OMB APPROVAL
OMB Number: 3235-0570
Expires: January 31, 2014
Estimated average burden
hours per response..... 20.6
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-3790
Pear Tree Funds
(Exact name of registrant as specified in charter)
55 Old Bedford Road, Lincoln, MA 01773
(Address of principal executive offices)
Willard L. Umphrey
Pear Tree Advisors, Inc.
55 Old Bedford Road, Lincoln, MA 01773
(Name and address of agent for service)
Registrant’s telephone number, including area code: (781) 676-5900
Date of fiscal year end: March 31
Date of reporting period: April 1, 2011 through March 31, 2012
ITEM 1. REPORTS TO SHAREOWNERS.
[PEAR TREE FUNDS COVER]
PEAR TREE FUNDS
Pear Tree Columbia Small Cap Fund
Pear Tree Columbia Micro Cap Fund
Pear Tree Quality Fund
Pear Tree PanAgora Dynamic Emerging Markets Fund
Pear Tree Polaris Foreign Value Fund
Pear Tree Polaris Foreign Value Small Cap Fund
ANNUAL REPORT
March 31, 2012
TABLE OF CONTENTS
President’s Letter 1
Fund Expenses 2
Portfolio Manager Commentaries 4
Pear Tree Columbia Small Cap Fund 4
Pear Tree Columbia Micro Cap Fund 7
Pear Tree Quality Fund 9
Pear Tree PanAgora Dynamic Emerging Markets Fund 11
Pear Tree Polaris Foreign Value Fund 13
Pear Tree Polaris Foreign Value Small Cap Fund 16
Schedules of Investments 19
Pear Tree Columbia Small Cap Fund 19
Pear Tree Columbia Micro Cap Fund 27
Pear Tree Quality Fund 32
Pear Tree PanAgora Dynamic Emerging Markets Fund 36
Pear Tree Polaris Foreign Value Fund 45
Pear Tree Polaris Foreign Value Small Cap Fund 48
Statements of Assets and Liabilities 52
Statements of Operations 56
Statements of Changes in Net Assets 58
Financial Highlights 64
Notes to Financial Statements 76
Information for Shareholders 94
Management Contract and Advisory Contract Approval 95
Report of Independent Registered Public Accounting Firm 97
Privacy Notice 98
Trustees and Officers 101
Service Providers inside back cover
This report must be preceded or accompanied by a current Pear Tree Funds prospectus for individuals who are not current shareholders of the Funds. If you are not a shareholder of a Pear Tree Fund, you should read the prospectus carefully before investing because it contains more complete information on the Pear Tree Funds’ investment objectives, risks, charges and expenses. Please consider this information carefully. For a prospectus and other information, visit www.peartreefunds.com or call (800) 326-2151.
NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Neither Pear Tree Funds nor U.S. Boston Capital Corporation is a bank.
PEAR TREE FUNDS
Dear Fellow Shareholder,
We are pleased to provide you with the Pear Tree Funds’ Annual Report for the twelve months ended March 31, 2012 and to update you on recent market conditions and the performance of the Pear Tree Funds.
For current performance information, please visit our website at www.peartreefunds.com. We thank you for your continued confidence in the Pear Tree Funds. Please feel free to e-mail us at feedback@peartreefunds.com or call us at 800-326-2151 with any questions or for assistance on your account.
Sincerely,
Willard Umphrey
President and Chairman
Any statements in this report regarding market or economic trends or the factors influencing the historical or future performance of the Pear Tree Funds are the views of Fund management as of the date of this report. These views are subject to change at any time based upon market and other conditions, and Fund management and the subadvisors to the Funds disclaim any responsibility to update such views. These views may not be relied upon as investment advice or as an indication of trading intent on behalf of any Pear Tree Fund. Any references to specific securities are not recommendations of such securities and may not be representative of any Pear Tree Fund’s current or future investments.
Past performance is no guarantee of future results, and there is no guarantee that market forecasts will be realized.
PEAR TREE FUNDS
FUND EXPENSES
We believe it’s important for Fund shareholders to have a clear understanding of fund expenses and the impact expenses have on investment returns. The following is important information about each Fund’s Expense Example, which appears below.
Expense Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees, distribution (12b-1) fees (on Ordinary Shares) and other Fund expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on $1,000 invested at the beginning of the period and held for the entire period from October 1, 2011 to March 31, 2012.
Actual Expenses
The first line for each Share Class for each Fund provides information about actual account returns and actual expenses. You may use the information in this line, together with the amount you invested for that Fund and Share Class, to estimate the expenses that you paid over the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000, then multiply the result by the number under the heading “Expenses Paid During the Period.”
Hypothetical Example for Comparison Purposes
The second line for each Share Class for each Fund shows you hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.
The hypothetical account values and hypothetical expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing expenses of investing in the Fund with the ongoing expenses of other funds. To do so, compare the Fund’s 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
PEAR TREE FUNDS
Expense Example for the 6 months ended March 31, 2012
| Pear Tree Fund | Share Class | Total Return Description | Beginning Account Value 10/1/11 | Ending Account Value 3/31/2012 | Annualized Expense Ratio | Expenses Paid* 10/1/11 – 3/31/2012 | |
| Small Cap | Ordinary | Actual | $1,000.00 | $1,285.50 | 1.70% | $ 9.71 | |
| Hypothetical | $1,000.00 | $1,016.51 | 1.70% | $8.56 | |||
| Institutional | Actual | $1,000.00 | $1,287.80 | 1.44% | $8.26 | ||
| Hypothetical | $1,000.00 | $1,017.78 | 1.44% | $7.29 | |||
| Quality | Ordinary | Actual | $1,000.00 | $1,208.00 | 1.51% | $8.31 | |
| Hypothetical | $1,000.00 | $1,017.47 | 1.51% | $7.60 | |||
| Institutional | Actual | $1,000.00 | $1,211.60 | 1.00% | $5.55 | ||
| Hypothetical | $1,000.00 | $1,019.98 | 1.00% | $5.07 | |||
| Emerging Markets | Ordinary | Actual | $1,000.00 | $1,182.10 | 1.77% | $9.64 | |
| Hypothetical | $1,000.00 | $1,016.17 | 1.77% | $8.91 | |||
| Institutional | Actual | $1,000.00 | $1,183.50 | 1.52% | $8.28 | ||
| Hypothetical | $1,000.00 | $1,017.42 | 1.52% | $7.65 | |||
| Foreign Value | Ordinary | Actual | $1,000.00 | $1,167.50 | 1.66% | $9.02 | |
| Hypothetical | $1,000.00 | $1,016.68 | 1.66% | $8.39 | |||
| Institutional | Actual | $1,000.00 | $1,169.10 | 1.41% | $7.64 | ||
| Hypothetical | $1,000.00 | $1,017.95 | 1.41% | $7.11 | |||
| Foreign Value | Ordinary | Actual | $1,000.00 | $1,126.40 | 1.72% | $9.17 | |
| Small Cap | Hypothetical | $1,000.00 | $1,016.38 | 1.72% | $8.70 | ||
| Institutional | Actual | $1,000.00 | $1,127.30 | 1.48% | $7.88 | ||
| Hypothetical | $1,000.00 | $1,017.59 | 1.48% | $7.47 | |||
| Micro-Cap | Ordinary | Actual | $1,000.00 | $1,246.10 | 2.00% | $11.23 | |
| Hypothetical | $1,000.00 | $1,013.74 | 2.00% | $10.08 | |||
| Institutional | Actual | $1,000.00 | $1,248.90 | 1.73% | $9.73 | ||
| Hypothetical | $1,000.00 | $1,015.00 | 1.73% | $8.72 |
| * | “Expenses Paid” for each Fund share class relating to actual or hypothetical returns, is the amount equal to the product of (a) that Fund’s and Share Class’ average account value for the six-month period ended March 31, 2012, multiplied by (b) the corresponding “Annualized Expense Ratio” multiplied by (c) the fraction 183/366 (which reflects the six-month period covered by this report). |
PEAR TREE COLUMBIASMALL CAP FUND
INVESTMENT PROFILE
All Data as of March 31, 2012
Investment Commentary
For the fiscal year period ended March 31, 2012 the Pear Tree Columbia Small Cap Fund’s Ordinary Shares (the “Fund”) outperformed its benchmark, the Russell 2000 Index. The Fund achieved a return of 2.48% at net asset value compared to –0.18% for the Index.
| Fund Information | ||
| Net Assets Under Management | $102.1 Million | |
| Number of Companies | 176 | |
| Price to Book Ratio | 3.0 | |
| Price to Earnings Ratio | 25.9 | |
| Ordinary | Institutional | |
| Total Expense Ratio (Net) | 1.67% | 1.42% |
| Ticker Symbol | USBNX | QBNAX |
Market Conditions and Investment Strategies
One year ago the markets were assessing the ramifications of the devastating earthquake that hit Japan in March 2011. Initially, equity markets around the world fell but bottomed quickly and rallied back. The momentum continued into April, with the Index hitting new recovery highs. The old adage “sell in May and go away” was then sounded. By mid-June, the Russell 2000 Index had fallen by more than 10% but reversed, recovering most losses by early July. In August, Standard & Poor’s downgraded the credit rating of U.S. Treasury bonds for the first time in history. Equity markets around the world experienced their most volatile week since the financial crisis. Small cap stocks were hit particularly hard in September and investors were stunned. They took events in stride, however, and stocks rebounded nicely late in the year to finish 2011 in good stead. Positive momentum continued into 2012 as equity markets posted the best first quarter returns since 1998.
Small cap stocks were volatile throughout the year. Our strategy of buying high quality companies, which tends to protect capital in down markets, helped us to earn a positive return and outperform the benchmark for the period. Within the Russell 2000 Index, the defensive Consumer Staples, Health Care and Utilities sectors were the top three performers posting returns of roughly 10%, 9% and 8% respectively for the year. Consumer Discretionary, Financials and Telecommunications Services also had positive returns for the period. Energy and Materials were the worst performers posting losses of over 15% and 13% respectively. Information Technology and Industrials also posted single digit negative returns.
Analyzing our performance versus the benchmark for the year, Information Technology was our biggest contributor adding 2.3% to our return. Portfolio holding Alliance Data Systems Inc. gained nearly 47% for the period as the outsourcing company announced several new business wins. We also outperformed in Energy, which contributed 1.8% to returns due primarily to holding Core Laboratories N.V., which posted strong earnings from their oil field services. Telecommunications Services contributed over 1.1% versus the Index as SBA Communications Corp. gained over 28% as demand for wireless transmission infrastructure remained robust.
Conversely, we underperformed relative to the Index during the year in Materials where our stock selection detracted 1.0% from our return. This was due in part to the performance of portfolio holding Stillwater Mining Co., which declined over 53% during the year. Stillwater made a controversial acquisition and fell significantly on the announcement. In light of this change in strategy the security was sold. Our stock selection in Health Care and Financials also detracted from our return for the year versus the Index.
Portfolio Changes
The Financials, Consumer Discretionary, Consumer Staples, and Telecommunications Services sector weightings increased during the year, while the Industrials, Energy, and Materials sectors declined. Changes in all other sectors were not material.
PEAR TREE COLUMBIA SMALL CAP FUND
A Look Ahead
We are encouraged by the strength of the market, but we are reluctant to predict a continuation of this recent rally. There is a large contingent of investors, however, who have found refuge in low yielding bonds and have missed the recent move. They may capitulate at some point and drive prices higher as performance anxiety sets in.
The Fund is co-managed by Robert von Pentz, CFA, and Rhys Williams, CFA of Columbia Partners, L.L.C. Investment Management.
PEAR TREE COLUMBIA SMALL CAP FUND
Top 10 Holdings
| Percentage of total net assets | 34.4% |
| Acacia Research Corporation—Acacia Technologies | 4.7% |
| SBA Communications Corp., Class A | 4.6% |
| Core Laboratories N.V. | 4.5% |
| Alliance Data Systems Corporation | 4.1% |
| Entertainment Properties Trust | 4.0% |
| Hersha Hospitality Trust | 3.7% |
| SXC Health Solutions Corp. | 2.6% |
| Gardner Denver, Inc. | 2.1% |
| United Natural Foods, Inc. | 2.1% |
| F.N.B. Corporation | 2.0% |
There is no guarantee that such securities will continue to be viewed favorably or held in the Fund’s portfolio.
Sector Allocation
| Percentage of total net assets | 100.0% |
| Financials | 21.1% |
| Information Technology | 18.9% |
| Industrials | 15.5% |
| Health Care | 11.7% |
| Consumer Discretionary | 11.2% |
| Energy | 7.8% |
| Consumer Staples | 6.0% |
| Telecommunication Services | 4.7% |
| Materials | 0.1% |
| CASH + other assets (net) | 3.0% |
Value of a $10,000 Investment
Pear Tree Small Cap (PTSC) Ordinary Shares vs.
Russell 2000 Index
Average Annual Total Returns
| 1Q 2012 | Six Months | One Year | Five Year | Ten Year | Since Inception | Inception Date | |
Ordinary Shares | 13.62% | 28.55% | 2.48% | –2.03% | 4.59% | 10.06% | 08/03/92 |
Institutional Shares1 | 13.64% | 28.73% | 2.69% | –1.78% | 4.98% | 9.34% | 01/06/93 |
Russell 20002 | 12.44% | 29.83% | –0.18% | 2.13% | 6.45% | 9.36% |
1 Institutional Shares may only be purchased by certain categories of investors and are not subject to sales charges or distribution fees.
2 The Russell 2000 Index is a market capitalization-weighted index of 2,000 small company stocks. It is widely recognized as representative of the general market for small company stocks. Index returns assume the reinvestment of dividends and, unlike Fund returns, do no reflect any fees or expenses. You cannot invest directly in an Index. The beginning date of the Index is 08/3/92.
Small company stocks may trade less frequently and in a limited volume, and their prices may fluctuate more than stocks of other companies. Small company stocks may therefore be more vulnerable to adverse developments than those of larger companies. The Fund may invest in the issuers in the real estate industry. Changes in real estate values or economic downturns can have a significant negative effect on these issuers.
PEAR TREE COLUMBIA MICRO CAP FUND
INVESTMENT PROFILE
All Data as of March 31, 2012
Investment Commentary
For the period since inception, beginning September 12, 2011, and ending March 31, 2012, the Pear Tree Columbia Micro Cap Fund’s Ordinary Shares (the “Fund”) underperformed its benchmark, the Russell Micro Cap Index (the “Index”). The Fund achieved a return of 18.36% at net asset value compared to 19.87% for the Index.
| Fund Information | ||
| Net Assets Under Management | $4.3 Million | |
| Number of Companies | 95 | |
| Price to Book Ratio | 2.4 | |
| Price to Earnings Ratio | 15.2 | |
| Ordinary | Institutional | |
| Total Expense Ratio (Net) | 2.00% | 1.75% |
| Ticker Symbol | PTFMX | MICRX |
Market Conditions and Investment Strategies
Reading the financial headlines over the past six months, one would conclude there was ample opportunity for equities to decline: the European Union was near collapse; indications were that China’s economy was faltering; and political dysfunction was never more evident. The financial markets, however, confounded the skeptics and rebounded from last summer’s retreat posting two back-to-back quarters of double digit returns. While most of the focus has been on the geopolitical drama unfolding across the pond, here at home economic prospects appear to be improving, albeit slowly. We’re still a long way from robust growth, but on the margin some improvement in economic data has been seen. The unemployment rate has declined gradually with a consequent improvement consumer confidence. This being a Presidential election year, we doubt if the incumbents will allow the economy to falter, at least until after November.
Since last September the market drivers in the Index on a sector level have been Consumer Discretionary and Health Care with gains of 33% and 31% respectively followed by Materials, Financials, Industrials, Consumer Staples and Energy all with gains of over 20% for the period. Information Technology, Telecommunications Services, and Utilities were the laggards with positive returns of 16%, 12% and 8% respectively.
The Fund’s performance relative to the benchmark index was derived from security selection. One half of our underperformance was a result of stock selection in the strong Consumer Discretionary sector where we gave up 2.3% of return. Portfolio holding Overstock.com was partially responsible as the stock fell 32% during the period. Selection in Consumer Staples cost an additional 1% of relative return as Coffee Holding Co. Inc. declined 42%. Also, our marginal cash position in a strong up market detracted 0.8% from returns.
Conversely, our stock selections in Energy contributed 0.3% of return versus the Index and our lower allocation to the poor performing Utilities sector also added 0.2% of relative return.
Portfolio Changes
During the period, we added the most weight to the Consumer Discretionary and Consumer Staples sectors, which by period end represented the largest relative positions. The weighting in the Energy sector also increased. We significantly reduced the holdings in Health Care to the point that it was the greatest relative underweight sector as of period end. The Industrials, Information Technology, Materials, Telecommunications Services and Utilities sectors also declined in weight during the period.
A Look Ahead
We remain constructive in our outlook for microcap stocks, and believe they should continue to perform well as the economic recovery still has momentum. They also tend to benefit from mergers and acquisitions activity, which we believe likely to gain steam given the record amount of cash held by corporations and private equity.
The Fund is managed by Robert von Pentz, CFA, of Columbia Partners, L.L.C. Investment Management.
PEAR TREE COLUMBIA MICRO CAP FUND
Top 10 Holdings
| Percentage of total net assets | 16.3% |
| iShares Russell Microcap Index | 4.3% |
| Adams Resources & Energy, Inc. | 1.6% |
| TESSCO Technologies, Inc. | 1.5% |
| Gordmans Stores, Inc. | 1.4% |
| Rentech, Inc. | 1.3% |
| CompuCredit Holdings Corporation | 1.3% |
| Ascent Solar Technologies, Inc. | 1.3% |
| TravelCenters of America LLC | 1.2% |
| Sturm, Ruger& Co., Inc. | 1.2% |
| Coffee Holding Co., Inc. | 1.2% |
There is no guarantee that such securities will continue to be viewed favorably or held in the Fund’s portfolio.
Sector Allocation
| Percentage of total net assets | 100.0% |
| Financials | 23.0% |
| Consumer Discretionary | 21.0% |
| Industrials | 17.6% |
| Information Technology | 10.8% |
| Consumer Staples | 9.8% |
| Energy | 4.2% |
| Materials | 3.9% |
| Health Care | 1.0% |
| Telecommunication Services | 1.6% |
| Exchange Traded Funds | 4.3% |
| Cash and Other Assets (Net) | 2.8% |
Value of a $10,000 Investment
Pear Tree Columbia Micro Cap (PTMC) Ordinary Shares vs.
Russell Microcap Index
Average Annual Total Returns
| 1Q 2012 | Six Months | One Year | Five Year | Ten Year | Since Inception | Inception Date | |
| Ordinary Shares | 10.78% | 24.72% | 18.36% | 9/12/2011 | |||
Institutional Shares1 | 10.94% | 25.00% | 14.75% | 9/7/2011 | |||
Russell Microcap Index2 | 15.29% | 31.23% | 19.87% |
1 Institutional Shares may only be purchased by certain categories of investors and are not subject to sales charges or distribution fees.
2 The Russell Microcap Index measures the performance of the microcap segment of the U.S. equity market. Microcap stocks make up less than 3% of the U.S. equity market (by market cap) and consist of the smallest 1,000 securities in the small-cap Russell 2000®Index, plus the next smallest eligible securities by market cap. The Russell Microcap Index is constructed to provide a comprehensive and unbiased barometer for the microcap segment trading on national exchanges, while excluding lesser-regulated OTC bulletin board securities and pink-sheet stocks due to their failure to meet national exchange listing requirements. The Russell Microcap is completely reconstituted annually to ensure larger stocks do not distort performance and characteristics of the true microcap opportunity set.
Investing in 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 than the U.S. market.
PEAR TREE QUALITY FUND
INVESTMENT PROFILE
All Data as of March 31, 2012
Investment Commentary
For the fiscal year period ended March 31, 2012, the Pear Tree Quality Fund’s Ordinary Shares (the “Fund”) outperformed its benchmark, S&P 500 (the “Index”). The Fund achieved a return of 16.99% at net asset value compared to 8.54% for the Index.
| Fund Information | ||
| Net Assets Under Management | $95.1 Million | |
| Number of Companies | 67 | |
| Price to Book Ratio | 3.4 | |
| Price to Earnings Ratio | 13.0 | |
| Ordinary | Institutional | |
| Total Expense Ratio (Net) | 1.51% | 1.00% |
| Ticker Symbol | USBOX | QGIAX |
Market Conditions and Investment Strategies
The Fund’s investment manager currently chooses securities for the Fund by periodically selecting a mutual fund (the “Target Portfolio”) and monitoring the Target Portfolio’s holdings. The Fund’s investment adviser, at the direction of the investment manager, rebalances the Fund’s portfolio to correspond to the Target Portfolio’s most recent holdings as publicly reported. From April 1, 2011 to March 31, 2012, the Fund’s Ordinary Shares, when compared to the Target Portfolio, had a tracking error of 0.27.
