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.
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.
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.
August 3, 1992
NET EXPENSE RATIO(1)
GROSS EXPENSE RATIO(2)
*as of 3/28/2023
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.
Bernard R. Horn, Jr.
Sumanta Biswas, CFA
Bin Xiao, CFA
As Of 3/28/2023
As Of 12/31/2022
As Of 12/31/2022
As Of 12/31/2022
As Of 12/31/2022
As Of 12/31/2022
|Since Inception As Of
|Total Gross Expense Ratio(1)||Total Net Expense Ratio(2)|
as of December 31, 2022
Top Ten Holdings
|Percentage Of Total Net Assets||27.30|
|Barrett Business Services, Inc.||3.20%|
|South Plains Financial, Inc.||3.10%|
|Wabash National Corporation||2.90%|
|Eagle Materials Inc.||2.70%|
|BOK Financial Corporation||2.60%|
|Graphic Packaging Holding Co.||2.60%|
|Percentage Of Total Net Assets||100.0%|
|CASH + other assets (net)||3|
Top Ten Country Allocations
|Percentage Of Total Net Assets||100.00%|
|CASH + other assets (net)||3.00%|
|Number Of Holdings||53|
|Percentage in Top 10 Holdings||27.3|
|Weighted Average Market Cap (Mil)||$3,645.87|
|Percentage of Portfolio||100.0%|
|Cash and Other Assets (Net)||3|
For the Quarter ended December 31, 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 13.64% at net asset value compared to 6.23% for the Index.
Market Conditions and Investment Strategies
Markets rallied in the fourth quarter on expectations that the interest rate cycle will slow on moderating inflation data; as a
result, many cyclical sectors performed best. In particular, the Fund’s performance was attributable to double-digit gains in the
Industrials, Energy, Materials, Consumer Discretionary, Information Technology and Consumer Staples sectors. The only detractor
of note was Communication Services.
As the wheels of e-commerce kept rolling, so did long-haul trucking, benefiting Wabash National Corp. The truck trailer company
was able to raise prices to cover inflationary raw material costs. HR management company Barrett Business Services announced
impressive third-quarter earnings, with higher revenues and gross billings on the back of new client wins. Science Applications,
the IT service to the U.S. government, cited strong organic growth as it was awarded new contracts.
The Energy sector performed well in the past 18 months, as oil/gas companies pushed up prices on limited supplies. After a
long drought of underinvestment, oil/gas companies are seeking to replenish production. As a result, equipment and service
companies like NOV Inc. and Dril-Quip Inc. are in high demand.
Perdoceo Education Corp. and Crocs, Inc. led the Consumer Discretionary sector. Investors were quick to snap up shoe and
sportswear retailers on the back of Nike’s upbeat guidance, referencing better inventory controls. Crocs Inc. was one such
beneficiary, as the stock gained more than 50% on the quarter, with booming international and acquisitive (HEYDUDE) sales.
Although enrollment declined at its for-profit universities, Perdoceo protected its profitability; a strong balance sheet should tide
over the company until enrollment picks up in a weaker economy.
Among the half-dozen holdings in absolute negative territory, Regal Rexnord came under pressure after announcing the
acquisition of Altra Industrial Motion. Investors were reticent about the size of the deal and Regal’s integration capabilities.
Kforce Inc. has been a multi-year performer in the portfolio; the stock declined this quarter on concerns about an IT slowdown.
Pacira Biosciences detracted most, as its flagship non-opioid pain therapy, Exparel, lagged sales expectations due to price and
During the quarter, the Fund exited the small last positions held in the Florida insurance market. Exco Technologies, the
automotive components manufacturer, was sold on lower car volumes and higher raw material costs. A number of Consumer
Discretionary stocks were sold in anticipation of sluggish consumer spending. Sally Beauty, the DIY hair color company, reported
disappointing sales, as did Central Garden and Pet, as spending flattened on pet goods. U.S. theater chain, Cinemark Holdings,
noted fewer blockbusters slated to hit the big screen in favor of streaming platforms. There were no new purchases in the
The economy is likely to slow in early 2023, as the impact of inflation and higher interest rates collide. However, this offers
opportunity as we expect equity prices become more attractive. High quality companies may be discounted in a volatile market;
we expect to capitalize on any downturn to purchase stocks that will enhance the valuation profile of the Fund and have upside
potential in an eventual economic recovery.
|Dividend||Short-Term Capital Gain||Long-Term Capital Gain|
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.
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.