Pear Tree Polaris Small Cap Fund
The PEAR TREE POLARIS SMALL CAP FUND provides investors with the opportunity to participate in the growth potential of domestic small cap companies. A small cap company will generally be a company with a market capitalization from $250 million to $5 billion.
Investment Process
The Fund generally invests in domestic stocks with a market cap of up to $5 billion at the time of purchase. 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 industry.
Buy and Sell Discipline
The Fund uses proprietary models to rank publicly traded small cap companies on the basis of value and to narrow the universe down to 200 to 400 for further consideration. The Fund supplements the screening process by performing in-depth financial and fundamental analysis. Risk controls are also employed to prevent the Fund from concentrating its investments in any particular industry sector.
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*
1.18%
NAV*
$27.35
INCEPTION
August 3, 1992
MINIMUM INVESTMENT
$2,500
CUSIP
70472Q401
BENCHMARK
Russell 2000
NET EXPENSE RATIO(1)
1.42%
GROSS EXPENSE RATIO(2)
1.42%
*as of 8/6/2025
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.
Bin Xiao, CFA
Jason Crawshaw
Performance
| YTD As Of 8/6/2025 |
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) |
|---|---|---|---|---|---|---|---|---|
| 1.18% | 3.81% | 7.43% | 10.21% | 12.82% | 6.30% | 8.92% | 1.42% | 1.42% |
Calendar Year
| 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|---|---|---|
| 8.69% | 12.84% | -5.10% | 24.23% | -4.78% | 23.50% | -10.88% | 6.42% | 20.88% | -1.48% | -6.81% |
Portfolio
as of June 30, 2025
Top Ten Holdings
| Percentage Of Total Net Assets | 23.30 |
|---|---|
| The Bank of N.T. Butterfield & Son Limited | 2.50% |
| Progress Software Corporation | 2.40% |
| ePlus, Inc. | 2.40% |
| Netstreit Corporation | 2.30% |
| SLM Corporation | 2.30% |
| International Bancshares Corporation | 2.30% |
| HomeTrust Bancshares, Inc. | 2.30% |
| South Plains Financial, Inc. | 2.30% |
| Ingles Markets Inc. | 2.30% |
| Colony Bankcorp, Inc. | 2.20% |
Sector Weightings
| Percentage Of Total Net Assets | 100.00% |
|---|---|
| Industrials | 27.70% |
| Financials | 26.50% |
| Consumer Discretionary | 10.50% |
| Real Estate | 8.30% |
| Information Technology | 7.80% |
| Materials | 6.30% |
| Health Care | 4.90% |
| Consumer Staples | 4.40% |
| Energy | 4.00% |
| CASH + other assets (net) | -0.40% |
Top Ten Country Allocations
| Percentage Of Total Net Assets | 100.00% |
|---|---|
| United States | 90.10% |
| Puerto Rico | 4.30% |
| Bermuda | 2.50% |
| Colombia | 1.80% |
| Canada | 1.70% |
| CASH + other assets (net) | -0.40% |
Portfolio Characteristics
| Net Assets | $91,334,316 |
|---|---|
| Number Of Holdings | 57 |
| Percentage in Top 10 Holdings | 23.3 |
| Weighted Average Market Cap (Mil) | $4,468.27 |
| Annual Turnover | 49.00% |
Portfolio Allocation
| Percentage of Portfolio | 100.00% |
|---|---|
| Equity Securities | 100.4 |
| Cash and Other Assets (Net) | -4.00% |
Commentary
For the Quarter ended June 30, 2025
The Pear Tree Polaris Small Cap Fund’s Ordinary Shares (the “Fund”) underperformed its benchmark, the Russell 2000 Total Return Index (the “Index”). The Fund had a return of 3.81% at net asset value compared to 8.50% for the Index.
Market Conditions and Investment Strategies
Top contributions came from largely cyclical sectors, led by Information Technology (“IT”), Financials, Industrials and Consumer Discretionary. Absolute negative results were noted in Materials, Consumer Staples and Health Care.
Perdoceo Education was the top contributor, up more than 30% after announced strong sales, margins and EPS on the back of solid student enrollment and retention rates. Laureate Education Inc. gained on the same premise.
The Fund outperformed in IT on the back of Progress Software Corp., ePlus Inc., Arrow Electronics and MKS Inc., each of which had returns in excess of 18%. Progress reported good earnings, pointing to a successful integration of ShareFile while simultaneously doing share buybacks and paying down debt. ePlus capitalized on mix, focusing more on high-margin software and services. Arrow started to see some top-line improvement, as chip manufacturers begin a restocking cycle.
Among Industrials, Airlease Corp. recovered around 82% of its Russian exposure via insurance settlements; the company is positioned to grow the top line and improve shareholder returns. Conversely, Kforce Inc. declined on earnings and underwhelming guidance due to higher costs and weaker product mix. DNOW Inc. ceded some of its first quarter gains as crude oil came under pressure on trade war concerns.
Energy was mixed, with CVR Energy among the top 10 performers, while Diamondback languished in the bottom 10. CVR was a turnaround story, strengthening its balance sheet and capturing strong refining margins. Diamondback declined as OPEC decided to increase production, causing swings in oil prices.
Lundin Mining had robust first-quarter results, attributable to firm prices for copper and gold. The company reiterated its commitment to copper production expansion, low production costs, and strong shareholder returns. However, the Materials sector declined on Graphic Packaging and Cabot Corp. Graphic Packaging’s fast food/food-to-go customers have seen cyclically consistent lower sales. The tariff announcement impacted Cabot, as customers are unwilling to commit on inventory.
Portfolio Changes
Kimball Electronics was sold on fundamental deterioration in its auto and industrial business, while Global Medical REIT was replaced with Sabra Health Care REIT. We preferred Sabra’s risk/return profile and exposure to secularly-strong skilled nursing and senior housing. Another REIT, Phillips Edison, was added; 98% of the company’s properties are anchored by a large grocery chain with consistent foot traffic. Abercrombie & Fitch was purchased at an attractive valuation; the clothing retailer has been reshaping its product assortment, adding breadth and depth via organic and acquisitive growth.
Outlook
Markets worldwide remain in a “holding pattern”, awaiting the outcome of tariff negotiations. Thankfully, U.S. small cap companies are relatively impervious to tariffs as most produce domestically. Many portfolio companies are cautiously optimistic, but are cognizant that tariffs may start to deteriorate GDP. Higher-for-longer interest rates have also impacted; lower rates bandied around by President Trump will help the majority of U.S. small caps, narrowing the valuation gap between large and small caps. However, lower rates may hurt Financials. So we are carefully balancing the portfolio, positioned a bit more defensively, but with a wealth of
companies that we believe can capture upside on incremental economic gains.
Distributions
| Dividend | Short-Term Capital Gain | Long-Term Capital Gain | |
|---|---|---|---|
| 2024 | $0.1028 | $0.0000 | $0.7808 |
| 2023 | $0.2212 | $0.0000 | $0.0000 |
| 2022 | $0.1044 | $0.0000 | $2.2043 |
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, 2026 for all funds.
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.