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 35 years of investment experience to the Fund.

Fund Overview

YTD RETURN*
-14.87%

NAV*
$27.87

INCEPTION
January 6, 1993

MINIMUM INVESTMENT
$1,000,000

CUSIP
70472Q302

BENCHMARK
Russell 2000

NET EXPENSE RATIO(1)
1.13%

GROSS EXPENSE RATIO(2)
1.25%

 

*as of 9/28/2022

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 9/28/2022
Quarterly
As Of 6/30/2022
1 Year
As Of 6/30/2022
3 Years
As Of 6/30/2022
5 Years
As Of 6/30/2022
10 Years
As Of 6/30/2022
Since Inception As Of
6/30/2022
Total Gross Expense Ratio(1) Total Net Expense Ratio(2)
-14.87% -10.37% -9.32% 4.58% 3.95% 7.07% 8.43% 1.25% 1.13%

Calendar Year

2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
24.67% -4.37% 23.89% -10.52% 6.78% 21.20% -1.25% -6.59% 40.61% 13.64% -4.27%

Portfolio

as of June 30, 2022

Top Ten Holdings

Percentage Of Total Net Assets 25.40
South Plains Financial, Inc. 2.90%
Barrett Business Services, Inc. 2.80%
Cambridge Bancorp 2.70%
OFG Bancorp 2.60%
Graphic Packaging Holding Co. 2.60%
Colony Bankcorp, Inc. 2.50%
Cinemark Holdings, Inc. 2.40%
Perdoceo Education Corporation 2.40%
International Bancshares Corporation 2.30%
Science Applications International Corporation 2.20%

Sector Weightings

Percentage Of Total Net Assets 100.0%
Industrials 22.6
Financials 22.1
Information Technology 12.8
Materials 9.7
Consumer Discretionary 9
Health Care 8.1
Energy 7.1
Consumer Staples 3
Communication Services 2.4
CASH + other assets (net) 3.2

Top Ten Country Allocations

Percentage Of Total Net Assets 100.00%
United States 87.90%
Puerto Rico 4.80%
Canada 4.10%
CASH + other assets (net) 3.20%

Portfolio Characteristics

Net Assets $73,393,960
Number Of Holdings 61
Percentage in Top 10 Holdings 25.4
Weighted Average Market Cap (Mil) $2,920.37
Annual Turnover 23.00%

Portfolio Allocation

Percentage of Portfolio 100.0%
Equity Securities 96.8
Cash and Other Assets (Net) 3.2

FOR THE QUARTER ENDED JUNE 30, 2022

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 (10.45%) at net asset value compared to (17.20%) for the Index.

Market Conditions and Investment Strategies

Defensive sectors rotated back into favor after the last few quarters of cyclical sector gains. Health Care and Consumer Staples
were in absolute positive territory, while Financials and Industrials detracted. In Health Care, Natus Medical Inc. was up more
than 20% as the company fielded an all-cash acquisition bid from a private equity firm. Harmony Biosciences’ narcolepsy
drug continued to take market share. As recessionary concerns took hold, consumers reverted from discretionary spends to
food staples. As a result, poultry producer Sanderson Farms, pet accessory company Central Garden and Pet Co., and food
ingredients company, Ingredion, all performed relatively well. Among other top performers were: Perdoceo Education, which
retained a stable business model and an incredibly strong balance sheet; Standard Motor Products, which reported good
earnings on aftermarket parts for used cars; and Graphic Packaging Holding, which announced strong first quarter 2022 results
with organic growth and margin expansion.

The Energy sector had barbell results, with CVR Energy Inc. as the top portfolio performer offset by largest detractor, Dril-Quip
Inc. CVR was a big beneficiary of record refining margins. Dril-Quip ceded some of its first quarter gains, but this equipment
supplier should be primed for growth as oil companies start to reinvest in capital expenditures.

Financials did poorly, with FedNat Holding, Colony Bankcorp, Hercules Capital and United Insurance Holdings declining
measurably. Both FedNat and United work in the Florida insurance market, which has been in turmoil due to insurance fraud
and higher loss ratios. However, the Florida legislature just passed new regulations to help mitigate fraud issues, while both
companies have shored up their balance sheets.

In Industrials, auto parts supplier Exco Technologies dropped on supply constraints and availability of materials. Air Lease
Corp. was down on news that about 5% of its airplane fleet remained in Russia with no available exit strategy from the region.
However, Air Lease carries insurance for this type of incident; it is expected that the company will be duly reimbursed.

Portfolio Changes

The Fund exited Sanderson Farms, as the stock price ticked up even though the acquisition by Continental Grain/Cargill remains
in limbo due to U.S. anti-competition concerns. Asbury Automotive was also sold at a premium, as the auto dealer had record
profitability on the back of favorable supply-demand metrics, which may not prove repeatable in a recessionary environment.
Cash was reallocated to purchase Lundin Mining, a copper miner with strong growth prospects (renewable energy, industrial) and
Exelixis Inc., a biopharmaceutical maker with a successful oncology franchise.

Outlook

We expect volatility through the September quarter, as the Federal Reserve’s current interest rate rises have done little to tamp
down inflation. Geopolitical concerns, low unemployment and ongoing supply chain disruptions have kept inflation around 8%;
more draconian measures may be necessary to temper inflation, which may lead to an economic downturn. A portfolio of well managed, resilient companies is expected to withstand such market tumult, as evidenced by our outperformance over the past
few quarters.

Distributions

Dividend Short-Term Capital Gain Long-Term Capital Gain
2021 $0.2598 $0.6423 $1.4143
2020 $0.2401 $0.0000 $0.0000
2019 $0.2381 $0.0000 $1.8027

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 (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, 2023.

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.