon and eBay; however, the company declined as it faced stiff competition in the space.
Sector bright spots were Jumbo SA, the Greek toy-led retailer that sells quality goods at inexpensive prices; Games Workshop,
the British manufacturer of the blockbuster Warhammer game series; and Collins Foods Ltd., the Australian restaurant operator/
franchisor for KFC and Taco Bell.
In Industrials, Sanwa Holdings, the Japanese door/window shutter manufacturer, posted double-digit net sales growth in its North
American, European and other Asian markets, which more than mitigated lackluster results in Japan. Another strong contributor
was Bizlink Holding Inc., which reported quarter-on-quarter growth in sales, net income and EPS. These results couldn’t offset
sector losses at Bravida Holding AB, Fullcast Holdings Co Ltd and RS Group PLC. While Bravida, the Swedish installation/service
trade service (electricity, plumbing, etc.) provider, noted good quarterly earnings, guidance was tepid as management noted
increased competition, higher costs and lower installation volumes.
Portfolio Changes
Open Text, a Canadian information management software company, was sold opportunistically following a strong stock price
recovery. We purchased U.K. based Computacenter and Switzerland’s Also Holdings on the thesis that European IT distributors/
resellers have good growth projections and operating leverage. Another new buy was TRI Chemical Laboratories, a Japanese
specialty gas company for semiconductor manufacturing. We reinitiated a position in China Meidong Auto Holdings (previously
sold in March 2021), when the stock dropped into undervalued territory on consumer spending weakness in China
Outlook
The Fund takes a mid- to long-term view on investing, looking beyond the interim “noise” or macro volatility to identify
companies with strong fundamentals that can potentiallyy thrive in any environs. However, we capitalize on market volatility to
purchase companies at attractive prices; our research continues to identify a lot of opportunities, a number of which we expect
will be added to the portfolio in coming quarters
Distributions
| Dividend | Short-Term Capital Gain | Long-Term Capital Gain | |
|---|---|---|---|
| 2022 | $0.1509 | $0.0000 | $0.0000 |
| 2021 | $0.1554 | $1.0176 | $0.4147 |
| 2020 | $0.0000 | $0.0913 | $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.
Axiom International Investors began subadvising the Pear Tree Axiom Emerging Markets World Equity Fund December 8, 2018.
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 Axiom Emerging Markets World Equity
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.