Over the previous twelve months, the Consumer Staples sector was the largest positive contributor to the Fund’s performance. The fact that the Fund has no holdings in the Financials sector also provided strong outperformance relative to the benchmark. The Fund’s overweight positions in the Healthcare and Information Technology sectors also contributed to outperformance.
The greatest detractor to performance came from the Utilities sector where the underweighting negatively affected relative performance. Other detractors were sector allocation in Consumer Discretionary and stock selection in the Industrials sector.
Portfolio Changes
We expect the Fund to have a relatively low turnover rate given the historical stability and relatively low turnover rate of the current Target Portfolio.
For the twelve-month period ending March 31, 2012, the Fund rebalanced the holdings four times to replicate the publicly disclosed holdings of the current target portfolio. The four rebalances resulted in the sale of twenty positions. Also as a result of the rebalances, the Fund opened new positions in twelve companies, six Healthcare companies, three Technology companies, two Consumer Staple companies and one Consumer Discretionary company.
A Look Ahead
For the foreseeable future, the Fund’s investment manager expects the Target Portfolio to remain the same. For more information on the selection of the Target Portfolio(s), please see the Fund’s Prospectus.
The Fund’s target portfolio is GMO Quality Fund III (GQETX) and the Fund is managed by Robert von Pentz, CFA of Columbia Partners, L.L.C. Investment Management.
PEAR TREE QUALITY FUND
Top 10 Holdings
| Percentage of total net assets | 45.7% |
| Microsoft Corporation | 6.2% |
| Cisco Systems, Inc. | 5.5% |
| Philip Morris International, Inc. | 5.4% |
| Johnson & Johnson | 5.1% |
| Apple, Inc. | 4.7% |
| Coca-Cola Company (The) | 4.1% |
| Google, Inc. | 4.1% |
| Pfizer Inc. | 3.8% |
| Oracle Corporation | 3.7% |
| Wal-Mart Stores, Inc. | 3.1% |
There is no guarantee that such securities will continue to be viewed favorably or held in the Fund’s portfolio.
Sector Allocation
| Percentage of total net assets | 100.0% |
| Information Technology | 32.3% |
| Consumer Staples | 27.5% |
| Health Care | 23.8% |
| Energy | 11.2% |
| Consumer Discretionary | 4.2% |
| Industrials | 0.1% |
| Telecommunication Services | 0.0% |
| CASH + other assets (net) | 0.9% |
Value of a $10,000 Investment
Pear Tree Quality (PTQ) Ordinary Shares vs.
S&P 500 Index
Average Annual Total Returns
| 1Q 2012 | Six Months | One Year | Five Year | Ten Year | Since Inception | Inception Date | |
| Ordinary Shares | 9.31% | 20.80% | 16.99% | –2.27% | 1.69% | 8.83% | 05/06/85 |
Institutional Shares1 | 9.44% | 21.16% | 17.57% | –2.18% | 1.98% | 7.23% | 03/25/91 |
S&P 5002 | 12.59% | 25.89% | 8.54% | 2.01% | 4.12% | 10.55% |
1 Institutional Shares may only be purchased by certain categories of investors and are not subject to sales charges or distribution fees.
2 The S&P 500 Index is an unmanaged index of stocks chosen to their size industry characteristics. It is widely recognized as representative of stocks in the United States. Index returns assume the reinvestment of dividends and, unlike Fund returns, do not reflect any fees or expenses. You cannot invest directly in the Index. The beginning date for the Index is 05/29/85.
Investing in foreign 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 than the U.S. market.
PEAR TREE PANAGORA DYNAMIC EMERGING MARKETS FUND
INVESTMENT PROFILE
All Data as of March 31, 2012
Investment Commentary
For the fiscal year ended March 31, 2012, the Pear Tree PanAgora Dynamic Emerging Markets Fund’s Ordinary Shares (the “Fund”) outperformed its benchmark, MSCI Emerging Markets Index (the “Index”). The Fund achieved a return of –7.80% at net asset value compared to –8.52% for the Index.
| Fund Information | ||
| Net Assets Under Management | $160.8 Million | |
| Number of Companies | 217 | |
| Price to Book Ratio | 1.6 | |
| Price to Earnings Ratio | 9.7 | |
| Ordinary | Institutional | |
| Total Expense Ratio (Net) | 1.76% | 1.52% |
| Ticker Symbol | QFFOX | QEMAX |
Market Conditions and Investment Strategies
On a country basis, the largest contributors were Taiwan (+0.98%) and Brazil (+0.90%). Among holdings in Taiwan, the largest contributor was an overweight to Radiant Opto-Electronic while among holdings in Brazil, the largest contributor was an overweight to Companhia De Bebidas. The largest detractors were India (–0.44%) and Russia (–0.38%). Among holdings in India the largest detractor was an overweight to Bank of Baroda while among holdings in Russia the largest detractor was an overweight to Evraz Group S.A.
On a sector basis, the largest contributors were Industrials (+0.86%) and Consumer Staples (+0.71%). Among the holdings in Industrials the largest contributor was an overweight to L.G. International Corp. while among holdings in Consumer Staples the largest contributor was an overweight to FomentoEconomicoMexicano. The largest detractors were Materials (–0.22%) and Health Care (–0.21%). Among holdings in Materials the largest detractor was an overweight to KP Chemical Corp. while among holdings in Health Care the largest detractor was an overweight to China Pharmaceutical.
During the period, our proprietary Dynamic Alpha model performed well — our best ranked alpha stocks outperformed the worst ranked alpha stocks.
Our proprietary Valuation composite performed well — stocks with attractive valuations outperformed their more expensive peers.
Our proprietary Quality composite performed well — stocks with strong business and management quality metrics outperformed lower quality peers.
Our proprietary Momentum composite performed well — stocks with positive market sentiment outperformed stocks with poor earnings and price momentum.
Portfolio Changes
There were no significant portfolio changes during the fiscal year ended March 31, 2012.
A Look Ahead
As a quantitative investment firm, we tend not to provide strategy-specific forward looking commentary. We believe that our systematic investment approach ensures that we deliver a portfolio of our highest conviction of ideas to all of our clients.
The Fund’s portfolio is managed by a team of portfolio managers at PanAgora Asset Management, Inc.
PEAR TREE PANAGORA DYNAMIC EMERGING MARKETS FUND
Top 10 Holdings
| Percentage of total net assets | 20.4% |
| Samsung Electronics Co., Ltd. | 4.4% |
| Vale SA | 2.5% |
| PetroleoBrasileiro SA | 2.2% |
| Gazprom | 1.9% |
| CNOOC Limited | 1.8% |
| China Construction Bank Corporation | 1.7% |
| LUKoil | 1.6% |
Taiwan Semiconductor Manufacturing Co., Ltd. | 1.6% |
| Hyundai Motor Co. | 1.4% |
| Hon HaiPrecision Industry Co., Ltd. | 1.3% |
There is no guarantee that such securities will continue to be viewed favorably or held in the Fund’s portfolio.
Sector Allocation
| Percentage of total net assets | 100.0% |
| Financials | 21.2% |
| Information Technology | 15.6% |
| Energy | 14.7% |
| Materials | 12.3% |
| Consumer Discretionary | 10.2% |
| Consumer Staples | 10.0% |
| Industrials | 6.8% |
| Telecommunication Services | 5.9% |
| Utilities | 2.0% |
| Health Care | 0.6% |
| Exchange Traded Funds | 0.1% |
| CASH + other assets (net) | 0.6% |
Top 10 Country Allocations
| Percentage of total net assets | 85.1% |
| South Korea | 14.8% |
| Brazil | 13.7% |
| Taiwan | 13.7% |
| China | 11.1% |
| South Africa | 7.2% |
| Hong Kong | 6.2% |
| Russia | 5.5% |
| India | 5.0% |
| Malaysia | 4.2% |
| Mexico | 3.7% |
Value of a $10,000 Investment
Pear Tree Emerging Markets (PTEM) Ordinary Shares vs. MSCI EM Index
Average Annual Total Returns
| 1Q 2012 | Six Months | One Year | Five Year | Ten Year | Since Inception | Inception Date | |
| Ordinary Shares | 15.43% | 18.21% | –7.80% | 1.71% | 14.80% | 6.56% | 09/30/94 |
Institutional Shares1 | 15.49% | 18.35% | –7.56% | 1.96% | 15.18% | 8.52% | 04/02/96 |
MSCI EM2 | 14.14% | 19.22% | –8.52% | 4.97% | 14.47% | 6.14% |
1 Institutional Shares may only be purchased by certain categories of investors and are not subject to sales charges or distribution fees.
2 The Morgan Stanley Capital International Emerging Markets (“MSCI EM”) Index is an unmanaged index comprised of stocks located in countries other than the United States. It is widely recognized as representative of the general market for emerging markets. Index returns assume the reinvestment of dividends and, unlike Fund returns, do not reflect fees or expenses. You cannot invest directly in an Index. The beginning date for the Index is 09/30/94.
Investing in 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 than the U.S. market.
PEAR TREE POLARIS FOREIGN VALUE FUND
INVESTMENT PROFILE
All Data as of March 31, 2012
Investment Commentary
For the fiscal year ended March 31, 2012, the Pear Tree Polaris Foreign Value Fund’s Ordinary Shares (the “Fund”) underperformed its benchmark, the MSCI EAFE Index (the “Index”). The Fund achieved a return of –6.55% at net asset value compared to –5.31% for the Index.
| Fund Information | ||
| Net Assets Under Management | $93.3 Million | |
| Number of Companies | 68 | |
| Price to Book Ratio | 1.9 | |
| Price to Earnings Ratio | 15.1 | |
| Ordinary | Institutional | |
| Total Expense Ratio (Net) | 1.70% | 1.43% |
| Ticker Symbol | QUSOX | QUSIX |
Market Conditions and Investment Strategies
Top contributions to Fund returns came from Consumer Discretionary and Consumer Staples holdings. In particular, all four British homebuilders posted double-digit returns. Mortgage approvals rose to a two-year high in January. All companies reported good results through calendar year-end 2011 and most noted satisfactory progress in forward sales led by new sites and sales per site.
In Consumer Staples,Greencore posted strong underlying sales growth in its convenience food division, even excluding the contribution from Uniq, which was acquired last year. The stock price was up on news of a potential takeover bid that management rejected on valuation grounds. Japanese companies Meiji Holdings, Asahi Group and Nichirei also produced strong returns throughout the year.
The largest deterrent to returns was Industrials, as shipping companies were negatively impacted by concerns of recession in some European countries, and by the glut of supply due to China’s new ship builds.
Among our current European holdings, UK-based Lloyds TSB Group and Belgian KBC Bank underperformed for the year on expectations of higher capital requirements; the two stocks were sold. DnB NOR ASA and SvenskaHandelsbanken, which suffered along with its Nordic peers in 2011, rebounded strong in early 2012, benefitting from budget surpluses and faster economic growth rates. Through calendar year 2011, a weakening South African Rand and higher energy prices helped Sasol Ltd. post an 83% profit increase at the December interim report. However, the stock declined from March 2011.
Portfolio Changes
During the fiscal year, the Fund sold holdings in companies that had reached their valuation limits or where analysis revealed deterioration in individual company fundamentals. We sold six Industrials, two of which reached their valuation limits on positive news of takeovers (Demag Cranes and Tognum AG). In similar fashion, when South African-based mining company Metorex was acquired by the Jinchuan Group of China for its assets in the Democratic Republic of the Congo, our holdings in the company were sold for cash. Additional holdings in Energy, Financials, Telecommunications and Utilities sectors were sold.
Cash from sales was deployed to new purchases including a German telecom provider, a Hong Kong water utility, an Israeli pharmaceutical company and a French oil exploration and production company. We also increased our positions in some promising companies, including an Indian global technology services corporation.
PEAR TREE POLARIS FOREIGN VALUE FUND
A Look Ahead
Although we are seeing signs of a market rebound, spurred on by growth inflections in the U.S.and emerging world, we believe that macro-economic conditions remain tenuous. Cautious optimism must be balanced with concerns of ongoing market volatility and the European debt burden. After numerous sales throughout the year, we increased our cash position readying our portfolio for buying opportunities predicated on negative news.
Our research pipeline has identified a significantly larger number of international companies trading at attractive valuations than at any time since early 2009. We are optimistic about the companies currently appearing in our investment analysis, and continue to conduct extensive on-the-ground research of stock candidates. We expect to make new purchases carefully to attempt to capture maximum upside potential.
The Fund’s lead portfolio manager is Bernard R. Horn, Jr., of Polaris Capital Management, LLC
PEAR TREE POLARIS FOREIGN VALUE FUND
Top 10 Holdings
| Percentage of total net assets | 25.7% |
| Samsung Electroinics Company Ltd. | 3.8% |
| Taylor Wimpey plc | 3.0% |
| Barratt Developments plc | 2.5% |
| Kone OYJ, Class B | 2.4% |
| Persimmon plc | 2.4% |
| BASF SE | 2.4% |
| Greencore Group plc | 2.3% |
| Investor AB, Class B | 2.3% |
| Methanex Corporation | 2.3% |
| DnB Bank ASA | 2.3% |
There is no guarantee that such securities will continue to be viewed favorably or held in the Fund’s portfolio.
Sector Allocation
| Percentage of total net assets | 100.0% |
| Materials | 17.2% |
| Consumer Discretionary | 14.5% |
| Financials | 12.1% |
| Consumer Staples | 8.4% |
| Information Technology | 7.2% |
| Industrials | 6.7% |
| Energy | 5.4% |
| Health Care | 4.5% |
| Telecommunication Services | 3.7% |
| Utilities | 1.2% |
| Cash and Other Assets (Net) | 19.1% |
Top 10 Country Allocations
| Percentage of total net assets | 65.2% |
| Germany | 11.6% |
| United Kingdom | 10.5% |
| Japan | 10.3% |
| Sweden | 6.7% |
| Ireland | 5.7% |
| France | 5.6% |
| Finland | 5.5% |
| South Korea | 3.8% |
| India | 3.2% |
| Canada | 2.3% |
Value of a $10,000 Investment
Pear Tree Foreign Value (PTFV) Ordinary Shares vs.
MSCI EAFE Index
Average Annual Total Returns
| 1Q 2012 | Six Months | One Year | Five Year | Ten Year | Since Inception | Inception Date | |
| Ordinary Shares | 15.99% | 16.75% | –6.55% | –3.79% | 8.14% | 5.86% | 05/15/98 |
Institutional Shares1 | 16.10% | 16.91% | –6.34% | –3.60% | 8.38% | 7.72% | 12/18/98 |
MSCI EAFE2 | 10.98% | 14.73% | –5.31% | –3.04% | 6.16% | 3.82% |
1 Institutional Shares may only be purchased by certain categories of investors and are not subject to sales charges or distribution fees.
2 The Morgan Stanley Capital International Europe, Australia, and Far East (“MSCI EAFE”) Index is an unmanaged index comprised of stocks located in countries other than the United States. It is widely recognized as representative of the general market for emerging markets. Index returns assume the reinvestment of dividends and, unlike Fund returns, do not reflect fees or expenses. You cannot invest directly in an Index. The beginning date for the Index is 05/29/98.
Investing in 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 than the U.S. market.
PEAR TREE POLARIS FOREIGN VALUE SMALL CAP FUND
INVESTMENT PROFILE
All Data as of March 31, 2012
Investment Commentary
For the fiscal year ended March 31, 2012, the Pear Tree Polaris Foreign Value Small Cap Fund’s Ordinary Shares (the “Fund”) underperformed its benchmark, the S&P EPAC Small Cap Index (the “Index“). The Fund achieved a return of –8.20% at net asset value compared to –5.99% for the Index.
| Fund Information | ||
| Net Assets Under Management | $93.3 Million | |
| Number of Companies | 68 | |
| Price to Book Ratio | 1.9 | |
| Price to Earnings Ratio | 15.1 | |
| Ordinary | Institutional | |
| Total Expense Ratio (Net) | 1.70% | 1.43% |
| Ticker Symbol | QUSOX | QUSIX |
Market Conditions and Investment Strategies
Macro-economic trends were mixed, with a modest GDP slowdown in China and Indiaoffset by growth in other emerging countries. Pessimistic markets expected cash flows of global companies to slow down, yet the majority of the Fund’s holdings produced strong earnings on a quarterly and yearly basis.
Defensive sector holdings helped mitigate the persistent volatility throughout the year, as the Fund’s Telecommunications, Utilities and Consumer Discretionary stocks posted strong returns. In the Telecommunications sector, Singapore-based M1 LTD and U.K.-based Alternative Networks posted double-digit returns, as both companies gained market share and customers.
In Utilities, Manila Water Company achieved strong annual returns due to rate adjustments, control of operating expenses and a revenue uptick. Equatorial Energia SA, a Brazilian electricity distributor, catered to robust demand in Northwest Brazil.
In Consumer Discretionary, Italian coffee machine company De’Longhi, Canada’s Astral Media and Belgian movie chain Kinepolis contributed to returns. Kinepolis increased its targeted theater marketing campaign, business-to-business plans and real estate development, while reducing debt.
Industrial holdings detracted from Fund performance due to continued slow global trade. During the year, the Fund sold out of seven stocks in this sector mostly due to structural changes in their fundamentals. Among retained holdings, TreviFinanziaria proved to be a fundamentally strong company, with growth in the foundation and oil drilling businesses. However, the stock dropped during the year due to expectations of lower demand and margins in the short term.
India’s Manappuram General Finance suffered losses due to loans collateralized on gold (as gold prices dropped) and recent government regulations. Among other Financials, Sparebanken of Norway experienced positive loan and deposit growth, but its stock declined due to the European debt crisis.
Portfolio Changes
For the fiscal year ended March 31, 2012, the Fund sold holdings in Materials, Industrials, Healthcare and Utilities. A number of Chinese companies were sold on corporate governance concerns although they continued their growth momentum. The Fund also sold stocks that had reached their valuation limits or were subject to takeover bids, redeploying the cash to more defensive names. The Fund purchased seven new companies diversified across industry and country.
PEAR TREE POLARIS FOREIGN VALUE SMALL CAP FUND
A Look Ahead
Over the past year, we witnessed a modest turnaround in investor sentiment, as a spate of good news led to generally positive global equity market performance. The U.S. maintained its tenuous slow growth trajectory, backed by lower unemployment and stabilized housing rates. Cautious optimism must be balanced with concerns about the European debt burden and slowing GDP in many Asian countries.
We still expect slow, volatile and mixed growth in GDP all across the world. We believe our portfolio is well-balanced and positioned for such an outlook. At the same time, we are on the constant lookout for companies that have attractive risk-return profiles in a portfolio management context, and will add to new stocks to the Fund on an opportunistic basis.
The Fund’s lead portfolio manager is Bernard R. Horn, Jr., of Polaris Capital Management, LLC
PEAR TREE COLUMBIA SMALL CAP FUND
Top 10 Holdings
| Percentage of total net assets | 21.7% |
| Manila Water Company, Inc. | 2.4% |
| Dr|$$|Adaegerwerk AG | 2.3% |
| Equatorial Energia S.A. | 2.2% |
| Freenet AG | 2.2% |
| M1 Ltd. | 2.1% |
| Alternative Networks PLC | 2.1% |
| Galliford Try PLC | 2.1% |
| Dockwise Ltd. | 2.1% |
| United Drug PLC | 2.1% |
| VST Holdings Ltd. | 2.1% |
There is no guarantee that such securities will continue to be viewed favorably or held in the Fund’s portfolio.
Sector Allocation
| Percentage of total net assets | 100.0% |
| Consumer Discretionary | 25.3% |
| Consumer Staples | 12.0% |
| Information Technology | 11.6% |
| Industrials | 11.0% |
| Financials | 10.4% |
| Telecommunication Services | 6.5% |
| Health Care | 6.4% |
| Utilities | 6.3% |
| Materials | 6.2% |
| Energy | 2.1% |
| Cash and Other Assets (Net) | 2.2% |
Top 10 Country Allocations
| Percentage of total net assets | 73.2% |
| United Kingdom | 15.3% |
| Japan | 11.7% |
| Hong Kong | 8.2% |
| India | 8.2% |
| Ireland | 7.0% |
| Norway | 5.5% |
| Thailand | 5.0% |
| Germany | 4.5% |
| Sweden | 4.3% |
| Singapore | 3.5% |
Value of a $10,000 Investment
Pear Tree Foreign Value Small Cap (PTFVSC) Ordinary Shares vs. S&P EPAC Small Cap Index
Average Annual Total Returns
| 1Q 2012 | Six Months | One Year | Five Year | Ten Year | Since Inception | Inception Date | |
| Ordinary Shares | 15.20% | 12.64% | –8.20% | 2.07% | 5/1/2008 | ||
Institutional Shares1 | 15.33% | 12.73% | –7.99% | 2.28% | 5/1/2008 | ||
S&P/EPAC Small Cap Index2 | 14.56% | 14.88% | –5.99% | –1.80% |
1 Institutional Shares may only be purchased by certain categories of investors and are not subject to sales charges or distribution fees.
