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*
9.21%
NAV*
$36.53
INCEPTION
January 6, 1993
MINIMUM INVESTMENT
$1,000,000
CUSIP
70472Q302
BENCHMARK
Russell 2000
NET EXPENSE RATIO(1)
1.08%
GROSS EXPENSE RATIO(2)
1.20%
*as of 4/22/2026
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 4/22/2026 |
Quarterly As Of 3/31/2026 |
1 Year As Of 3/31/2026 |
3 Years As Of 3/31/2026 |
5 Years As Of 3/31/2026 |
10 Years As Of 3/31/2026 |
Since Inception As Of 3/31/2026 |
Total Gross Expense Ratio(1) | Total Net Expense Ratio(2) |
|---|---|---|---|---|---|---|---|---|
| 9.21% | 3.05% | 14.92% | 11.43% | 6.74% | 8.54% | 8.75% | 1.20% | 1.08% |
Calendar Year
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|
| 8.52% | 9.08% | 13.23% | -4.75% | 24.67% | -4.37% | 23.89% | -10.52% | 6.78% | 21.20% | -1.25% |
Portfolio
as of March 31, 2026
Top Ten Holdings
| Percentage Of Total Net Assets | 25.80 |
|---|---|
| Laureate Education, Inc. | 2.70% |
| Lantheus Holdings, Inc. | 2.70% |
| Northeast Bancorp | 2.60% |
| Ingles Markets Inc. | 2.60% |
| The Bank of N.T. Butterfield & Son Limited | 2.60% |
| V2X, Inc. | 2.60% |
| Black Hills Corporation | 2.50% |
| BOK Financial Corporation | 2.50% |
| South Plains Financial, Inc. | 2.50% |
| Perdoceo Education Corporation | 2.50% |
Sector Weightings
| Percentage Of Total Net Assets | 100.00% |
|---|---|
| Financials | 25.00% |
| Industrials | 21.30% |
| Information Technology | 9.20% |
| Real Estate | 8.70% |
| Health Care | 8.50% |
| Consumer Discretionary | 8.40% |
| Materials | 5.20% |
| Consumer Staples | 4.90% |
| Energy | 4.70% |
| Utilities | 2.50% |
| CASH + other assets (net) | 1.60% |
Top Ten Country Allocations
| Percentage Of Total Net Assets | 100.00% |
|---|---|
| United States | 92.70% |
| Bermuda | 2.60% |
| Puerto Rico | 2.10% |
| Canada | 1.00% |
| CASH + other assets (net) | 1.60% |
Portfolio Characteristics
| Net Assets | $92,052,337 |
|---|---|
| Number Of Holdings | 50 |
| Percentage in Top 10 Holdings | 25.8 |
| Weighted Average Market Cap (Mil) | $5,530.51 |
| Annual Turnover | 49.00% |
Portfolio Allocation
| Percentage of Portfolio | 100.00% |
|---|---|
| Equity Securities | 98.4 |
| Cash and Other Assets (Net) | 1.60% |
Commentary
For the Quarter ended March 31, 2026
For the Quarter ended March 31, 2026, the Pear Tree Polaris Small Cap Fund’s Ordinary Shares (the “Fund”) outperformed its benchmark, the Russell 2000 Total Return Index (the “Index”). The Fund had a return of 3.00% at net asset value compared to 0.89% for the Index.
Market Conditions and Investment Strategies
Information Technology (“IT”) and Energy sectors contributed most, with defense-related names providing an additional tailwind in the
wake of the Iran war. Biopharmaceutical holdings weighed on results, while Industrials and Consumer Discretionary lagged.
In IT, MKS Instruments had double-digit sales across semiconductor, advanced packaging, and photonics end markets. Arrow
Electronics and Avnet both beat consensus as the electronics distribution industry recovered from the 2023–2024 inventory
correction, with stabilizing orders and improving lead times. Among Industrials, V2X saw investors rotate into its defensive profile,
bolstered by a $100 million classified national security contract and Amazon smart tech account wins. Ennis Inc. reached a 52-
week high on steady organic and acquisitive growth, with the CFC Print & Mail integration proceeding smoothly. CVR Energy and
Diamondback Energy benefited directly from firmer oil prices.
Other highlights: Lundin Mining capitalized on tight copper supply and strong performance at its Caserones mine, while the Vicuna
joint venture bolstered the long-term growth outlook. Perdoceo Education beat expectations on organic enrollment growth, with a
recent acquisition adding further momentum. Ingles Markets continued its margin recovery from a prolonged post-COVID trough, with
activist engagement helping to improve governance and asset utilization.
Among detractors, SLM Corp faced pressure from rising student loan delinquencies, though its partnership with KKR should free up
capital for buybacks and reinvestment. RV manufacturer Winnebago faced thin dealer inventory, softer demand, and elevated oil
prices. Acuity Brands disappointed on flat organic growth in its lighting segment especially in non-residential construction. In Health
Care, Amphastar Pharmaceuticals reset on softer glucagon and epinephrine pricing and volume shortfalls. Harmony Biosciences
faced generic competition. While the IT sector produced some of the winners for the quarter, it also housed a number of the worst
performing stocks. Progress Software reported solid results but was not immune to broader software derating. ePlus posted good
earnings, but investors projected fewer enterprise deals in 2027.
Portfolio Changes
We profited off our investments in Abercrombie & Fitch and American Eagle Outfitters, selling within a year on strong same-store
sales recoveries. The potential for fundamental deterioration and/or unfavorable macro trends underscored our preemptive sales
of Maximus Inc., Evertec Inc. and Graphic Packaging. We initiated a position in HNI Corp., an office and residential furniture
manufacturer in the process of integrating its Steelcase acquisition; commercial real estate recovery and return-to-office trends
underpin this investment thesis.
Outlook
The quarter began on solid footing, but the mood shifted in March as the Iran conflict fed into inflation and growth concerns. The
high-end consumer, driving the K-shaped recovery and GDP growth, showed early signs of fatigue, while corporates reduced headcount on AI efficiencies. Against that backdrop, the portfolio’s defensive tilt — education, Consumer Staples, Utilities and Defense-adjacent names — proved its resilience. We are also eyeing Consumer Discretionary companies, where dislocations offer an entry point before an eventual consumer rebound.
Distributions
| Dividend | Short-Term Capital Gain | Long-Term Capital Gain | |
|---|---|---|---|
| 2025 | $0.3203 | $0.3125 | $3.0190 |
| 2024 | $0.3784 | $0.0000 | $0.7808 |
| 2023 | $0.3087 | $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.
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.