2 The S&P/Europe Pacific Asia Composite (“S&P/EPAC”) Index measures the bottom 20% of institutionary investable capital of developed and emerging (after 09/30/1994) countries, selected by the index sponsor outside of the United States. It is widely recognized as representative of the general market for foreign markets. Index returns assume the reinvestment of dividends and, unlike Fund returns, do no reflect any fees or expenses. You cannot invest directly in an Index. The Index was established in 1989.
Investing in 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 than the U.S. market.
PEAR TREE COLUMBIA SMALL CAP FUND
SCHEDULE OF INVESTMENTS
March 31, 2012
Common Stock—97.0%
| Shares | Value | |
| AIR FREIGHT & LOGISTICS—0.0% | ||
| Echo Global Logistics, Inc. (a) | 1,946 | $ 31,331 |
| BANKS—5.6% | ||
| 1st Source Corporation | 1,241 | 30,367 |
| Capital Bank Corporation (a) | 11,572 | 25,921 |
| Central Pacific Financial Corp. (a) | 2,433 | 31,507 |
| Citizens Republic Bancorp, Inc. (a) | 2,756 | 43,021 |
| CoBiz Financial, Inc. | 95,356 | 674,167 |
| Enterprise Financial Services Corp. | 2,123 | 24,924 |
| First Financial Northwest, Inc. (a) | 5,327 | 41,124 |
| F.N.B. Corporation | 166,616 | 2,012,721 |
| Northeast Bancorp | 1,818 | 21,507 |
| Pinnacle Financial Partners, Inc. (a) | 51,685 | 948,420 |
| Popular, Inc. (a) | 294,943 | 604,633 |
| Provident Financial Holdings, Inc. | 2,689 | 29,391 |
| Republic Bancorp, Inc., Class A | 1,373 | 32,842 |
| Southern Missouri Bancorp, Inc. | 1,398 | 35,789 |
| Susquehanna Bancshares, Inc. | 68,081 | 672,636 |
| United Bankshares, Inc. (b) | 17,339 | 500,404 |
| Virginia Commerce Bancorp, Inc. (a) | 4,066 | 35,700 |
5,765,074 | ||
| BEVERAGES—0.1% | ||
| Coffee Holding Co., Inc. (b) | 4,008 | 45,411 |
| National Beverage Corp. | 1,956 | 31,374 |
| 76,785 | ||
| CHEMICALS—0.1% | ||
| Rentech, Inc. (a) | 23,990 | 49,899 |
| COMMERCIAL SERVICES & SUPPLIES—10.4% | ||
| Acacia Research Corporation—Acacia Technologies (a) | 114,402 | 4,775,140 |
| Advance America, Cash Advance Centers, Inc. | 3,511 | 36,830 |
| American Public Education, Inc. (a) | 727 | 27,626 |
| Brightpoint, Inc. (a) | 2,920 | 23,506 |
| Collectors Universe, Inc. | 2,157 | 37,187 |
| Core-Mark Holding Company, Inc. | 794 | 32,506 |
| GasLog Ltd. (a) | 12,867 | 159,680 |
| Heartland Payment Systems, Inc. | 45,169 | 1,302,674 |
| Hudson Highland Group, Inc. (a) | 6,560 | 35,293 |
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| Insignia Systems, Inc. | 12,663 | 22,920 |
| Kforce, Inc. (a) | 125,366 | 1,867,953 |
| LML Payment Systems, Inc. (a) | 13,487 | 27,379 |
| Perma-Fix Environmental Services, Inc. (a) | 20,275 | $32,237 |
| SeaCube Container Leasing Ltd. | 2,122 | 36,498 |
| Standard Parking Corporation (a) | 1,759 | 36,060 |
| U.S. Ecology, Inc. | 38,541 | 837,881 |
| Waste Connections, Inc. | 40,544 | 1,318,896 |
| Willis Lease Finance Corporation (a) | 2,630 | 34,216 |
10,644,482 | ||
| COMMUNICATIONS EQUIPMENT—1.7% | ||
| NICE-Systems Ltd. (a)(c) | 43,431 | 1,706,838 |
| COMPUTERS & PERIPHERALS—0.0% | ||
| Xyratex Ltd. | 2,359 | 37,532 |
| CONSTRUCTION & ENGINEERING—0.0% | ||
| Primoris Services Corporation | 2,104 | 33,790 |
| DISTRIBUTORS—0.0% | ||
| AMCON Distributing Company | 317 | 19,892 |
| DIVERSIFIED FINANCIALS—4.1% | ||
| BlackRock Kelso Capital Corporation | 3,851 | 37,817 |
| Cascade Bancorp (a) | 6,706 | 38,090 |
| CompuCredit Holdings Corporation (a) | 8,493 | 49,259 |
| Diamond Hill Investment Group, Inc. | 425 | 31,301 |
| EZCORP, Inc., Class A (a) | 23,729 | 770,125 |
| First Cash Financial Services, Inc. (a) | 37,191 | 1,595,122 |
| Fortress Investment Group LLC, Class A | 9,298 | 33,101 |
| Gladstone Investment Corporation | 4,323 | 32,725 |
| Green Dot Corporation, Class A (a) | 29,265 | 776,108 |
| Hanmi Financial Corporation (a) | 4,247 | 42,980 |
| Hercules Technology Growth Capital, Inc. | 60,695 | 672,501 |
| Nicholas Financial, Inc. | 2,452 | 32,342 |
| TexasPacificLand Trust | 773 | 36,447 |
| White River Capital, Inc. | 1,552 | 34,532 |
| 4,182,450 | ||
| DIVERSIFIED TELECOMMUNICATION—0.0% | ||
| Vonage Holdings Corp. (a) | 12,827 | 28,348 |
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| ELECTRONIC EQUIPMENT & INSTRUMENTS—3.4% | ||
| Ascent Solar Technologies, Inc. (a) | 46,288 | 29,161 |
| DDi Corp. | 3,368 | 41,090 |
| Finisar Corporation (a) | 78,378 | 1,579,317 |
| OSI Systems, Inc. (a) | 28,647 | 1,756,061 |
| TESSCO Technologies, Inc. | 2,274 | $57,919 |
3,463,548 | ||
| ENERGY EQUIPMENT & SERVICES—7.2% | ||
| Core Laboratories N.V. | 35,388 | 4,655,999 |
| Dawson Geophysical Company (a) | 40,687 | 1,397,598 |
| Hornbeck Offshore Services, Inc. (a) | 30,145 | 1,266,994 |
| T.G.C. Industries, Inc. (a) | 4,402 | 43,668 |
| 7,364,259 | ||
| FINANCE—1.0% | ||
| Medley Capital Corporation | 63,193 | 712,185 |
| FOOD & DRUG RETAILING—2.2% | ||
| Arden Group, Inc. | 349 | 31,721 |
| Nash Finch Company | 1,073 | 30,495 |
| Pizza Inn Holdings, Inc. (a) | 5,714 | 27,656 |
| Spartan Stores, Inc. | 1,699 | 30,786 |
| United Natural Foods, Inc. (a) | 45,237 | 2,110,758 |
| Village Super Market, Inc. | 1,104 | 34,875 |
| 2,266,291 | ||
| FOOD PRODUCTS—3.6% | ||
| Andersons, Inc. (The) | 32,658 | 1,590,118 |
| Chefs’ Warehouse, Inc. (The) (a) | 1,760 | 40,726 |
| Hain Celestial Group, Inc. (a) | 36,319 | 1,591,135 |
| Roundy’s, Inc. (a) | 43,483 | 465,268 |
| USANA Health Sciences, Inc. (a) | 1,035 | 38,637 |
| 3,725,884 | ||
| HEALTH CARE EQUIPMENT & SUPPLIES—5.8% | ||
| Accuray Incorporated (a) | 56,524 | 399,059 |
| Align Technology, Inc. (a) | 46,186 | 1,272,424 |
| Natus Medical, Inc. (a) | 55,411 | 661,053 |
| SXC Health Solutions Corp. (a) | 35,759 | 2,680,495 |
| Syneron Medical Ltd. (a) | 81,320 | 871,750 |
| 5,884,781 | ||
| HEALTH CARE PROVIDERS & SERVICES—3.3% | ||
| BioScrip, Inc. (a) | 17,591 | 413,564 |
| Catalyst Health Solutions, Inc. (a) | 22,458 | 1,431,248 |
| Henry Schein, Inc. (a) | 20,031 | 1,515,946 |
| Metropolitan Health Networks, Inc. (a) | 4,206 | 39,410 |
| 3,400,168 | ||
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| HOTELS, RESTAURANTS & LEISURE—1.0% | ||
| Caribou Coffee Company, Inc. (a) | 2,253 | $41,996 |
| Great Wolf Resorts, Inc. (a) | 23,839 | 136,359 |
| Multimedia Games Holding Company, Inc. (a) | 3,958 | 43,380 |
| National CineMedia, Inc. | 51,249 | 784,110 |
1,005,845 | ||
| HOUSEHOLD DURABLES—0.5% | ||
| Emerson Radio Corp. (a) | 14,698 | 29,543 |
| M.D.C. Holdings, Inc. | 18,472 | 476,393 |
| U.S. Home Systems, Inc. | 4,725 | 44,037 |
| 549,973 | ||
| INSURANCE—0.0% | ||
| Crawford & Company, Class B | 5,101 | 24,995 |
| INTERNET & CATALOG RETAIL—0.3% | ||
| CafePress, Inc. (a) | 6,025 | 115,379 |
| Insight Enterprises, Inc. (a) | 2,056 | 45,088 |
| NutriSystem, Inc. | 2,430 | 27,289 |
| Overstock.com, Inc. (a) | 4,008 | 21,002 |
| PC Mall, Inc. (a) | 5,004 | 30,074 |
| Systemax, Inc. (a) | 1,915 | 32,287 |
| 271,119 | ||
| INTERNET SOFTWARE & SERVICES—4.8% | ||
| Allot Communications Ltd. (a) | 38,088 | 885,546 |
| Ancestry.com, Inc. (a)(b) | 48,709 | 1,107,643 |
| eGain Communications Corporation (a) | 4,549 | 27,294 |
| ICG Group, Inc. (a) | 121,201 | 1,084,749 |
| LivePerson (a) | 38,481 | 645,326 |
| LogMeIn, Inc. (a) | 33,495 | 1,180,029 |
| 4,930,587 | ||
| IT CONSULTING & SERVICES—6.3% | ||
| Alliance Data Systems Corporation (a) | 33,633 | 4,236,413 |
| Analysts International Corporation (a) | 5,467 | 29,576 |
| Computer Task Group, Inc. (a) | 2,232 | 34,194 |
| Glu Mobile, Inc. (a) | 155,845 | 755,848 |
| InterNAP Network Services Corporation (a) | 174,125 | 1,278,078 |
| Multiband Corporation (a) | 9,730 | 29,287 |
| Wayside Technology Group, Inc. | 2,575 | 36,591 |
| 6,399,987 | ||
| LEISURE EQUIPMENT & PRODUCTS—1.1% | ||
| Artic Cat, Inc. (a) | 13,945 | $597,264 |
| Callaway Golf Company | 72,487 | 490,012 |
| Sturm, Ruger& Co., Inc. | 939 | 46,105 |
1,133,381 | ||
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| MACHINERY—3.8% | ||
| Actuant Corporation | 39,433 | 1,143,163 |
| Argan, Inc. (a) | 2,066 | 33,139 |
| Gardner Denver, Inc. | 34,724 | 2,188,306 |
| Titan International, Inc. | 23,332 | 551,802 |
| 3,916,410 | ||
| MEDIA—5.3% | ||
| Cinemark Holdings, Inc. | 85,813 | 1,883,595 |
| IMAX Corporation (a) | 36,830 | 900,125 |
| Regal Entertainment Group, Class A (b) | 122,258 | 1,662,709 |
| TiVo Inc. (a) | 84,261 | 1,010,289 |
| 5,456,718 | ||
| METALS & MINING—0.1% | ||
| Friedman Industries, Inc. | 2,981 | 32,493 |
| Great Northern IronOre Properties (b) | 285 | 27,372 |
| Mesabi Trust | 1,252 | 38,361 |
| 98,226 | ||
| MULTILINE RETAIL—0.1% | ||
| Fred’’s, Inc., Class A | 2,155 | 31,484 |
| Gordmans Stores, Inc. (a) | 2,500 | 54,925 |
| 86,409 | ||
| OIL & GAS—0.6% | ||
| Abraxas Petroleum Corp. (a)(b) | 124,859 | 389,560 |
| Adams Resources & Energy, Inc. | 1,080 | 61,754 |
| Delek US Holdings, Inc. | 2,754 | 42,715 |
| Matador Resources Company | 331 | 3,624 |
| Natural Gas Services Group, Inc. (a) | 10,744 | 141,821 |
| SMF Energy Corporation | 11,027 | 12,902 |
| 652,376 | ||
| PERSONAL PRODUCTS—0.1% | ||
| Medifast, Inc. (a) | 2,291 | 40,001 |
| Natural Alternatives International, Inc. (a) | 3,555 | 22,218 |
| 62,219 | ||
| PHARMACEUTICALS—2.6% | ||
| Impax Laboratories, Inc. (a) | 61,506 | $1,511,818 |
| Par Pharmaceutical Companies, Inc. (a) | 30,151 | 1,167,748 |
2,679,566 | ||
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| REAL ESTATE—10.6% | ||
| American Campus Communities, Inc. | 32,060 | 1,433,723 |
| Brandywine Realty Trust | 87,196 | 1,001,011 |
| Dynex Capital, Inc. | 3,442 | 32,871 |
| Education Realty Trust, Inc. | 46,514 | 504,212 |
| Entertainment Properties Trust | 87,517 | 4,059,038 |
| Hersha Hospitality Trust | 684,772 | 3,738,855 |
| InterGroup Corporation (a) | 1,548 | 30,914 |
| Newcastle Investment Corp. | 6,758 | 42,440 |
| 10,843,064 | ||
| ROAD & RAIL—1.2% | ||
| Old Dominion Freight Line (a) | 21,778 | 1,038,157 |
| Pacer International, Inc. (a) | 5,874 | 37,124 |
| Quality Distribution, Inc. (a) | 2,793 | 38,488 |
| TravelCenters of America LLC (a) | 7,394 | 46,878 |
| Universal Truckload Services, Inc. | 1,732 | 26,084 |
| 1,186,731 | ||
| SEMICONDUCTOR EQUIPMENT & PRODUCTS—1.7% | ||
| MIPS Technologies, Inc. (a) | 147,788 | 803,967 |
| Nova Measuring Instruments Ltd. (a) | 4,265 | 38,214 |
| Tessera Technologies, Inc. (a) | 53,604 | 924,669 |
| 1,766,850 | ||
| SOFTWARE—1.0% | ||
| Majesco Entertainment Company (a) | 12,880 | 31,814 |
| MicroStrategy, Inc. (a) | 3,706 | 518,840 |
| Verint Systems, Inc. (a) | 13,124 | 425,086 |
| 975,740 | ||
| SPECIALTY RETAIL—1.3% | ||
| Asbury Automotive Group, Inc. (a) | 1,458 | 39,366 |
| hhgregg, Inc. (a) | 2,174 | 24,740 |
| PC Connection, Inc. | 2,834 | 23,296 |
| Pier 1 Imports, Inc. (a) | 60,669 | 1,102,962 |
| Sonic Automotive, Inc., Class A | 2,122 | 38,005 |
| Susser Holdings Corp. (a) | 1,389 | 35,656 |
| Trans World Entertainment Corporation (a) | 8,777 | $ 18,607 |
| Winmark Corporation | 547 | 31,693 |
| 1,314,325 | ||
| TEXTILES & APPAREL—1.5% | ||
| Body Central Corp. (a) | 1,259 | 36,536 |
| DGSE Companies, Inc. (a) | 4,206 | 31,461 |
| Kingold Jewelry, Inc. (a) | 27,277 | 40,916 |
| Liz Claiborne, Inc. (a) | 48,769 | 651,554 |
| Vera Bradley, Inc. (b) | 27,047 | 816,549 |
| 1,577,016 |
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| WIRELESS TELECOMMUNICATION SERVICES—4.6% | ||
| Pendrell Corporation (a) | 12,277 | 32,043 |
| SBA Communications Corp., Class A (a) | 92,526 | 4,701,246 |
| 4,733,289 | ||
| TOTAL COMMON STOCK | ||
| (Cost $73,094,597) | 99,058,363 | |
| Short Term Investments—0.0% | ||
| Par Value | Value | |
| State Street Bank &Trust Co., Repurchase Agreement .01%, 04/02/12, (Dated 03/30/12), Collateralized by $15,000 par U.S. Treasury Note-3.125% due 05/15/2021, Market Value $16,757, Repurchase Proceeds $15,352 (Cost $15,352) | $15,352 | 15,352 |
TOTAL INVESTMENTS (EXCLUDING INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED)—97.0% (Cost $73,109,949) | 99,073,715 | |
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED—4.2% | ||
| Money Market—4.2% | ||
Western Asset Institutional Cash Reserve-Inst. (Cost $4,251,048) | 4,251,048 | 4,251,048 |
TOTAL INVESTMENTS—101.2% (Cost $77,360,997) (d) | 103,324,763 | |
| OTHER ASSETS & LIABILITIES (NET)—(1.2%) | (1,213,657) | |
| NET ASSETS—100% | $102,111,106 | |
The accompanying notes are an integral part of these financial statements.
| (a) | Non-income producing security |
| (b) | All or a portion of this security was out on loan. |
| (c) | ADR—American Depositary Receipts |
| (d) | At March 31, 2012, the unrealized appreciation of investments based on aggregate cost for federal tax purposes of $78,530,868 was as follows: |
| Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost | $26,595,354 |
| Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value | (1,801,459) |
| Net unrealized appreciation / (depreciation) | $24,793,895 |
The accompanying notes are an integral part of these financial statements.
PEAR TREE COLUMBIA MICRO CAP FUND
SCHEDULE OF INVESTMENTS
March 31, 2012
Common Stock—92.9%
| Shares | Value | |
| AIR FREIGHT & LOGISTICS—0.8% | ||
| Echo Global Logistics, Inc. (a) | 2,217 | $35,694 |
| BANKS—9.7% | ||
| 1st Source Corporation | 1,412 | 34,552 |
| Capital Bank Corporation (a) | 17,145 | 38,405 |
| Central Pacific Financial Corp. (a) | 2,772 | 35,897 |
| Citizens Republic Bancorp, Inc. (a) | 3,142 | 49,047 |
| Enterprise Financial Services Corp. | 2,420 | 28,411 |
| First Financial Northwest, Inc. (a) | 6,070 | 46,860 |
| Northeast Bancorp | 2,500 | 29,575 |
| Provident Financial Holdings, Inc. | 3,729 | 40,758 |
| Republic Bancorp, Inc., Class A | 1,564 | 37,411 |
| Southern Missouri Bancorp, Inc. | 1,594 | 40,806 |
| Virginia Commerce Bancorp, Inc. (a) | 4,633 | 40,678 |
422,400 | ||
| BEVERAGES—2.0% | ||
| Coffee Holding Co., Inc. | 4,568 | 51,755 |
| National Beverage Corp. | 2,229 | 35,753 |
| 87,508 | ||
| CHEMICALS—1.3% | ||
| Rentech, Inc. (a) | 27,337 | 56,861 |
| COMMERCIAL SERVICES & SUPPLIES—11.1% | ||
| Advance America, Cash Advance Centers, Inc. | 4,002 | 41,981 |
| American Public Education, Inc. (a) | 827 | 31,426 |
| Brightpoint, Inc. (a) | 3,328 | 26,790 |
| Collectors Universe, Inc. | 2,457 | 42,359 |
| Core-Mark Holding Company, Inc. | 904 | 37,010 |
| Heartland Payment Systems, Inc. | 1,471 | 42,424 |
| Hudson Highland Group, Inc. (a) | 7,477 | 40,226 |
| Insignia Systems, Inc. | 17,325 | 31,358 |
| LML Payment Systems, Inc. (a) | 15,370 | 31,201 |
| Perma-Fix Environmental Services, Inc. (a) | 23,105 | 36,737 |
| SeaCube Container Leasing Ltd. | 2,419 | 41,607 |
| Standard Parking Corporation (a) | 2,004 | 41,082 |
| Willis Lease Finance Corporation (a) | 2,997 | 38,991 |
| 483,192 | ||
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| COMPUTERS & PERIPHERALS—1.0% | ||
| Xyratex Ltd. | 2,689 | 42,782 |
| CONSTRUCTION & ENGINEERING—0.9% | ||
| Primoris Services Corporation | 2,399 | $38,528 |
| DISTRIBUTORS—0.6% | ||
| AMCON Distributing Company | 409 | 25,665 |
| DIVERSIFIED FINANCIALS—9.7% | ||
| BlackRock Kelso Capital Corporation | 4,388 | 43,090 |
| Cascade Bancorp (a) | 8,099 | 46,002 |
| CompuCredit Holdings Corporation (a) | 9,679 | 56,138 |
| Diamond Hill Investment Group, Inc. | 484 | 35,647 |
| Fortress Investment Group LLC, Class A | 10,596 | 37,722 |
| Gladstone Investment Corporation | 4,926 | 37,290 |
| Hanmi Financial Corporation (a) | 4,839 | 48,971 |
| Nicholas Financial, Inc. | 2,794 | 36,853 |
| TexasPacificLand Trust | 881 | 41,539 |
| White River Capital, Inc. | 1,769 | 39,360 |
422,612 | ||
| DIVERSIFIED TELECOMMUNICATION—0.7% | ||
| Vonage Holdings Corp. (a) | 14,618 | 32,306 |
| ELECTRONIC EQUIPMENT& INSTRUMENTS—3.9% | ||
| Ascent Solar Technologies, Inc. (a) | 86,147 | 54,273 |
| DDi Corp. | 3,839 | 46,836 |
| TESSCO Technologies, Inc. | 2,592 | 66,018 |
| 167,127 | ||
| ENERGY EQUIPMENT & SERVICES—1.2% | ||
| T.G.C. Industries, Inc. (a) | 5,016 | 49,759 |
| FOOD & DRUG RETAILING—4.1% | ||
| Arden Group, Inc. | 398 | 36,174 |
| Nash Finch Company | 1,223 | 34,758 |
| Pizza Inn Holdings, Inc. (a) | 6,511 | 31,513 |
| Spartan Stores, Inc. | 1,935 | 35,062 |
| Village Super Market, Inc. | 1,259 | 39,772 |
| 177,279 | ||
| FOOD PRODUCTS—2.1% | ||
| Chefs’ Warehouse, Inc. (The) (a) | 2,005 | 46,396 |
| USANA Health Sciences, Inc. (a) | 1,179 | 44,012 |
| 90,408 | ||
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| HEALTH CARE PROVIDERS & SERVICES—1.0% | ||
| Metropolitan Health Networks, Inc. (a) | 4,794 | 44,920 |
| HOTELS, RESTAURANTS & LEISURE—2.2% | ||
| Caribou Coffee Company, Inc. (a) | 2,567 | $47,849 |
| Multimedia Games Holding Company, Inc. (a) | 4,511 | 49,440 |
| 97,289 | ||
| HOUSEHOLD DURABLES—2.2% | ||
| Emerson Radio Corp. (a) | 21,684 | 43,585 |
| U.S. Home Systems, Inc. | 5,385 | 50,188 |
| 93,773 | ||
| INSURANCE—0.7% | ||
| Crawford & Company, Class B | 5,814 | 28,489 |
| INTERNET & CATALOG RETAIL—4.0% | ||
| Insight Enterprises, Inc. (a) | 2,194 | 48,114 |
| NutriSystem, Inc. | 2,770 | 31,107 |
| Overstock.com, Inc. (a) | 4,568 | 23,936 |
| PC Mall, Inc. (a) | 5,703 | 34,275 |
| Systemax, Inc. (a) | 2,182 | 36,789 |
174,221 | ||
| INTERNET SOFTWARE & SERVICES—0.7% | ||
| eGain Communications Corporation (a) | 5,183 | 31,098 |
| IT CONSULTING & SERVICES—3.4% | ||
| Analysts International Corporation (a) | 6,390 | 34,570 |
| Computer Task Group, Inc. (a) | 2,544 | 38,974 |
| Multiband Corporation (a) | 11,087 | 33,372 |
| Wayside Technology Group, Inc. | 2,936 | 41,720 |
| 148,636 | ||
| LEISURE EQUIPMENT & PRODUCTS—1.2% | ||
| Sturm, Ruger& Co., Inc. | 1,071 | 52,586 |
| MACHINERY—0.9% | ||
| Argan, Inc. (a) | 2,354 | 37,758 |
| METALS & MINING—2.6% | ||
| Friedman Industries, Inc. | 3,398 | 37,038 |
| Great Northern IronOre Properties | 325 | 31,213 |
| Mesabi Trust | 1,426 | 43,693 |
| 111,944 | ||
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| MULTILINE RETAIL—2.3% | ||
| Fred’’s, Inc., Class A | 2,456 | 35,882 |
| Gordmans Stores, Inc. (a) | 2,849 | 62,593 |
| 98,475 | ||
| OIL & GAS—3.1% | ||
| Adams Resources & Energy, Inc. | 1,231 | $70,389 |
| Delek US Holdings, Inc. | 3,138 | 48,670 |
| SMF Energy Corporation | 12,565 | 14,701 |
133,760 | ||
| PERSONAL PRODUCTS—1.6% | ||
| Medifast, Inc. (a) | 2,610 | 45,570 |
| Natural Alternatives International, Inc. (a) | 4,051 | 25,319 |
| 70,889 | ||
| REAL ESTATE—2.9% | ||
| Dynex Capital, Inc. | 3,922 | 37,455 |
| InterGroup Corporation (a) | 1,957 | 39,081 |
| Newcastle Investment Corp. | 7,701 | 48,362 |
| 124,898 | ||
| ROAD & RAIL—3.9% | ||
| Pacer International, Inc. (a) | 6,694 | 42,306 |
| Quality Distribution, Inc. (a) | 3,183 | 43,862 |
| TravelCenters of America LLC (a) | 8,427 | 53,427 |
| Universal Truckload Services, Inc. | 1,974 | 29,728 |
| 169,323 | ||
| SEMICONDUCTOR EQUIPMENT & PRODUCTS—1.0% | ||
| Nova Measuring Instruments Ltd. (a) | 4,859 | 43,537 |
| SOFTWARE—0.8% | ||
| Majesco Entertainment Company (a) | 14,677 | 36,252 |
| SPECIALTY RETAIL—5.6% | ||
| Asbury Automotive Group, Inc. (a) | 1,662 | 44,874 |
| hhgregg, Inc. (a) | 2,478 | 28,200 |
| PC Connection, Inc. | 3,229 | 26,542 |
| Sonic Automotive, Inc., Class A | 2,419 | 43,324 |
| Susser Holdings Corp. (a) | 1,583 | 40,636 |
| Trans World Entertainment Corporation (a) | 10,824 | 22,947 |
| Winmark Corporation | 624 | 36,154 |
| 242,677 | ||
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| TEXTILES & APPAREL—2.9% | ||
| Body Central Corp. (a) | 1,436 | 41,673 |
| DGSE Companies, Inc. (a) | 4,794 | 35,859 |
| Kingold Jewelry, Inc. (a) | 31,366 | 47,049 |
| 124,581 | ||
| WIRELESS TELECOMMUNICATION SERVICES—0.8% | ||
| Pendrell Corporation (a) | 13,990 | $36,514 |
| TOTAL COMMON STOCK | ||
| (Cost $3,673,622) | 4,033,741 | |
| Exchange Traded Funds—4.3% | ||
| iShares Russell Microcap Index | ||
| (Cost $185,313) | 3,601 | 185,091 |
| Short Term Investments—4.6% | ||
| Par Value | Value | |
| State Street Bank &Trust Co., Repurchase Agreement .01%, 04/02/12, (Dated 03/30/12), Collateralized by $185,000 par U.S. Treasury Note-3.125% due 05/15/2021, Market Value $206,664, Repurchase Proceeds $198,431 (Cost $198,431) | $198,431 | 198,431 |
TOTAL INVESTMENTS—101.8% (Cost $4,057,366) (b) | 4,417,263 | |
| OTHER ASSETS & LIABILITIES (NET)—(1.8%) | (73,373) | |
| NET ASSETS—100% | $4,343,890 | |
| (a) | Non-income producing security |
| (b) | At March 31, 2012, the unrealized appreciation of investments based on aggregate cost for federal tax purposes of $4,057,228 was as follows: |
| Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost | $491,481 |
| Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value | (131,446) |
| Net unrealized appreciation / (depreciation) | $360,035 |
The accompanying notes are an integral part of these financial statements.
PEAR TREE QUALITY FUND
SCHEDULE OF INVESTMENTS
March 31, 2012
Common Stock—99.1%
| Shares | Value | |
| AEROSPACE & DEFENSE—0.0% | ||
| United Technologies Corporation | 45 | $ 3,732 |
| BEVERAGES—5.5% | ||
| Anheuser-Busch InBev SA (b) | 8,876 | 645,463 |
| Coca-Cola Company (The) | 52,962 | 3,919,717 |
| Monster Beverage Corporation (a) | 10,119 | 628,289 |
| 5,193,469 | ||
| COMMUNICATIONS EQUIPMENT—1.5% | ||
| QUALCOMM Incorporated | 20,615 | 1,402,232 |
| COMPUTERS & PERIPHERALS—8.1% | ||
| Apple, Inc. (a) | 7,406 | 4,439,675 |
| Hewlett-Packard Company | 45,641 | 1,087,625 |
| International Business Machines | 10,398 | 2,169,543 |
| 7,696,843 | ||
| FOOD PRODUCTS—3.1% | ||
| Nestle, S.A. (b) | 18,243 | 1,149,309 |
| Unilever NA (b) | 52,231 | 1,777,421 |
| 2,926,730 | ||
| FOOD STAPLES & DRUG RETAILING—6.3% | ||
| PepsiCo, Inc. | 32,883 | 2,181,787 |
| SYSCO Corporation | 9,994 | 298,421 |
| Wal-Mart Stores, Inc. | 47,977 | 2,936,193 |
| Walgreen Co. | 17,156 | 574,554 |
| 5,990,955 | ||
| HEALTH CARE EQUIPMENT & SERVICES—5.0% | ||
| Baxter International Inc. | 212 | 12,673 |
| Express Scripts, Inc. (a) | 22,760 | 1,233,137 |
| Intuitive Surgical, Inc. (a) | 53 | 28,713 |
| Medtronic, Inc. | 26,389 | 1,034,185 |
| UnitedHealth Group, Inc. | 30,738 | 1,811,698 |
| Zimmer Holdings, Inc. (a) | 10,195 | 655,334 |
| 4,775,740 | ||
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| HEALTH CARE PROVIDERS & SERVICES—0.4% | ||
| Cerner Corporation (a) | 173 | 13,176 |
| Henry Schein, Inc. (a) | 1,429 | 108,147 |
| Laboratory Corporation of America Holdings (a) | 328 | 30,025 |
| Lincare Holdings, Inc. | 2,846 | 73,654 |
| Quest Diagnostics Incorporated | 1,707 | 104,383 |
| WellPoint, Inc. | 163 | 12,029 |
| 341,414 | ||
| HOTELS, RESTAURANTS &LEISURE—0.5% | ||
| McDonald’s Corporation | 4,672 | $458,323 |
| HOUSEHOLD PRODUCTS—3.9% | ||
| Church & Dwight Co., Inc. | 3,386 | 166,557 |
| Colgate-Palmolive Company | 14,440 | 1,411,943 |
| Procter & Gamble Company | 31,074 | 2,088,484 |
| 3,666,984 | ||
| INDUSTRIAL CONGLOMERATES—0.1% | ||
| 3M Company | 1,336 | 119,185 |
| MULTILINE RETAIL—1.2% | ||
| Target Corporation | 20,584 | 1,199,430 |
| OIL & GAS—11.2% | ||
| BP plc (b) | 52,417 | 2,358,765 |
| Chevron Corporation | 26,383 | 2,829,313 |
| Exxon Mobil Corporation | 24,761 | 2,147,522 |
| Royal Dutch Shell plc (b) | 30,196 | 2,117,645 |
| TOTAL S.A. (b) | 23,521 | 1,202,393 |
| 10,655,638 | ||
| PHARMACEUTICALS &BIOTECHNOLOGY—18.4% | ||
| Abbott Laboratories | 35,404 | 2,169,911 |
| Amgen, Inc. | 14,510 | 986,535 |
| AstraZeneca PLC (b) | 11,605 | 516,306 |
| Bristol-Myers Squibb Company | 251 | 8,471 |
| Eli Lilly and Company | 5,780 | 232,761 |
| Gilead Sciences, Inc. (a) | 2,164 | 105,711 |
| GlaxoSmithKline plc (b) | 41,925 | 1,882,852 |
| Johnson & Johnson | 72,823 | 4,803,405 |
| Merck & Co., Inc. | 34,588 | 1,328,179 |
| Novartis AG (b) | 19,353 | 1,072,350 |
| Pfizer, Inc. | 161,263 | 3,654,220 |
| Roche Holding Ltd (b) | 5,825 | 254,203 |
| Sanofi-Aventis (b) | 11,336 | 439,270 |
| Takeda Pharmaceutical Company Limited (b) | 4,366 | 96,052 |
| 17,550,226 | ||
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| SOFTWARE & SERVICES—22.7% | ||
| Cisco Systems, Inc. | 245,018 | 5,182,131 |
| Google, Inc. (a) | 6,097 | 3,909,640 |
| MasterCard Incorporated | 2,246 | 944,533 |
| Microsoft Corporation | 183,694 | 5,924,132 |
| Oracle Corporation (a) | 121,784 | 3,551,221 |
| SAP AG (b) | 12,217 | 852,991 |
| Visa, Inc. | 10,097 | $1,191,446 |
| Yahoo! Inc. (a) | 402 | 6,118 |
| 21,562,212 | ||
| SPECIALTY RETAIL—1.2% | ||
| Lowe’s Companies, Inc. | 36,525 | 1,146,155 |
| TEXTILES & APPAREL—1.3% | ||
| Nike, Inc. | 11,095 | 1,203,142 |
| TOBACCO—8.7% | ||
| Altria Group, Inc. | 846 | 26,116 |
| British American Tobacco p.l.c. (b) | 25,052 | 2,535,764 |
| Lorillard, Inc. | 4,959 | 642,091 |
| Philip Morris International, Inc. | 57,858 | 5,126,797 |
| Reynolds American, Inc. | 69 | 2,860 |
| 8,333,628 | ||
| WIRELESS TELECOMMUNICATIONS—0.0% | ||
| NTT DOCOMO, Inc. (b) | 457 | 7,618 |
| TOTAL COMMON STOCK | ||
| (Cost $84,044,635) | 94,233,656 | |
| Short Term Investments—0.3% | ||
| Par Value | Value | |
| State Street Bank & Trust Co., Repurchase Agreement .01%, 04/02/12, (Dated 03/30/12), Collateralized by 255,000 par U.S. Treasury Note-3.125% due 05/15/2021, Market Value $284,861, Repurchase Proceeds $276,268 (Cost $276,268) | $276,268 | 276,268 |
| TOTAL SHORT TERM INVESTMENTS—0.3% | 276,268 | |
TOTAL INVESTMENTS—99.4% (Cost $84,320,903) (c) | 94,509,924 | |
| OTHER ASSETS & LIABILITIES (NET)—0.6% | 605,434 | |
| NET ASSETS—100% | $95,115,358 | |
The accompanying notes are an integral part of these financial statements.
| (a) | Non-Income producing security |
| (b) | ADR—American Depositary Receipts |
| (c) | At March 31, 2012, the unrealized appreciation of investments based on aggregate cost for federal tax purposes of $84,912,182 was as follows: |
| Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost | $10,532,194 |
| Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value | (934,452) |
| Net unrealized appreciation / (depreciation) | $9,597,742 |
| The percentage of each investment category is calculated as a percentage of net assets. |
The accompanying notes are an integral part of these financial statements.
PEAR TREE PANAGORA DYNAMIC EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
March 31, 2012
Common Stock—93.7%
| Shares | Value | |
| BRAZIL—8.1% | ||
| Banco do Brasil SA | 102,010 | $1,453,365 |
| BM&F Bovespa SA | 205,725 | 1,269,545 |
| Companhia de Bebidas das Americas (c) | 9,172 | 702,759 |
| Companhia de SaneamentoBasico (c) | 44,669 | 1,845,723 |
| Cosan SA Industria e Comercio | 34,535 | 643,905 |
| EZ TEC Empreendimentos e Participacoes SA | 24,935 | 308,025 |
| Gerdau SA (c) | 11,062 | 106,527 |
| ObrasconHuarte Lain Brasil SA | 5,020 | 212,194 |
| PetroleoBrasileiro SA | 92,583 | 1,235,186 |
| PetroleoBrasileiro SA (c) | 87,485 | 2,236,117 |
| Sao Martinho SA | 14,418 | 185,153 |
| Sul America SA | 85,383 | 801,608 |
| Tele Norte LesteParticipacoes SA (c) | 60,130 | 682,475 |
| Vale SA | 59,853 | 1,409,736 |
13,092,318 | ||
| CHILE—1.8% | ||
| BancoSantanderChile (c) | 8,379 | 721,348 |
| CompaniaCerveceriasUnidas SA (c) | 6,908 | 543,591 |
| Enersis SA (c) | 42,207 | 852,159 |
| Lan Airlines SA (b)(c) | 26,892 | 782,288 |
| 2,899,386 | ||
| CHINA—11.1% | ||
| Bank of China Ltd., Class H | 4,945,902 | 1,987,470 |
| China Communications Construction Co., Ltd., Class H (a) | 681,680 | 681,307 |
| China Construction Bank Corporation | 3,558,733 | 2,754,675 |
| China Petroleum & Chemical Corporation | 1,722,000 | 1,874,090 |
| China Pharmaceutical Group Limited | 831,011 | 190,514 |
| China Shenhua Energy Co., Ltd. | 252,105 | 1,061,768 |
| China Yuchai International Ltd. | 23,261 | 369,152 |
| Dongfeng Motor Group Company Limited | 808,881 | 1,458,523 |
| Giant Interactive Group, Inc. (b)(c) | 47,823 | 234,333 |
| Great Wall Motor Co., Ltd. (b) | 799,500 | 1,556,936 |
| Guangzhou R&F Properties Co., Ltd., Class H (b) | 226,623 | 276,119 |
| Haitian International Holdings Ltd. | 59,020 | 66,209 |
| Harbin Power Equipment Company Limited, Class H | 444,945 | 465,332 |
| Industrial & Commercial Bank of China Ltd. | 2,505,676 | 1,616,825 |
| Inner Mongolia Yitai Coal Co., Ltd., Class B | 178,300 | 951,765 |
| Lianhua Supermarket Holdings Co., Ltd. | 151,699 | 172,522 |
| PetroChina Company Limited | 1,435,778 | 2,023,043 |
| Tencent Holdings Limited | 1,600 | 44,676 |
| 17,785,259 |
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| CZECH REPUBLIC—0.9% | ||
| CEZ AS | 19,111 | $819,846 |
| KomercniBankaAS | 2,715 | 539,838 |
1,359,684 | ||
| HONG KONG—6.2% | ||
| Central China Real Estate Ltd. | 574,196 | 136,815 |
| China Mobile Limited | 180,779 | 1,989,576 |
| China Unicom (Hong Kong) Ltd. | 884,000 | 1,491,503 |
| China Zhongwang Holdings Limited | 278,800 | 99,466 |
| CNOOC Limited | 1,406,777 | 2,891,736 |
| COSCO International Holdings Ltd. | 205,193 | 88,533 |
| Dairy Farm International Holdings Limited | 5,400 | 56,376 |
| Lenovo Group Limited | 1,315,489 | 1,180,920 |
| Renhe Commercial Holdings (b) | 3,345,455 | 232,675 |
| Skyworth Digital Holdings Limited | 1,854,000 | 864,408 |
| Soho China Limited | 1,266,479 | 918,347 |
| Yuexiu Real Estate Investment Trust | 120,088 | 62,331 |
| 10,012,686 | ||
| HUNGARY—0.2% | ||
| Egis GyogyszergyarNyrt. | 1,899 | 125,744 |
| Richter GedeonNyrt. | 1,411 | 241,517 |
| 367,261 | ||
| INDIA—5.0% | ||
| Allahabad Bank | 29,921 | 109,241 |
| Andhra Bank | 303,910 | 709,889 |
| Bajaj Holdings & Investment Limited | 14,136 | 226,143 |
| Bank of Baroda | 19,608 | 306,754 |
| Chambal Fertilizers & Chemicals Ltd. | 393,422 | 596,176 |
| Gitanjali Gems Limited | 90,455 | 572,168 |
| Grasim Industries Limited | 10,793 | 552,944 |
| Gujarat Mineral Development Corporation Ltd. | 23,414 | 83,278 |
| Gujarat State Fertilisers& Chemicals Limited | 6,398 | 53,387 |
| Indiabulls Financial Services Limited | 178,931 | 723,697 |
| Indian Bank | 146,231 | 686,305 |
| Oil and Natural Gas Corp. Limited | 197,980 | 1,042,849 |
| Oil India Limited | 8,035 | 79,017 |
| Patni Computer Systems (a) | 45,400 | 440,232 |
| South Indian Bank Limited | 458,831 | 222,458 |
| Syndicate Bank | 166,229 | 362,020 |
| Tata Chemicals Ltd. | 34,131 | 231,537 |
| TVS Motor Company Ltd. | 155,385 | 124,137 |
| UCO Bank | 126,563 | $197,130 |
| United Phosphorus, Inc. | 261,210 | 665,523 |
7,984,885 | ||
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| INDONESIA—2.8% | ||
| PT Aneka Tambang Tbk | 2,183,989 | 429,919 |
| PT Astra Agro Lestari Tbk | 239,148 | 610,685 |
| PT Astra International Tbk | 88,265 | 713,823 |
| PT Bank BukopinTbk | 3,526,000 | 254,501 |
| PT Charoen Pokphand IndonesiaTbk | 3,124,514 | 939,678 |
| PT Indo TambangrayaMegahTbk | 29,620 | 140,747 |
| PT JapfaComfeedIndonesiaTbk | 2,865,340 | 900,903 |
| PT PP London Sumatra IndonesiaTbk | 358,000 | 161,499 |
| PT Sampoerna Agro Tbk | 452,953 | 177,090 |
| PT Vale IndonesiaTbk | 541,000 | 199,680 |
| 4,528,525 | ||
| ISRAEL—0.5% | ||
| First International Bank of Israel Ltd. (a) | 5,585 | 60,435 |
| Mizrahi Tefahot Bank Ltd. | 74,770 | 674,307 |
| 734,742 | ||
| MALAYSIA—4.2% | ||
| Affin Holdings Berhad | 191,000 | 188,911 |
| Berjaya Sports Toto Berhad | 144,384 | 205,960 |
| British American Tobacco (Malaysia) Berhad | 19,140 | 353,748 |
| DiGi.Com Berhad | 727,307 | 963,887 |
| DRB-HICOM Berhad | 1,080,499 | 888,806 |
| GentingMalaysiaBerhad | 730,105 | 934,229 |
| Hong Leong Bank Berhad | 123,093 | 494,220 |
| KLCC Property Holdings Berhad | 78,800 | 87,456 |
| Kuala Lumpur Kepong Berhad | 60,500 | 485,817 |
| Kulim (Malaysia) Berhad | 186,000 | 253,788 |
| Lafarge Malayan Cement Berhad | 54,580 | 128,277 |
| Malayan Banking Berhad | 60,129 | 174,096 |
| MalaysiaBuilding Society Berhad | 559,412 | 398,080 |
| Parkson Holdings Berhad | 169,900 | 297,817 |
| SapuraCrest Petroleum Berhad | 128,561 | 204,791 |
| Telekom MalaysiaBerhad | 337,435 | 585,981 |
| UMW Holdings | 21,901 | 52,188 |
| 6,698,052 | ||
| MEXICO—3.7% | ||
| Alfa S.A.B., Series A | 111,450 | $1,602,190 |
| America Movil S.A.B. de C.V., Series L | 1,043,921 | 1,297,115 |
| FomentoEconomicoMexicano S.A.B. (c) | 14,943 | 1,229,361 |
| GRUMA, S.A.B. de C.V., Series B (a) | 218,007 | 580,220 |
| GrupoHerdez, S. A. B. de C. V., Series * | 31,891 | 65,960 |
| Grupo Mexico S.A.B. de C.V., Series B | 310,598 | 979,372 |
| Industrias CH, S.A.B. de C.V., Series B (a) | 29,088 | 139,169 |
| OrganizacionSoriana S.A.B. de C.V., Series B (a) | 20,130 | 58,147 |
5,951,534 | ||
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| PERU—0.3% | ||
| Banco Continental S.A. | 86,167 | 219,740 |
| Intergroup Financial Services Corp. | 5,424 | 178,992 |
| SociedadMinera Cerro Verde S.A.A. (a) | 3,503 | 147,476 |
| 546,208 | ||
| PHILIPPINES—0.1% | ||
| Rizal Commercial Banking Corporation | 66,700 | 65,092 |
| Universal Robina Corporation | 87,615 | 128,561 |
| 193,653 | ||
| POLAND—2.1% | ||
| KGHM PolskaMiedz SA | 32,107 | 1,477,026 |
| PolskiKoncernNaftowy ORLEN SA (a) | 80,899 | 971,365 |
| PolskieGornictwoNaftoweiGazownictwo SA | 729,421 | 947,346 |
| 3,395,737 | ||
| RUSSIA—5.5% | ||
| Gazprom (c) | 249,033 | 3,038,202 |
| LUKoil (c) | 42,747 | 2,573,369 |
| Norilsk Nickel Mining and Metallurgical Co. (c) | 60,472 | 1,106,638 |
| Sberbank of Russia (a)(c) | 114,553 | 1,533,865 |
| Severstal (d) | 41,178 | 548,491 |
| 8,800,565 | ||
| SINGAPORE—0.8% | ||
| Sembcorp Marine Ltd. | 54,383 | 228,371 |
| Yangzijiang Shipbuilding Holdings Limited (b) | 1,002,413 | 1,060,333 |
| 1,288,704 | ||
| SOUTH AFRICA—7.2% | ||
| Adcock Ingram Holdings Ltd. | 41,794 | $320,344 |
| Barloworld Limited | 80,180 | 1,046,752 |
| Exxaro Resources Ltd. | 32,997 | 853,669 |
| FirstRand Limited | 368,007 | 1,138,857 |
| Fountainhead Property Trust Management Ltd. | 44,420 | 42,342 |
| Gold Fields Ltd. (c) | 75,297 | 1,046,628 |
| Imperial Holdings Limited | 68,943 | 1,395,361 |
| Investec Limited | 137,735 | 848,170 |
| Kumba Iron Ore Limited (b) | 14,809 | 1,017,226 |
| Liberty Holdings Limited | 76,528 | 904,344 |
| MTN Group Limited | 13,100 | 230,959 |
| Reunert Limited | 31,269 | 285,810 |
| RMB Holdings Ltd. | 264,440 | 1,079,742 |
| Sasol Ltd. | 28,681 | 1,387,546 |
11,597,750 | ||
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| SOUTH KOREA—14.8% | ||
| BS Financial Group, Inc. | 32,097 | 376,762 |
| CJ Corporation | 11,865 | 892,192 |
| CJ CheilJedang Corp. | 1,210 | 358,819 |
| Daelim Industrial Co., Ltd. | 5,988 | 647,394 |
| Daesang Corporation | 25,243 | 349,777 |
| Daishin Securities Company | 17,151 | 168,021 |
| Daou Technology, Inc. | 36,739 | 426,387 |
| Daum Communications Corp. | 3,943 | 414,467 |
| GS Home Shopping, Inc. | 2,010 | 199,395 |
| Halla Climate Control Corp. | 23,544 | 458,184 |
| Hana Financial Group, Inc. | 22,503 | 848,046 |
| Hynix Semiconductor, Inc. (a) | 41,350 | 1,067,462 |
| Hyundai Department Store Co., Ltd. | 1,834 | 281,643 |
| Hyundai Hysco Co., Ltd. | 9,760 | 345,418 |
| Hyundai Motor Company | 11,300 | 2,323,728 |
| Kia Motors Corporation | 11,004 | 719,647 |
| Korea Exchange Bank | 79,070 | 604,339 |
| KP Chemical Corp. | 17,959 | 244,885 |
| KT&G Corporation | 15,964 | 1,132,788 |
| Meritz Fire & Marine Insurance Co., Ltd. | 5,460 | 62,163 |
| NEOWIZ Games Corporation (a) | 3,906 | 121,001 |
| Nong Shim Co., Ltd. | 3,230 | 648,537 |
| Pohang Iron and Steel Company (POSCO) | 120 | 40,245 |
| Samsung Electronics Co., Ltd. | 6,358 | $7,154,539 |
| Shinhan Financial Group Co., Ltd. | 29,761 | 1,149,150 |
| SK Chemicals Co., Ltd. | 5,182 | 292,704 |
| SK Holdings Co., Ltd. | 7,322 | 953,175 |
| SK Networks Co., Ltd. | 84,270 | 777,213 |
| SK Telecom Co., Ltd. (c) | 51,628 | 718,145 |
23,776,226 | ||
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| TAIWAN—13.7% | ||
| ASUSTeK Computer, Inc. | 161,040 | 1,519,580 |
| Chicony Electronics Co., Ltd. | 137,460 | 270,128 |
| Chunghwa Telecom Co., Ltd. | 501,600 | 1,544,849 |
| Compal Electronics, Inc. | 766,765 | 862,512 |
| E Ink Holdings Inc. | 552,100 | 722,054 |
| Farglory Land Development Co., Ltd. | 374,436 | 753,579 |
| FengHsin Iron & Steel Co., Ltd. | 103,000 | 181,121 |
| Formosa Chemicals & Fiber Corporation | 251,000 | 733,070 |
| Highwealth Construction Corp. | 203,645 | 353,271 |
| Hon Hai Precision Industry Co., Ltd. | 535,817 | 2,078,675 |
| Inventec Corporation | 290,981 | 127,673 |
| Lite-On Technology Corp. | 833,676 | 1,008,394 |
| Pegatron Corporation | 863,416 | 1,345,682 |
| Phison Electronics Corp. | 138,015 | 1,180,734 |
| Pou Chen Corporation | 885,631 | 769,670 |
| President Chain Store Corp. | 109,915 | 610,753 |
| Radiant Opto-Electronics Corporation | 254,360 | 1,128,976 |
| SoftWorld International Corp. | 154,998 | 348,180 |
| Standard Foods Corporation | 113,000 | 384,777 |
| Taiwan Semiconductor Manufacturing Co., Ltd. | 876,270 | 2,520,636 |
| TECO Electric & Machinery Co., Ltd. | 1,242,983 | 857,026 |
| TSRC Corporation (a) | 320,000 | 818,581 |
| U-Ming Marine Transport Corporation | 135,246 | 233,242 |
| Uni-President Enterprises Corporation | 612,680 | 847,989 |
| United Microelectronics Corporation | 1,432,401 | 701,289 |
| Yageo Corporation | 378,737 | 113,822 |
| 22,016,263 | ||
| THAILAND—2.4% | ||
| Bangkok Bank PCL (e) | 157,436 | 944,106 |
| Big C Supercenter PCL | 52,800 | 280,687 |
| CP ALL PCL | 422,151 | 896,301 |
| Kiatnakin Bank PCL | 199,500 | 239,271 |
| Krung Thai Bank PCL | 1,067,791 | $605,716 |
| Siam Commercial Bank PCL | 160,297 | 745,628 |
| SiamMakro PCL | 18,895 | 219,268 |
3,930,977 | ||
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| TURKEY—2.3% | ||
| ArcelikAS | 125,377 | 559,684 |
| EisEczacibasiIlacVe Sinai | 131,796 | 154,476 |
| Ford OtomotivSanayiAS | 27,935 | 263,190 |
| Tekfen Holding AS | 57,812 | 200,363 |
| Tofas Turk OtomobilFabrikasiAS | 158,766 | 678,461 |
| Tupras—Turkiye Petrol RafinerileriAS | 40,560 | 1,034,955 |
| TurkiyeSiseve Cam Fabrikalari AS | 379,997 | 722,424 |
| UlkerBiskuviSanayi AS | 28,244 | 89,334 |
| 3,702,887 | ||
| TOTAL COMMON STOCK | ||
| (Cost $138,188,873) | 150,663,302 | |
| Preferred Stock—5.6% | ||
| BRAZIL—5.6% | ||
| BancoBradesco SA | 28,909 | 506,154 |
| Banco do Estado do Rio Grande do Sul SA | 96,944 | 1,048,532 |
| EletropauloMetropolitana SA | 42,180 | 889,268 |
| ItauUnibanco Holding SA | 49,263 | 944,744 |
| Klabin SA | 279,686 | 1,296,008 |
| MetalurgicaGerdau SA | 76,820 | 948,546 |
| RandonParticipacoes SA | 54,011 | 348,726 |
| SuzanoPapel e Celulose SA | 95,146 | 407,977 |
| Vale SA, Class A | 114,371 | 2,603,395 |
| TOTAL PREFERRED STOCK | ||
| (Cost $9,081,527) | 8,993,350 | |
| Exchange Traded Funds—0.1% | ||
| United States—0.1% | ||
| Vanguard MSCI Emerging Markets ETF | ||
| (Cost $177,684) | 4,011 | 174,358 |
The accompanying notes are an integral part of these financial statements.
Short Term Investments—0.4%
| Par Value | Value | |
| State Street Bank & Trust Co., Repurchase Agreement .01%, 04/02/12, (Dated 03/30/12), Collateralized by $580,000 par U.S. Treasury Note-3.125% due 05/15/2021, Market Value $647,919, Repurchase Proceeds $634,080 (Cost $634,079) | $634,079 | $634,079 |
TOTAL INVESTMENTS (EXCLUDING INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED) (Cost $148,082,163) | 160,465,089 | |
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED—3.1% | ||
| Money Market—3.1% | ||
| Western Asset Institutional Cash Reserve-Inst. | ||
| (Cost $4,921,331) | $4,921,331 | 4,921,331 |
TOTAL INVESTMENTS—102.9% (Cost $153,003,494) (f) | 165,386,420 | |
| OTHER ASSETS & LIABILITIES (Net)—(2.9%) | (4,616,343) | |
| NET ASSETS—100% | $160,770,077 | |
| (a) | Non-income producing security. |
| (b) | All or a portion of this security was out on loan. |
| (c) | ADR—American Depositary Receipts |
| (d) | GDR—Global Depositary Receipts |
| (e) | NVDR—Non-Voting Depository Receipts |
| (f) | At March 31, 2012, the unrealized appreciation of investments based on aggregate cost for federal tax purposes of $153,944,756 was as follows: |
| Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost | $23,310,617 |
| Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value | (11,868,953) |
| Net unrealized appreciation / (depreciation) | $11,441,664 |
| The percentage of each investment category is calculated as a percentage of net assets. |
The accompanying notes are an integral part of these financial statements.
SECTOR ALLOCATIONS (as a percentage of Total Net Assets) | |
| Financials | 21.2% |
| Information Technology | 15.6% |
| Energy | 14.7% |
| Materials | 12.3% |
| Consumer Discretionary | 10.2% |
| Consumer Staples | 10.0% |
| Industrials | 6.8% |
| Telecommunication Services | 5.9% |
| Utilities | 2.0% |
| Health Care | 0.6% |
| Exchange Traded Funds | 0.1% |
| Cash and Other Assets (Net) | 0.6% |
| Total | 100.0% |
The accompanying notes are an integral part of these financial statements.
PEAR TREE POLARIS FOREIGN VALUE FUND
SCHEDULE OF INVESTMENTS
March 31, 2012
Common Stock—80.9%
| Shares | Value | |
| AUSTRALIA—1.8% | ||
| BHP Billiton Ltd. | 241,600 | $8,669,068 |
| BELGIUM—2.0% | ||
| Solvay S.A. | 82,947 | 9,818,471 |
| CANADA—2.3% | ||
| Methanex Corporation | 341,607 | 11,092,129 |
| FINLAND—5.5% | ||
| Kone OYJ, Class B | 210,900 | 11,746,758 |
| Konecranes OYJ | 148,280 | 3,895,164 |
| YIT OYJ | 501,316 | 10,775,900 |
| 26,417,822 | ||
| FRANCE—5.6% | ||
| Christian Dior S.A. | 67,973 | 10,427,976 |
| ImerysS.A. | 89,252 | 5,425,809 |
| Maurel et Prom | 532,406 | 9,360,521 |
| Transgene S.A. (a) | 142,827 | 2,009,277 |
| 27,223,583 | ||
| GERMANY—11.6% | ||
| BASF SE | 130,100 | 11,378,680 |
| Deutsche Telekom AG | 660,215 | 7,947,047 |
| HannoverRueckvers | 156,800 | 9,312,649 |
| MuenchenerRueckvers AG | 68,430 | 10,315,589 |
| Symrise AG | 342,950 | 9,923,560 |
| Wincor Nixdorf AG | 153,390 | 7,545,407 |
| 56,422,932 | ||
| HONG KONG- 1.3% | ||
| Guangdong Investment Limited | 8,795,000 | 6,094,227 |
| INDIA—3.2% | ||
| Infosys Technologies Ltd. (b) | 153,845 | 8,773,780 |
| State Bank of India (c) | 81,050 | 6,666,363 |
| 15,440,143 | ||
| IRELAND—5.7% | ||
| CRH plc | 355,008 | 7,242,800 |
| Greencore Group plc | 9,204,660 | 11,219,866 |
| Smurfit Kappa Group plc (a) | 998,510 | 9,101,887 |
| 27,564,553 | ||
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| ISRAEL—2.1% | ||
| Teva Pharmaceuticals SP (b) | 227,719 | $10,261,018 |
| ITALY—0.8% | ||
| TreviFinanziariaSpA | 659,726 | 3,907,681 |
| JAPAN—10.3% | ||
| Asahi Group Holdings Ltd. | 476,600 | 10,600,107 |
| KDDI Corporation | 1,510 | 9,820,542 |
| Meiji Holdings Co., Ltd. | 208,000 | 9,123,582 |
| Nichirei Corporation | 2,031,000 | 9,561,706 |
| Showa Denko K.K. | 4,739,000 | 10,810,314 |
49,916,251 | ||
| NORWAY—2.3% | ||
| DnB Bank ASA | 856,692 | 10,996,616 |
| SOUTH AFRICA—1.9% | ||
| Sasol Ltd. | 190,535 | 9,217,810 |
| SOUTH KOREA—3.8% | ||
| Samsung Electronics Company Ltd. | 16,285 | 18,325,207 |
| SWEDEN—6.7% | ||
| DuniAB | 1,179,500 | 10,826,824 |
| Investor AB, Class B | 502,056 | 11,128,563 |
| SvenskaHandelsbanken AB, Class A | 328,500 | 10,468,122 |
| 32,423,509 | ||
| SWITZERLAND—2.0% | ||
| Novartis AG | 171,050 | 9,467,300 |
| THAILAND—1.5% | ||
| Thai Oil PCL | 3,173,900 | 7,458,922 |
| UNITED KINGDOM—10.5% | ||
| Barratt Developments plc (a) | 5,339,856 | 12,036,181 |
| BBA Aviation plc | 661,544 | 2,263,146 |
| Bellwayplc | 812,234 | 10,621,223 |
| Persimmon plc | 1,137,118 | 11,633,906 |
| Taylor Wimpey plc (a) | 17,610,191 | 14,498,109 |
| 51,052,565 | ||
| TOTAL COMMON STOCK | ||
| (Cost $371,278,954) | 391,769,807 |
The accompanying notes are an integral part of these financial statements.
Short Term Investments—18.7%
| Par Value | Value | |
| Commercial Paper—12.3% | ||
HSBC Finance Corp, 0.05%, due 4/03/2012 (Cost $28,768,000) | $28,768,000 | $28,768,000 |
HSBC Finance Corp, 0.05%, due 4/02/2012 (Cost $30,683,000) | $30,683,000 | 30,683,000 |
Total Commercial Paper (Cost $59,451,000) | 59,451,000 | |
| Money Market—6.4% | ||
State Street Global Advisors FDS (Cost $31,139,346) | $31,139,346 | 31,139,346 |
| TOTAL SHORT TERM INVESTMENTS—18.7% | 90,590,346 | |
| TOTAL INVESTMENTS—99.6% | ||
| (Cost $461,869,300) (d) | 482,360,153 | |
| OTHER ASSETS & LIABILITIES (NET)—0.4% | 1,759,447 | |
| NET ASSETS—100% | $484,119,600 | |
| (a) | Non-income producing security |
| (b) | ADR—American Depository Receipts |
| (c) | GDR—Global Depository Receipts |
| (d) | At March 31, 2012, the unrealized appreciation of investments based on aggregate cost for federal tax purposes of $461,871,718 was as follows: |
| Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost | $74,688,415 |
| Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value | (54,199,980) |
| Net unrealized appreciation / (depreciation) | $20,488,435 |
| The percentage of each investment category is calculated as a percentage of net assets. |
SECTOR ALLOCATIONS (as a percentage of Total Net Assets) | |
| Materials | 17.2% |
| Consumer Discretionary | 14.5% |
| Financials | 12.1% |
| Consumer Staples | 8.4% |
| Information Technology | 7.2% |
| Industrials | 6.7% |
| Energy | 5.4% |
| Health Care | 4.5% |
| Telecommunication Services | 3.7% |
| Utilities | 1.2% |
| Other Assets & Liabilities | 19.1% |
The accompanying notes are an integral part of these financial statements.
PEAR TREE POLARIS FOREIGN VALUE SMALL CAP FUND
SCHEDULE OF INVESTMENTS
March 31, 2012
Common Stock—90.3%
| Shares | Value | |
| AUSTRALIA—2.7% | ||
| Austal Limited | 552,530 | $1,074,066 |
| Industrea Limited | 1,354,788 | 1,439,691 |
2,513,757 | ||
| BELGIUM—1.6% | ||
| Kinepolis Group | 15,900 | 1,484,131 |
| BRAZIL—2.2% | ||
| Equatorial Energia SA | 276,385 | 2,078,881 |
| CANADA—1.9% | ||
| Astral Media, Inc. | 35,800 | 1,739,026 |
| CHINA—2.9% | ||
| China Hongxing Sports Limited (a) | 10,258,400 | 244,763 |
| Sichuan Expressway Company Limited | 2,772,960 | 1,003,576 |
| Xinhua Winshare Publishing and Media Co., Ltd. | 2,701,500 | 1,433,516 |
| 2,681,855 | ||
| FRANCE—1.5% | ||
| Bonduelle SA | 13,900 | 1,363,988 |
| GERMANY—2.2% | ||
| Freenet AG | 127,700 | 2,065,517 |
| HONG KONG—8.2% | ||
| China Fishery Group Limited | 1,427,672 | 1,317,135 |
| Samson Holding Ltd. | 10,475,800 | 1,416,697 |
| Texwinca Holdings Limited | 1,226,300 | 1,495,709 |
| VST Holdings Ltd. (a) | 7,922,800 | 1,918,391 |
| VTech Holdings Limited | 115,700 | 1,483,457 |
| 7,631,389 | ||
| INDIA—3.0% | ||
| KRBL Ltd. | 1,475,200 | 505,294 |
| LIC Housing Finance Ltd. | 146,600 | 754,798 |
| Manappuram General Finance and Leasing Ltd. | 1,064,700 | 637,420 |
| NIIT Technologies Ltd. | 83,400 | 445,280 |
| South Indian Bank Ltd. | 553,320 | 268,270 |
| Usha Martin Group Ltd. | 323,760 | 195,737 |
| 2,806,799 | ||
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| IRELAND—7.0% | ||
| Glanbiaplc | 189,900 | 1,407,916 |
| Greencore Group plc | 1,283,468 | 1,564,462 |
| IFG Group plc | 829,985 | 1,615,846 |
| United Drug plc | 684,056 | $1,933,768 |
| 6,521,992 | ||
| ITALY—2.5% | ||
| DeLclimaSpA | 10 | 8 |
| De’LonghiSpA | 118,910 | 1,469,857 |
| TreviFinanziariaSpA | 152,900 | 905,655 |
| 2,375,520 | ||
| JAPAN—11.7% | ||
| Accordia Golf Co., Ltd. | 1,653 | 1,259,581 |
| BML Inc. | 74,000 | 1,890,068 |
| Chugoku Marine Paints Ltd. | 268,100 | 1,649,296 |
| Daicel Corporation | 271,000 | 1,752,630 |
| DaiichiKosho Co., Ltd. | 83,600 | 1,653,437 |
| Nichirei Corporation | 333,000 | 1,567,724 |
| Unipres Corporation | 38,000 | 1,180,829 |
| 10,953,565 | ||
| NETHERLANDS—2.1% | ||
| Dockwise Ltd. (a) | 93,944 | 1,935,665 |
| NORWAY—5.5% | ||
| ABG Sundal Collier Holding ASA | 1,563,800 | 1,354,663 |
| SpareBank 1SMN | 247,265 | 1,586,964 |
| SpareBank Nord-Norge | 209,731 | 1,165,857 |
| Statoil Fuel & Retail ASA | 160,900 | 1,024,203 |
| 5,131,687 | ||
| PHILIPPINES—2.4% | ||
| Manila Water Company, Inc. | 4,081,170 | 2,205,267 |
| SINGAPORE—3.5% | ||
| Breadtalk Group Ltd. | 2,815,100 | 1,298,571 |
| M1 Ltd. | 987,300 | 1,994,466 |
| 3,293,037 | ||
| SOUTH AFRICA—1.4% | ||
| Clicks Group Limited | 232,300 | 1,356,791 |
| SWEDEN—4.3% | ||
| DuniAB | 156,400 | 1,435,621 |
| LoomisAB | 82,300 | 1,175,137 |
| NolatoAB | 129,700 | 1,376,712 |
| 3,987,470 |
The accompanying notes are an integral part of these financial statements.
| Shares | Value | |
| SWITZERLAND—1.9% | ||
| Vetropack Holding AG | 886 | $1,739,315 |
| TAIWAN—1.5% | ||
| Holtek Semiconductor Inc. | 1,204,000 | 1,446,130 |
| THAILAND—5.0% | ||
| Hana Microelectronics PCL | 2,059,080 | 1,461,713 |
| RatchaburiElec GEN Hodg-for | 1,220,000 | 1,631,280 |
| Thai Union Frozen Products PCL | 684,395 | 1,569,561 |
4,662,554 | ||
| UNITED KINGDOM—15.3% | ||
| Alternative Networks plc | 488,200 | 1,974,506 |
| BBA Aviation plc | 401,532 | 1,373,644 |
| Character Group plc | 496,900 | 1,131,941 |
| Clarkson plc | 64,500 | 1,355,893 |
| CSR plc | 331,900 | 1,219,793 |
| Galliford Try plc | 193,828 | 1,936,585 |
| Halfords Group plc | 245,046 | 1,216,716 |
| The Restaurant Group plc | 250,600 | 1,186,204 |
| Vitec Group plc | 147,082 | 1,583,570 |
| Wetherspoon (J.D.) plc | 196,400 | 1,291,653 |
| 14,270,505 | ||
| TOTAL COMMON STOCK | ||
| (Cost $76,268,530) | 84,244,841 | |
| Preferred Stock—2.3% | ||
| GERMANY—2.3% | ||
Dräegerwerk AG (Cost $894,194) | 19,400 | 2,172,991 |
| Warrants—5.2% | ||
| India—5.2% | ||
| KRBL Limited Derivative (a) | 1,679,000 | 575,058 |
| LIC Housing Finance Derivative | 204,200 | 1,051,365 |
| NIIT Technologies Derivative (a) | 276,900 | 1,478,397 |
| South Indian Bank Derivative (a) | 2,535,250 | 1,229,089 |
| Usha Martin Group Derivative (a) | 807,100 | 487,973 |
| (Cost $2,692,091) | 4,821,881 |
The accompanying notes are an integral part of these financial statements.
Short Term Investments—2.1%
| Par Value | Value | |
| Money Market—2.1% | ||
| State Street Global Advisors FDS | ||
| (Cost $1,931,268) | $1,931,268 | $1,931,268 |
| TOTAL SHORT TERM INVESTMENTS—2.1% | 1,931,268 | |
| TOTAL INVESTMENTS—99.9% | ||
| (Cost $81,786,083) (b) | 93,170,981 | |
| OTHER ASSETS & LIABILITIES (NET)—0.1% | 133,380 | |
| NET ASSETS—100% | $93,304,361 | |
| (a) | Non-income producing security |
| (b) | At March 31, 2012, the unrealized appreciation of investments based on aggregate cost for federal tax purposes of $81,911,788 was as follows: |
| Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost | $18,460,215 |
| Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value | (7,201,022) |
| Net unrealized appreciation / (depreciation) | $11,259,193 |
| The percentage of each investment category is calculated as a percentage of net assets. |
SECTOR ALLOCATIONS (as a percentage of Total Net Assets) | |
| Consumer Discretionary | 25.3% |
| Consumer Staples | 12.0% |
| Information Technology | 11.6% |
| Industrials | 11.0% |
| Financials | 10.4% |
| Telecommunication Services | 6.5% |
| Health Care | 6.4% |
| Utilities | 6.3% |
| Materials | 6.2% |
| Energy | 2.1% |
| Cash and Other Assets | 2.2% |
The accompanying notes are an integral part of these financial statements.
PEAR TREE FUNDS
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2012
| Small Cap | Micro Cap | |
| Assets: | ||
| Investments at value (Includes collateral from securities on loan of $4,251,048: $0; $0; $4,921,331: $0: $0, respectively)* (Note 2) | $103,309,411 | $4,218,832 |
| Repurchase agreements/commercial paper | 15,352 | 198,431 |
| Total Investments | 103,324,763 | 4,417,263 |
| Foreign currency at value (Cost $52,749 for Emerging Markets, $312 for Foreign Value, and $11,549 for Foreign Value Small Cap) | — | — |
| Cash | — | — |
| Receivable from Advisor | 89 | |
| Dividend, interest and foreign tax reclaims receivable | 126,763 | 5,859 |
| Receivable for investments sold | 3,517,835 | — |
| Receivable for shares of beneficial interest sold | 152,537 | 264 |
| Other assets | 13,863 | 2,495 |
| Total Assets | $107,135,761 | $4,425,970 |
| Liabilities: | ||
| Payable for investments purchased | $566,338 | $78,819 |
| Payable for shares of beneficial interest repurchased | 25,015 | — |
| Payable for compensation of manager (Note 3) | 85,374 | — |
| Payable for distribution fees (Note 3) | 19,998 | 611 |
| Payable to custodian | 4,868 | 1,969 |
| Payable to transfer agent (Note 3) | 17,172 | 681 |
| Payable for collateral received for securities loaned | 4,251,048 | — |
| Payable for foreign capital gain tax | — | — |
| Unrealized gain/(loss) on forward foreign currency contracts (Note 2) | — | — |
| Other accrued expenses and liabilities | 54,842 | — |
| Total Liabilities | $5,024,655 | $82,080 |
| Net Assets | $102,111,106 | $4,343,890 |
| * | Includes securities on loan to brokers with market value of $4,147,352; $0; $0; $4,567,550; $0; $0, respectively. |
| Quality | Emerging Markets | Foreign Value | Foreign Value Small Cap |
| $94,233,656 | $164,752,341 | $422,909,153 | $93,170,981 |
| 276,268 | 634,079 | 59,451,000 | — |
| 94,509,924 | 165,386,420 | 482,360,153 | 93,170,981 |
| — | 52,888 | 319 | 11,539 |
| 25,032 | — | — | — |
| 315,075 | 356,983 | 2,634,860 | 484,900 |
| 424,846 | — | — | — |
| — | 271,472 | 535,148 | 133,122 |
| 7,527 | 7,239 | 22,387 | — |
| $95,282,404 | $166,075,002 | $485,552,867 | $93,800,542 |
| $— | $— | $— | $255,206 |
| 33,961 | 54,826 | 189,301 | — |
| 67,353 | 137,665 | 405,872 | 78,161 |
| 19,413 | 31,097 | 80,608 | 15,264 |
| 3,353 | — | 15,529 | 2,145 |
| 16,300 | 26,638 | 84,405 | 16,423 |
| 4,921,331 | — | — | |
| — | 100,395 | 596,162 | 107,935 |
| — | — | — | — |
| 26,666 | 32,973 | 61,390 | 21,047 |
| $167,046 | $5,304,925 | $1,433,267 | $496,181 |
| $95,115,358 | $160,770,077 | $484,119,600 | $93,304,361 |
The accompanying notes are an integral part of these financial statements.
| Small Cap | Micro Cap | |
| Net Assets Consist Of: | ||
| Shares of beneficial interest | $98,026,729 | $3,935,942 |
| Undistributed net investment income | (250,024) | — |
| Accumulated net realized gain/(loss) on investments and foreign denominated assets, liabilities and currency | (21,629,365) | 48,051 |
| Unrealized appreciation/(depreciation) of investments and foreign denominated assets, liabilities and currency | 25,963,766 | 359,897 |
| Net Assets | $102,111,106 | $4,343,890 |
| Investments at cost | $77,360,997 | $4,057,366 |
| Net assets | ||
| Ordinary Shares | $95,869,541 | $2,999,939 |
| Institutional Shares | $6,241,565 | $1,343,950 |
| Shares of beneficial interest outstanding (unlimited number of shares authorized) | ||
| Ordinary Shares | 4,709,139 | 255,894 |
| Institutional Shares | 271,335 | 118,332 |
| Net asset value and offering price per share** | ||
| Ordinary Shares | $20.36 | $11.72 |
| Institutional Shares | $23.00 | $11.36 |
| Quality | Emerging Markets | Foreign Value | Foreign Value Small Cap |
| $94,156,510 | $173,605,619 | $722,529,289 | $83,437,413 |
| 296,610 | 1,511,941 | 4,231,673 | 1,368,679 |
| (9,526,782) | (26,627,334) | (262,552,336) | (2,786,940) |
| 10,189,020 | 12,279,851 | 19,910,974 | 11,285,209 |
| $95,115,358 | $160,770,077 | $484,119,600 | $93,304,361 |
| $84,320,904 | $153,003,494 | $461,869,300 | $81,786,083 |
| $92,557,401 | $145,201,040 | $386,010,804 | $72,737,260 |
| $2,557,957 | $15,569,037 | $98,108,796 | $20,567,101 |
| 6,459,184 | 6,406,043 | 28,302,095 | 8,066,871 |
| 171,086 | 677,871 | 7,197,775 | 2,278,552 |
| $14.33 | $22.67 | $13.64 | $9.02 |
| $14.95 | $22.97 | $13.63 | $9.03 |
The accompanying notes are an integral part of these financial statements.
PEAR TREE FUNDS
STATEMENT OF OPERATIONS
For the Year/Period Ended March 31, 2012
| Small Cap | Micro Cap** | |
| Investment Income: | ||
| Dividends* | $1,165,420 | $42,504 |
| Interest | 191 | 9 |
| Sec Lending Income | 112,073 | — |
| Miscellaneous (Note 2) | — | — |
| Total Investment Income | $1,277,684 | $42,513 |
| Expenses: | ||
| Compensation of manager (Note 3) | 1,038,222 | 13,792 |
| Distribution fees, Ordinary Shares (Note 3) | 243,150 | 2,498 |
| Administrative Fees (Note 3) | 38,906 | 421 |
| Custodian and fund accounting fees | 51,188 | 7,747 |
| Regulatory and Compliance (Note 3) | 24,289 | 256 |
| Transfer agent fees (Note 3): | ||
| Ordinary Shares | 170,961 | 1,847 |
| Institutional Shares | 11,257 | 683 |
| Audit and legal | 49,932 | 24,207 |
| Registration fees | 34,888 | 9,850 |
| Insurance | 9,630 | 109 |
| Compensation of trustees (Note 3) | 16,112 | 207 |
| Printing | 15,662 | 189 |
| Miscellaneous | 14,226 | 167 |
| Total expenses before waivers/reimbursements/reductions | 1,718,423 | 61,973 |
| Waivers and/or reimbursements of expenses (Note 3) | — | (35,339) |
| Fees reduced by credits allowed by custodian (Note 3) | — | — |
| Expenses, Net | $1,718,423 | $26,634 |
| Net investment income/(loss) | $(440,739) | $15,879 |
| Realized and unrealized gain/(loss) on investments, foreign currency, and foreign translation: | ||
| Net realized gain/(loss) (Note 2) on: | ||
| Investments | $9,436,737 | $59,515 |
| Foreign denominated assets, liabilities, and currency | — | — |
| Future Contracts | — | — |
| Change in unrealized appreciation/(depreciation) of: | ||
| Investments | (8,042,519) | 359,897 |
| Foreign denominated assets, liabilities, and currency | — | — |
| Net realized and unrealized gain/(loss) on investment and foreign currency | 1,394,218 | 419,412 |
| Net increase/(decrease) in net assets resulting from operations | $953,479 | $435,291 |
| * | Dividends are net of withholding taxes of $7,031 for Small Cap, $73 for Micro Cap $57,663 for Quality, $631,220 for Emerging Markets, $1,456,234 for Foreign Value, and $184,950 for Foreign Value Small Cap. |
| ** | Commenced operations on September 7, 2011. Information presented is for the period September 7, 2011 to March 31, 2012. |
| Quality | Emerging Markets | Foreign Value | Foreign Value Small Cap |
| $2,124,618 | $5,673,800 | $10,770,974 | $3,547,326 |
| 88 | — | 15,486 | 1,215 |
| 54,999 | 95,508 | — | — |
| — | 25 | — | — |
| $2,179,705 | $5,769,333 | $10,786,460 | $3,548,541 |
| 782,263 | 1,622,541 | 4,229,947 | 923,407 |
| 192,325 | 375,956 | 841,476 | 177,408 |
| 28,351 | 60,667 | 155,684 | 34,448 |
| 35,200 | 245,830 | 217,500 | 71,500 |
| 17,578 | 37,682 | 96,775 | 21,396 |
| 127,914 | 253,649 | 563,689 | 119,865 |
| 2,198 | 19,592 | 142,389 | 34,882 |
| 37,926 | 85,549 | 201,059 | 43,549 |
| 27,159 | 42,966 | 45,987 | 34,996 |
| 7,074 | 14,911 | 38,466 | 8,473 |
| 11,993 | 24,938 | 64,675 | 14,126 |
| 11,593 | 24,219 | 62,701 | 13,755 |
| 10,528 | 24,879 | 64,167 | 12,328 |
| 1,292,102 | 2,833,379 | 6,724,515 | 1,510,133 |
| (120,583) | — | — | — |
| — | — | — | — |
| $1,171,519 | $2,833,379 | $6,724,515 | $1,510,133 |
| $1,008,186 | $2,935,954 | $4,061,945 | $2,038,408 |
| $2,984,631 | $9,419,323 | $(40,237,893) | $(1,548,613) |
| — | (154,619) | 235,613 | 71,589 |
| — | — | — | — |
| 9,457,654 | (26,193,144) | 10,709,571 | (9,042,727) |
| — | 46,988 | 204,249 | (86,392) |
| 12,442,285 | (16,881,452) | (29,088,460) | (10,606,143) |
| $13,450,471 | $(13,945,498) | $(25,026,515) | $(8,567,735) |
The accompanying notes are an integral part of these financial statements.
PEAR TREE FUNDS
STATEMENT OF CHANGES IN NET ASSETS
| Small Cap | ||
Year Ended March 31, 2012 | Year Ended March 31, 2011 | |
| Increase (Decrease) in Net Assets: | ||
| Operations: | ||
| Net investment income/(loss) | $(440,739) | $264,891 |
| Net realized gain/(loss) on investments Foreign denominated assets, liabilities, and currency | 9,436,737 | 6,902,815 |
| Unrealized appreciation/(depreciation) of investments, foreign denominated assets, liabilities, and currency | (8,042,519) | 14,682,547 |
| Net increase/(decrease) from operations | $953,479 | $21,850,253 |
| Distributions to shareholders from: | ||
| Net investment income | ||
| Ordinary shares | $(236,963) | $(529,869) |
| Institutional shares | (27,904) | (46,439) |
| Net realized gains | ||
| Ordinary shares | — | — |
| Institutional shares | — | — |
| Total distributions | $(264,867) | $(576,308) |
| Fund share transactions (Note 8) | (20,058,907) | (6,382,018) |
| Contributions to capital from investment manager/brokers | — | — |
| Increase/(decrease) in net assets | $(19,370,295) | $14,891,927 |
| Net assets beginning of period | 121,481,401 | 106,589,474 |
| Net assets end of period* | $102,111,106 | $121,481,401 |
* Includes undistributed net investment income/(loss) of: | $(250,024) | $264,541 |
The accompanying notes are an integral part of these financial statements.
| Micro Cap | |
Period Ended March 31, 2012** | |
| Increase (Decrease) in Net Assets: | |
| Operations: | |
| Net investment income/(loss) | $15,879 |
| Net realized gain/(loss) on investments Foreign denominated assets, liabilities, and currency | 59,515 |
| Unrealized appreciation/(depreciation) of investments, foreign denominated assets, liabilities, and currency | 359,897 |
| Net increase/(decrease) from operations | $435,291 |
| Distributions to shareholders from: | |
| Net investment income | |
| Ordinary shares | $(21,193) |
| Institutional shares | (6,150) |
| Net realized gains | |
| Ordinary shares | — |
| Institutional shares | — |
| Total distributions | $(27,343) |
| Fund share transactions (Note 8) | 3,935,942 |
| Contributions to capital from investment manager/brokers | — |
| Increase/(decrease) in net assets | $4,343,890 |
| Net assets beginning of period | — |
| Net assets end of period* | $4,343,890 |
*Includes undistributed net investment income/(loss) of: | $— |
**Commenced operations on September 7, 2011. Information presented is for the period September 7, 2011 to March 31, 2012. |
The accompanying notes are an integral part of these financial statements.
| Quality | ||
Year Ended March 31, 2012 | Year Ended March 31, 2011 | |
| Increase (Decrease) in Net Assets: | ||
| Operations: | ||
| Net investment income/(loss) | $1,008,186 | $439,107 |
| Net realized gain/(loss) on investments Foreign denominated assets, liabilities, and currency | 2,984,631 | 9,064,001 |
| Unrealized appreciation/(depreciation) of investments, foreign denominated assets, liabilities, and currency | 9,457,654 | (4,514,062) |
| Net increase/(decrease) from operations | $13,450,471 | $4,989,046 |
| Distributions to shareholders from: | ||
| Net investment income | ||
| Ordinary shares | $(767,633) | $(505,181) |
| Institutional shares | (11,723) | (3,797) |
| Net realized gains | ||
| Ordinary shares | — | — |
| Institutional shares | — | — |
| Total distributions | $(779,356) | $(508,978) |
| Fund share transactions (Note 8) | 18,714,889 | 4,444,910 |
| Contributions to capital from investment manager/brokers | — | — |
| Increase/(decrease) in net assets | $31,386,004 | $8,924,978 |
| Net assets beginning of period | 63,729,354 | 54,804,376 |
| Net assets end of period* | $95,115,358 | $63,729,354 |
* Includes undistributed net investment income/(loss) of: | $296,610 | $67,780 |
The accompanying notes are an integral part of these financial statements.
Emerging Markets | ||
Year Ended March 31, 2012 | Year Ended March 31, 2011 | |
| Increase (Decrease) in Net Assets: | ||
| Operations: | ||
| Net investment income/(loss) | $2,935,954 | $2,459,680 |
| Net realized gain/(loss) on investments Foreign denominated assets, liabilities, and currency | 9,264,704 | 41,413,000 |
| Unrealized appreciation/(depreciation) of investments, foreign denominated assets, liabilities, and currency | (26,146,156) | (5,430,264) |
| Net increase/(decrease) from operations | $(13,945,498) | $38,442,416 |
| Distributions to shareholders from: | ||
| Net investment income | ||
| Ordinary shares | $(3,007,245) | $(2,386,187) |
| Institutional shares | (270,340) | (114,101) |
| Net realized gains | ||
| Ordinary shares | — | — |
| Institutional shares | — | — |
| Total distributions | $(3,277,585) | $(2,500,288) |
| Fund share transactions (Note 8) | (9,659,603) | (80,263,559) |
| Contributions to capital from investment manager/brokers | — | 604 |
| Increase/(decrease) in net assets | $(26,882,686) | $(44,320,827) |
| Net assets beginning of period | 187,652,763 | 231,973,590 |
| Net assets end of period* | $160,770,077 | $187,652,763 |
* Includes undistributed net investment income/(loss) of: | $1,511,941 | $1,982,045 |
The accompanying notes are an integral part of these financial statements.
Foreign Value | ||
Year Ended March 31, 2012 | Year Ended March 31, 2011 | |
| Increase (Decrease) in Net Assets: | ||
| Operations: | ||
| Net investment income/(loss) | $4,061,945 | $2,465,544 |
| Net realized gain/(loss) on investments Foreign denominated assets, liabilities, and currency | (40,002,280) | 10,976,410 |
| Unrealized appreciation/(depreciation) of investments, foreign denominated assets, liabilities, and currency | 10,913,820 | 54,912,820 |
| Net increase/(decrease) from operations | $(25,026,515) | $68,354,774 |
| Distributions to shareholders from: | ||
| Net investment income | ||
| Ordinary shares | $(1,725,884) | $(3,725,640) |
| Institutional shares | (716,459) | (976,013) |
| Net realized gains | ||
| Ordinary shares | — | — |
| Institutional shares | — | — |
| Total distributions | $(2,442,343) | $(4,701,653) |
| Fund share transactions (Note 8) | 63,247,944 | (53,005,588) |
| Contributions to capital from investment manager/brokers | — | 71 |
| Increase/(decrease) in net assets | $35,779,086 | $10,647,604 |
| Net assets beginning of period | 448,340,514 | 437,692,910 |
| Net assets end of period* | $484,119,600 | $448,340,514 |
* Includes undistributed net investment income/(loss) of: | $4,231,673 | $2,376,458 |
The accompanying notes are an integral part of these financial statements.
Foreign Value Small Cap | ||
Year Ended March 31, 2012 | Year Ended March 31, 2011 | |
| Increase (Decrease) in Net Assets: | ||
| Operations: | ||
| Net investment income/(loss) | $2,038,408 | $857,660 |
| Net realized gain/(loss) on investments Foreign denominated assets, liabilities, and currency | (1,477,024) | 10,578,029 |
| Unrealized appreciation/(depreciation) of investments, foreign denominated assets, liabilities, and currency | (9,129,119) | 277,560 |
| Net increase/(decrease) from operations | $(8,567,735) | $11,713,249 |
| Distributions to shareholders from: | ||
| Net investment income | ||
| Ordinary shares | (674,094) | (689,222) |
| Institutional shares | (250,427) | (97,556) |
| Net realized gains | ||
| Ordinary shares | (6,678,061) | (3,107,308) |
| Institutional shares | (1,935,417) | (314,276) |
| Total distributions | $(9,537,999) | $(4,208,362) |
| Fund share transactions (Note 8) | 9,130,510 | (38,298,704) |
| Contributions to capital from investment manager/brokers | — | — |
| Increase/(decrease) in net assets | $(8,975,224) | $(30,793,817) |
| Net assets beginning of period | 102,279,585 | 133,073,402 |
| Net assets end of period* | $93,304,361 | $102,279,585 |
* Includes undistributed net investment income/ (loss) of: | $1,368,679 | $183,510 |
The accompanying notes are an integral part of these financial statements.
PEAR TREE COLUMBIA SMALL CAP FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
| Ordinary Shares | |||||
| Years Ended March 31, | |||||
| 2012 | 2011 | 2010 | 2009 | 2008 | |
| Net Asset Value, Beginning of Period | $19.92 | $16.45 | $10.22 | $19.45 | $23.88 |
| Income from Investment Operations: | |||||
| Net investment income (loss) (a)(b)(c) | (0.08) | 0.04 | 0.11 | 0.06 | 0.07 |
| Net realized and unrealized gain/(loss) on securities | 0.57 | 3.52 | 6.15 | (9.23) | (3.56) |
| Total from Investment Operations | 0.49 | 3.56 | 6.26 | (9.17) | (3.49) |
| Less Distributions: | |||||
| Dividends from net investment income | (0.05) | (0.09) | (0.03) | — | (0.11) |
| Distributions from realized capital gains | — | — | — | (0.06) | (0.83) |
| Total Distributions | (0.05) | (0.09) | (0.03) | (0.06) | (0.94) |
| Net Asset Value, End of Period | $20.36 | $19.92 | $16.45 | $10.22 | $19.45 |
| Total Return (d) | 2.48% | 21.69% | 61.27% | (47.11)% | (15.17)% |
| Net Assets, End of Period (000’s) | $95,870 | $113,675 | $99,444 | $61,943 | $119,949 |
| Ratios and Supplemental Data: | |||||
| Ratios of expenses to average net assets: (e) | |||||
| Gross | 1.67% | 1.64% | 1.65% | 1.64% | 1.59%* |
| Net | 1.67% | 1.64% | 1.65% | 1.64% | 1.59%* |
| Ratio of net investment income (loss) to average net assets (c) | (0.44)% | 0.23% | 0.81% | 0.31% | 0.31% |
| Portfolio Turnover | 53% | 71% | 50% | 72% | 39% |
| * | Expense ratio declined from year ended March 31, 2007 to 2008.The prior year was the result of the reduction of the 12b-1 fee from 50 basis points to 25 basis points on June 1, 2007. |
The accompanying notes are an integral part of these financial statements.
| Institutional Shares | |||||
| Years Ended March 31, | |||||
| 2012 | 2011 | 2010 | 2009 | 2008 | |
| Net Asset Value, Beginning of Period | $22.50 | $18.56 | $11.51 | $21.86 | $26.71 |
| Income from Investment Operations: | |||||
| Net investment income (loss) (a)(b)(c) | (0.04) | 0.09 | 0.20 | 0.10 | 0.12 |
| Net realized and unrealized gain/(loss) on securities | 0.63 | 3.98 | 6.91 | (10.39) | (3.94) |
| Total from Investment Operations | 0.59 | 4.07 | 7.11 | (10.29) | (3.82) |
| Less Distributions: | |||||
| Dividends from net investment income | (0.09) | (0.13) | (0.06) | — | (0.20) |
| Distributions from realized capital gains | — | — | — | (0.06) | (0.83) |
| Total Distributions | (0.09) | (0.13) | (0.06) | (0.06) | (1.03) |
| Net Asset Value, End of Period | $23.00 | $22.50 | $18.56 | $11.51 | $21.86 |
| Total Return (d) | 2.69% | 21.98% | 61.83% | (47.04)% | (14.87)% |
| Net Assets, End of Period (000’s) | $6,242 | $7,806 | $7,146 | $7,281 | $24,282 |
| Ratios and Supplemental Data: | |||||
| Ratios of expenses to average net assets: (e) | |||||
| Gross | 1.42% | 1.39% | 1.41% | 1.42% | 1.30% |
| Net | 1.42% | 1.39% | 1.41% | 1.42% | 1.30% |
| Ratio of net investment income (loss) to average net assets (c) | (0.19)% | 0.48% | 1.35% | 0.48% | 0.45% |
| Portfolio Turnover | 53% | 71% | 50% | 72% | 39% |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Reflects expense waivers/reimbursements and reductions in effect during the period. See Note 3 to the Financial Statements. |
| (c) | Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets reflect net investment income prior to certain reclassifications for federal income or excise taxes. |
| (d) | Total Return does not include the deferred sales charge of 1% for the Ordinary Shares. The total return would have been lower if certain fees had not been waived or if custodial fees had not been reduced by credits allowed by the custodian. See Note 3 to the financial statements. |
| (e) | Ratios of expenses to average net assets: |
| — Gross (total expenses before fee waivers, reimbursements by the investment advisor, and custody earnings credits, if any). |
| — Net (total expenses net of fee waivers, reimbursements by the investment advisor, and custody earnings credits, if any). |
The accompanying notes are an integral part of these financial statements.
PEAR TREE COLUMBIA MICRO CAP FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
| Ordinary Shares | |
For the period ended March 31, 2012* | |
| Net Asset Value, Beginning of Period | $10.00 |
| Income from Investment Operations: | |
| Net investment income (loss) (a)(b)(c) | 0.06 |
| Net realized and unrealized gain/(loss) on securities | 1.76 |
| Total from Investment Operations | 1.82 |
| Less Distributions: | |
| Dividends from net investment income | (0.10) |
| Distributions from realized capital gains | — |
| Total Distributions | (0.10) |
| Net Asset Value, End of Period* | $11.72 |
| Total Return (d) | 18.36% |
| Net Assets, End of Period (000’s) | $3,000 |
| Ratios and Supplemental Data: | |
| Ratios of expenses to average net assets: (e) | |
| Gross | 4.58%** |
| Net | 2.00%** |
| Ratio of net investment income (loss) to average net assets (c) | 1.08%** |
| Portfolio Turnover | 67% |
The accompanying notes are an integral part of these financial statements.
| Institutional Shares | |
For the period ended March 31, 2012* | |
| Net Asset Value, Beginning of Period | $10.00 |
| Income from Investment Operations: | |
| Net investment income (loss) (a)(b)(c) | 0.08 |
| Net realized and unrealized gain/(loss) on securities | 1.38 |
| Total from Investment Operations | 1.46 |
| Less Distributions: | |
| Dividends from net investment income | (0.10) |
| Distributions from realized capital gains | — |
| Total Distributions | (0.10) |
| Net Asset Value, End of Period* | $11.36 |
| Total Return (d) | 14.75% |
| Net Assets, End of Period (000’s) | $1,344 |
| Ratios and Supplemental Data: | |
| Ratios of expenses to average net assets: (e) | |
| Gross | 4.28%** |
| Net | 1.75%** |
| Ratio of net investment income (loss) to average net assets (c) | 1.34%** |
| Portfolio Turnover | 67% |
| * | Fund commenced operations on September 12, 2011 for Ordinary and September 7, 2011 for Institutional. |
| ** | Annualized. |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Reflects expense waivers/reimbursements and reductions in effect during the period. See Note 3 to the Financial Statements. |
| (c) | Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets reflect net investment income prior to certain reclassifications for federal income or excise taxes. |
| (d) | Total Return does not include the deferred sales charge of 1% for the Ordinary Shares. The total return would have been lower if certain fees had not been waived or if custodial fees had not been reduced by credits allowed by the custodian. Not Annualized. See Note 3 to the financial statements. |
| (e) | Ratios of expenses to average net assets: |
| — Gross (total expenses before fee waivers, reimbursements by the investment advisor, and custody earnings credits, if any). |
| — Net (total expenses net of fee waivers, reimbursements by the investment advisor, and custody earnings credits, if any). |
The accompanying notes are an integral part of these financial statements.
PEAR TREE QUALITY FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
| Ordinary Shares | |||||
| Years Ended March 31, | |||||
| 2012 | 2011 | 2010 | 2009 | 2008 | |
| Net Asset Value, Beginning of Period | $12.36 | $11.37 | $8.24 | $14.07 | $17.04 |
| Income from Investment Operations: | |||||
| Net investment income (loss) (a)(b)(c) | 0.17 | 0.09 | 0.05 | (0.04) | (0.09) |
| Net realized and unrealized gain/(loss) on securities | 1.92 | 1.01 | 3.10 | (5.78) | (2.30) |
| Total from Investment Operations | 2.09 | 1.10 | 3.15 | (5.82) | (2.39) |
| Less Distributions: | |||||
| Dividends from net investment income | (0.12) | (0.11) | (0.02) | (0.01) | — |
| Distributions from realized capital gains | — | — | — | — | (0.58) |
| Total Distributions | (0.12) | (0.11) | (0.02) | (0.01) | (0.58) |
| Net Asset Value, End of Period | $14.33 | $12.36 | $11.37 | $8.24 | $14.07 |
| Total Return (d) | 16.99% | 9.78% | 38.30% | (41.36)% | (14.43)% |
| Net Assets, End of Period (000’s) | $92,557 | $62,920 | $54,213 | $43,014 | $69,767 |
| Ratios and Supplemental Data: | |||||
| Ratios of expenses to average net assets: (e) | |||||
| Gross | 1.66% | 1.93% | 2.10% | 2.71% | 2.18% |
| Net including dividend and interest expense for securities sold short | 1.51% | 1.89% | 2.10% | 2.71% | 2.12% |
| Net excluding dividend and interest expense for securities sold short | 1.51% | 1.85% | 1.92% | 1.98% | 1.90% |
| Ratio of net investment income (loss) to average net assets (c) | 1.28% | 0.84% | 0.50% | (0.38)% | (0.52)% |
| Portfolio Turnover Excluding Short Positions (f) | 68% | 283% | 191% | 207% | 171% |
Note: This fund changed its investment strategy on January 27, 2011.
The accompanying notes are an integral part of these financial statements.
| Institutional Shares | |||||
| Years Ended March 31, | |||||
| 2012 | 2011 | 2010 | 2009 | 2008 | |
| Net Asset Value, Beginning of Period | $12.85 | $11.80 | $8.54 | $14.71 | $17.80 |
| Income from Investment Operations: | |||||
| Net investment income (loss) (a)(b)(c) | 0.25 | 0.12 | 0.08 | (0.10) | (0.10) |
| Net realized and unrealized gain/(loss) on securities | 1.99 | 1.06 | 3.22 | (6.02) | (2.41) |
| Total from Investment Operations | 2.24 | 1.18 | 3.30 | (6.12) | (2.51) |
| Less Distributions: | |||||
| Dividends from net investment income | (0.14) | (0.13) | (0.04) | (0.05) | — |
| Distributions from realized capital gains | — | — | — | — | (0.58) |
| Total Distributions | (0.14) | (0.13) | (0.04) | (0.05) | (0.58) |
| Net Asset Value, End of Period | $14.95 | $12.85 | $11.80 | $8.54 | $14.71 |
| Total Return (d) | 17.57% | 10.07% | 38.71% | (41.66)% | (14.49)% |
| Net Assets, End of Period (000’s) | $2,558 | $809 | $591 | $584 | $1,009 |
| Ratios and Supplemental Data : | |||||
| Ratios of expenses to average net assets: (e) | |||||
| Gross | 1.41% | 1.71% | 1.81% | 3.19% | 2.23% |
| Net including dividend and interest expense for securities sold short | 1.00% | 1.67% | 1.81% | 3.19% | 2.17% |
| Net excluding dividend and interest expense for securities sold short | 1.00% | 1.63% | 1.63% | 2.46% | 1.95% |
| Ratio of net investment income (loss) to average net assets (c) | 1.85% | 1.08% | 0.75% | (0.86)% | (0.56)% |
| Portfolio Turnover Excluding Short Positions (f) | 68% | 283% | 191% | 207% | 171% |
Note: This Fund changed its investment strategy on January 27, 2011 from Long / Short to Quality.
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Reflects expense waivers/reimbursements and reductions in effect during the period. See Note 3 to the Financial Statements. |
| (c) | Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets reflect net investment income prior to certain reclassifications for federal income or excise taxes. |
| (d) | Total Return does not include the deferred sales charge of 1% for the Ordinary Shares. The total return would have been lower if certain fees had not been waived or if custodial fees had not been reduced by credits allowed by the custodian. See Note 3 to the financial statements. |
| (e) | Ratios of expenses to average net assets: |
| — Gross (total expenses before fee waivers, reimbursements by the investment advisor, and custody earnings credits, if any). |
| — Net (total expenses net fee waivers, reimbursements by the investment advisor, and custody earnings credits, if any). |
| (f) | Portfolio turnover is calculated on long security positions only. Short positions are generally held for less than one year. |
The accompanying notes are an integral part of these financial statements.
PEAR TREE PANAGORA DYNAMIC EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
| Ordinary Shares | |||||
| Years Ended March 31, | |||||
| 2012 | 2011 | 2010 | 2009 | 2008 | |
| Net Asset Value, Beginning of Period | $25.18 | $21.23 | $12.06 | $27.04 | $23.34 |
| Income from Investment Operations: | |||||
| Net investment income (loss) (a)(b)(c) | 0.41 | 0.24 | 0.18 | 0.33 | 0.26 |
| Net realized and unrealized gain/(loss) on securities | (2.44) | 3.96 | 9.05 | (14.76) | 4.42 |
| Total from Investment Operations | (2.03) | 4.20 | 9.23 | (14.43) | 4.68 |
| Less Distributions: | |||||
| Dividends from net investment income | (0.48) | (0.25) | (0.06) | (0.43) | (0.16) |
| Distributions from realized capital gains | — | — | — | (0.12) | (0.82) |
| Total Distributions | (0.48) | (0.25) | (0.06) | (0.55) | (0.98) |
| Net Asset Value, End of Period | $22.67 | $25.18 | $21.23 | $12.06 | $27.04 |
| Total Return (d) | (7.80)% | 19.86% | 76.56% | (53.27)% | 19.35% |
| Net Assets, End of Period (000’s) | $145,201 | $176,386 | $205,727 | $164,133 | $491,462 |
| Ratios and Supplemental Data: | |||||
| Ratios of expenses to average net assets: (e) | |||||
| Gross | 1.76% | 1.77% | 1.74% | 1.67% | 1.60% |
| Net | 1.76% | 1.77% | 1.74% | 1.67% | 1.60% |
Ratio of net investment income (loss) to average net assets (c) | 1.80% | 1.05% | 0.99% | 1.66% | 0.91% |
| Portfolio Turnover | 56% | 68% | 120% | 67% | 18% |
The accompanying notes are an integral part of these financial statements.
| Institutional Shares | |||||
| Years Ended March 31, | |||||
| 2012 | 2011 | 2010 | 2009 | 2008 | |
| Net Asset Value, Beginning of Period | $25.53 | $21.48 | $12.19 | $27.46 | $23.67 |
| Income from Investment Operations: | |||||
| Net investment income (loss) (a)(b)(c) | 0.41 | 0.42 | 0.27 | 0.34 | 0.33 |
| Net realized and unrealized gain/(loss) on securities | (2.42) | 3.89 | 9.11 | (14.98) | 4.50 |
| Total from Investment Operations | (2.01) | 4.31 | 9.38 | (14.64) | 4.83 |
| Less Distributions: | |||||
| Dividends from net investment income | (0.55) | (0.26) | (0.09) | (0.51) | (0.22) |
| Distributions from realized capital gains | — | — | — | (0.12) | (0.82) |
| Total Distributions | (0.55) | (0.26) | (0.09) | (0.63) | (1.04) |
| Net Asset Value, End of Period | $22.97 | $25.53 | $21.48 | $12.19 | $27.46 |
| Total Return (d) | (7.56)% | 20.14% | 77.02% | (53.17)% | 19.67% |
| Net Assets, End of Period (000’s) | $15,569 | $11,267 | $26,247 | $25,664 | $40,501 |
| Ratios and Supplemental Data: | |||||
| Ratios of expenses to average net assets: (e) | |||||
| Gross | 1.52% | 1.51% | 1.50% | 1.48% | 1.39% |
| Net | 1.52% | 1.51% | 1.50% | 1.48% | 1.39% |
| Ratio of net investment income (loss) to average net assets (c) | 1.81% | 1.94% | 1.48% | 1.82% | 1.12% |
| Portfolio Turnover | 56% | 68% | 120% | 67% | 18% |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Reflects expense waivers/reimbursements and reductions in effect during the period. See Note 3 to the Financial Statements. |
| (c) | Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets reflect net investment income prior to certain reclassifications for federal income or excise taxes. |
| (d) | Total Return does not include the deferred sales charge of 1% for the Ordinary Shares. The total return would have been lower if certain fees had not been waived or if custodial fees had not been reduced by credits allowed by the custodian. See Note 3 to the financial statements. |
| (e) | Ratios of expenses to average net assets: |
| — Gross (total expenses before fee waivers, reimbursements by the investment advisor, and custody earnings credits, if any). |
| — Net (total expenses net of fee waivers, reimbursements by the investment advisor, and custody earnings credits, if any). |
The accompanying notes are an integral part of these financial statements.
PEAR TREE POLARIS FOREIGN VALUE FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
| Ordinary Shares | |||||
| Years Ended March 31, | |||||
| 2012 | 2011 | 2010 | 2009 | 2008 | |
| Net Asset Value, Beginning of Period | $14.68 | $12.45 | $6.97 | $19.87 | $23.07 |
| Income from Investment Operations: | |||||
| Net investment income (loss) (a)(b)(c) | 0.12 | 0.07 | 0.13 | 0.35 | 0.19 |
| Net realized and unrealized gain/(loss) on securities | (1.09) | 2.31 | 5.71 | (11.53) | (2.11) |
| Total from Investment Operations | (0.97) | 2.38 | 5.84 | (11.18) | (1.92) |
| Less Distributions: | |||||
| Dividends from net investment income | (0.07) | (0.15) | (0.36) | (0.11) | (0.19) |
| Distributions from realized capital gains | — | — | — | (1.61) | (1.09) |
| Total Distributions | (0.07) | (0.15) | (0.36) | (1.72) | (1.28) |
| Net Asset Value, End of Period | $13.64 | $14.68 | $12.45 | $6.97 | $19.87 |
| Total Return (d) | (6.55)% | 19.17% | 84.05% | (55.95)% | (8.71)% |
| Net Assets, End of Period (000’s) | $386,011 | $369,550 | $369,626 | $193,798 | $781,136 |
| Ratios and Supplemental Data: | |||||
| Ratios of expenses to average net assets: (e) | |||||
| Gross | 1.64% | 1.62% | 1.62% | 1.62% | 1.56% |
| Net | 1.64% | 1.62% | 1.62% | 1.62% | 1.56% |
Ratio of net investment income (loss) to average net assets (c) | 0.93% | 0.56% | 1.17% | 2.49% | 0.83% |
| Portfolio Turnover | 18% | 9% | 24% | 20% | 44% |
The accompanying notes are an integral part of these financial statements.
| Institutional Shares | |||||
| Years Ended March 31, | |||||
| 2012 | 2011 | 2010 | 2009 | 2008 | |
| Net Asset Value, Beginning of Period | $14.68 | $12.45 | $6.98 | $19.98 | $23.19 |
| Income from Investment Operations: | |||||
| Net investment income (loss) (a)(b)(c) | 0.14 | 0.10 | 0.14 | 0.38 | 0.26 |
| Net realized and unrealized gain/(loss) on securities | (1.09) | 2.31 | 5.71 | (11.60) | (2.13) |
| Total from Investment Operations | (0.95) | 2.41 | 5.85 | (11.22) | (1.87) |
| Less Distributions: | |||||
| Dividends from net investment income | (0.10) | (0.18) | (0.38) | (0.17) | (0.25) |
| Distributions from realized capital gains | — | — | — | (1.61) | (1.09) |
| Total Distributions | (0.10) | (0.18) | (0.38) | (1.78) | (1.34) |
| Net Asset Value, End of Period | $13.63 | $14.68 | $12.45 | $6.98 | $19.98 |
| Total Return (d) | (6.34)% | 19.48% | 84.12% | (55.85)% | (8.49)% |
| Net Assets, End of Period (000’s) | $98,109 | $78,790 | $68,067 | $47,090 | $140,999 |
| Ratios and Supplemental Data: | |||||
| Ratios of expenses to average net assets: (e) | |||||
| Gross | 1.39% | 1.37% | 1.37% | 1.38% | 1.32% |
| Net | 1.39% | 1.37% | 1.37% | 1.38% | 1.32% |
| Ratio of net investment income (loss) to average net assets (c) | 1.07% | 0.79% | 1.29% | 2.77% | 1.18% |
| Portfolio Turnover | 18% | 9% | 24% | 20% | 44% |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Reflects expense waivers/reimbursements and reductions in effect during the period. See Note 3 to the Financial Statements. |
| (c) | Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets reflect net investment income prior to certain reclassifications for federal income or excise taxes. |
| (d) | Total Return does not include the deferred sales charge of 1% for the Ordinary Shares. The total return would have been lower if certain fees had not been waived or if custodial fees had not been reduced by credits allowed by the custodian. See Note 3 to the financial statements. |
| (e) | Ratios of expenses to average net assets: |
| — Gross (total expenses before fee waivers, reimbursements by the investment advisor, and custody earnings credits, if any). |
| — Net (total expenses net of fee waivers, reimbursements by the investment advisor, and custody earnings credits, if any). |
The accompanying notes are an integral part of these financial statements.
PEAR TREE POLARIS FOREIGN VALUE SMALL CAP FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
| Ordinary Shares | ||||
| Period Ended March 31, | ||||
| 2012 | 2011 | 2010 | 2009* | |
| Net Asset Value, Beginning of Period | $11.19 | $10.28 | $4.82 | $10.00 |
| Income from Investment Operations: | ||||
| Net investment income (loss) (a)(b)(c) | 0.21 | 0.09 | 0.07 | 0.03 |
| Net realized and unrealized gain/(loss) on securities | (1.29) | 1.25 | 5.42 | (5.15) |
| Total from Investment Operations | (1.08) | 1.34 | 5.49 | (5.12) |
| Less Distributions: | ||||
| Dividends from net investment income | (0.10) | (0.08) | (0.03) | (0.04) |
| Distributions from realized capital gains | (0.99) | (0.35) | — | (0.02) |
| Total Distributions | (1.09) | (0.43) | (0.03) | (0.06) |
| Net Asset Value, End of Period* | $9.02 | $11.19 | $10.28 | $4.82 |
| Total Return (d) | (8.20)% | 13.12% | 114.00% | (51.25)% |
| Net Assets, End of Period (000’s) | $72,737 | $78,307 | $124,971 | $18,978 |
| Ratios and Supplemental Data: | ||||
| Ratios of expenses to average net assets: (e) | ||||
| Gross | 1.70% | 1.69% | 1.64% | 2.00%** |
| Net | 1.70% | 1.69% | 1.64% | 1.97%** |
| Ratio of net investment income (loss) to average net assets (c) | 2.14% | 0.82% | 0.82% | 0.66%** |
| Portfolio Turnover | 22% | 54% | 14% | 10% |
The accompanying notes are an integral part of these financial statements.
| Institutional Shares | ||||
| Years Ended March 31, | ||||
| 2012 | 2011 | 2010 | 2009* | |
| Net Asset Value, Beginning of Period | $11.21 | $10.30 | $4.82 | $10.00 |
| Income from Investment Operations: | ||||
| Net investment income (loss) (a)(b)(c) | 0.24 | 0.09 | 0.11 | 0.07 |
| Net realized and unrealized gain/(loss) on securities | (1.30) | 1.28 | 5.41 | (5.19) |
| Total from Investment Operations | (1.06) | 1.37 | 5.52 | (5.12) |
| Less Distributions: | ||||
| Dividends from net investment income | (0.13) | (0.11) | (0.04) | (0.04) |
| Distributions from realized capital gains | (0.99) | (0.35) | — | (0.02) |
| Total Distributions | (1.12) | (0.46) | (0.04) | (0.06) |
| Net Asset Value, End of Period* | $9.03 | $11.21 | $10.30 | $4.82 |
| Total Return (d) | (7.99)% | 13.40% | 114.55% | (51.20)% |
| Net Assets, End of Period (000’s) | $20,567 | $23,973 | $8,103 | $3,592 |
| Ratios and Supplemental Data: | ||||
| Ratios of expenses to average net assets: (e) | ||||
| Gross | 1.43% | 1.44% | 1.43% | 1.88%** |
| Net | 1.43% | 1.44% | 1.43% | 1.85%** |
| Ratio of net investment income (loss) to average net assets (c) | 2.45% | 0.92% | 1.27% | 1.10%** |
| Portfolio Turnover | 22% | 54% | 14% | 10% |
| * | Fund commenced operations May 1, 2008. |
| ** | Annualized. |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Reflects expense waivers/reimbursements and reductions in effect during the period. See Note 3 to the Financial Statements. |
| (c) | Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets reflect net investment income prior to certain reclassifications for federal income or excise taxes. |
| (d) | Total Return does not include the deferred sales charge of 1% for the Ordinary Shares. The total return would have been lower if certain fees had not been waived or if custodial fees had not been reduced by credits allowed by the custodian. See Note 3 to the financial statements. |
| (e) | Ratios of expenses to average net assets: |
| — Gross (total expenses before fee waivers, reimbursements by the investment advisor, and custody earnings credits, if any). |
The accompanying notes are an integral part of these financial statements.
PEAR TREE FUNDS
NOTES TO FINANCIAL STATEMENTS
1. Organization of the Trust
Pear Tree Funds, formerly known as Quantitative Group of Funds d/b/a “Quant Funds” (the “Trust”), is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a non-diversified, open-end management investment company. The Trust currently has six series (each a “Fund” and collectively the “Funds”) each with a distinct investment objective.
Pear Tree Columbia Small Cap Fund (“Small Cap”) seeks maximum long-term capital appreciation.
Pear Tree Columbia Micro Cap Fund (“Micro Cap”) seeks maximum long-term capital appreciation. Micro Cap accepted its first subscription and began trading securities on September 7, 2011.
Pear Tree Quality Fund (“Quality”) seeks long-term growth of capital.
Pear Tree PanAgora Dynamic Emerging Markets Fund (“Emerging Markets”) seeks long- term growth of capital. Prior to February 1, 2012, the Fund was called Pear Tree Emerging Markets Fund.
Pear Tree Polaris Foreign Value Fund (“Foreign Value”) seeks long-term capital growth and income.
Pear Tree Polaris Foreign Value Small Cap Fund (“Foreign Value Small Cap”) seeks long-term capital growth and income.
Each Fund offers two classes of shares, designated as Ordinary Shares and Institutional Shares. The classes differ principally in their respective expense structure and minimum investment requirements. Each class of shares represents an interest in the same portfolio of investments of the respective Fund and has equal rights to voting, redemptions, dividends and liquidation. Ordinary Shares bear distribution (Rule 12b-1) fees and have exclusive voting rights with respect to the distribution plan that has been adopted by Ordinary Share shareholders. There is no distribution plan for Institutional Shares.
At times, a Fund’s investments may represent industries or industry sectors that are interrelated or have common risks, making it more susceptible to any economic, political, or regulatory developments or other risks affecting those industries and sectors. To the extent that a Fund is permitted to invest in foreign markets, emerging markets or countries with limited or developing markets such investments may subject the Fund to a greater degree of risk than in the U.S. market or a developed market. Risks associated with these foreign and developing markets include political, social or economic factors and may affect the price of a Fund’s investments and income generated by these investments, as well as a Fund’s ability to repatriate such amounts. Information regarding each Fund’s principal risks is contained in the Fund’s prospectus. Please refer to those documents when considering a Fund’s risks.
2. Significant Accounting Policies
Each Fund’s financial statements have been prepared in conformity with U.S. generally accepted accounting principles. Those principals require the management of the Funds to, among other things, make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income, expenses and gains and losses on investments during the reporting year. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by each Fund in the preparation of its financial statements, which are consistent with those policies generally accepted in the investment company industry.
Security Valuation
Portfolio securities are valued each business day generally at the last reported sale price on the principal exchange or market on which they are traded. If on a business day there is no such reported sale, the securities generally are valued at the mean between the last reported bid and asked prices. For securities, where no such sales have been recently reported, a Fund may value such securities at the last reported bid price. In the event that there is information suggesting that valuation of such securities based upon bid and/or asked prices may not be accurate, a Fund may value such securities in good faith at fair value in accordance with procedures (the “Valuation Procedures”) established by the Funds’ Board of Trustees (the “Trustees”), which may include a determination to value such securities at the last reported sales price. Short-term investments that mature in 60 days or less are valued at amortized cost.
Securities quoted in foreign currencies are translated into U.S. dollars based upon the prevailing exchange rate at the time of valuation. Other assets and securities for which no quotations are readily available are valued at fair value as determined in good faith using the Valuation Procedures. As a result, changes in the value of those currencies in relation to the U.S. dollar may affect a Fund’s NAV. Because foreign markets may be open at different times than the New York Stock Exchange, the value of a Fund’s shares may change on days when shareholders are not able to buy or sell them. If events materially affecting the values of a Fund’s foreign investments occur between the close of foreign markets and the close of regular trading on the New York Stock Exchange, these investments may be valued at their fair value as determined in good faith using the Valuation Procedures.
The Fund has adopted fair valuation accounting standards that establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs used to develop the measurements of fair value. These inputs are summarized in the three broad levels listed below:
| • | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access. |
| • | Level 2 — Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. |
| • | Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset liability, and would be based on the best information available. |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of the markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Changes in valuation techniques may result in transfers in changing an investment’s assigned level within the hierarchy.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. The following is a summary of the inputs used to value the Fund’s net assets as of March 31, 2012:
Quoted Prices In Active Markets | Significant Other Observable Inputs | Significant Unobservable Inputs | Market Value at March 31, 2012 | |
| Level 1 | Level 2 | Level 3 | Total | |
| Small Cap | ||||
| Common Stock* | $86,478,903 | $— | $ — | $86,478,903 |
| Depository Receipts | 1,706,838 | — | — | 1,706,838 |
| Limited Partnerships | 60,472 | 60,472 | ||
| Real Estate Inv. Trusts | 10,812,150 | — | — | 10,812,150 |
| Short Term Investments | 4,251,048 | 15,352 | — | 4,266,400 |
| Total | $103,309,411 | $15,352 | $— | $103,324,763 |
| Micro Cap | ||||
| Common Stock* | $3,878,989 | $— | $— | $3,878,989 |
| Limited Partnerships | 68,935 | — | — | 68,935 |
| Mutual Funds | 185,091 | — | — | 185,091 |
| Real Estate Inv. Trusts | 85,817 | — | — | 85,817 |
| Short Term Investments | — | 198,431 | — | 198,431 |
| Total Assets | $4,218,832 | $ 198,431 | $— | $4,417,263 |
Quoted Prices In Active Markets | Significant Other Observable Inputs | Significant Unobservable Inputs | Market Value at March 31, 2012 | |
| Level 1 | Level 2 | Level 3 | Total | |
| Quality | ||||
| Common Stock* | $79,102,675 | $— | $— | $79,102,675 |
| Depository Receipts | 15,130,981 | — | — | 15,130,981 |
| Short Term Investments | — | 276,268 | — | 276,268 |
| Total Assets | $94,233,656 | $276,268 | $— | $94,509,924 |
| Emerging Markets | ||||
| Common Stock* | $125,324,025 | $2,986,871 | $— | $128,310,896 |
| Common Stock Units | 801,608 | — | — | 801,608 |
| Depository Receipts | 21,446,125 | — | — | 21,446,125 |
| Mutual Funds | 174,358 | — | — | 174,358 |
| Preferred Stock | 8,993,350 | — | — | 8,993,350 |
| Real Estate Inv. Trusts | 104,673 | — | — | 104,673 |
| Short Term Investments | 4,921,331 | 634,079 | — | 5,555,420 |
| Total | $161,765,469 | $3,620,950 | $— | $165,386,420 |
| Foreign Value | ||||
| Common Stock* | $358,609,724 | $7,458,922 | $— | $366,068,646 |
| Depository Receipts | 25,701,161 | — | — | 25,701,161 |
| Short Term Investments | 31,139,346 | 59,451,000 | — | 90,590,346 |
| Total | $415,450,231 | $66,909,922 | $— | $482,360,153 |
| Foreign Value Small Cap | ||||
| Common Stock* | $79,337,525 | $4,662,554 | $244,762 | $84,244,841 |
| Preferred Stock | 2,172,991 | — | — | 2,172,991 |
| Short Term Investments | 1,931,268 | — | 1,931,268 | |
| Warrants | — | 4,821,881 | — | 4,821,881 |
| Total | $83,441,784 | $9,484,435 | $244,762 | $93,170,981 |
The following is a reconciliation of Level 3 assets for which unobservable inputs were used to determine fair value.
Foreign Value Small Cap Common Stock | |
| Balance as of 3/31/2011 | $2,263,456 |
| Realized gain (loss) | $(1,558,665) |
| Changed in unrealized appreciation (depreciation) | $(423,043) |
| Sales | $(36,986) |
| Balances as of 03/31/2012 | $244,762 |
| * | Refer to Schedule of Investments for breakout by industry or country. |
| * | There were no transfers in or out of Level 1 or Level 2 securities for the fiscal year ended March 31, 2012. |
| * | Common stock labeled as Level 2 for Emerging Markets and Foreign Value are categorized as Thailand securities in the Schedule of Investments. |
| * | Common stock labeled as a Level 3 security in Foreign Value Small Cap is categorized as a China security in the Schedule of Investments. |
In May 2011, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. ASU 2011-04 includes common requirements for measurement of and disclosure about fair value between U.S. GAAP and IFRS. ASU 2011-04 will require reporting entities to disclose the following information for fair value measurements categorized within Level 3 of the fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those observable inputs. In addition, ASU 2011-04 will require reporting entities to make disclosures about amounts and reasons for all transfers in and out of Level 1 and Level 2 fair value measurements. The new and revised disclosures are effective for fiscal years beginning after December 15, 2011 and for interim periods within those fiscal years. Management is currently evaluating the implications of ASU No. 2011-04 and its impact on the financial statements.
In December 2011, FASB issued ASU No. 2011-11 related to disclosures about offsetting assets and liabilities. The amendments in this ASU require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The ASU is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The guidance requires retrospective application for all comparative periods presented. Management is currently evaluating the impact ASU 2011-11 will have on the financial statements disclosures.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Guarantees and Indemnifications
In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. Each Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.
Subsequent Events
In preparing these financial statements, the Funds have evaluated events and transactions for potential recognition or disclosure through the date the financial were issued. There were no events or transactions that occurred during the period that materially impacted the accounts or disclosures in the Funds’ financial statements.
Security Transactions and Related Investment Income
Security transactions are accounted for on the trade date (the date the order to buy or sell is executed). Dividend income, less foreign taxes withheld, is recorded on the ex-dividend date, except that certain dividends from foreign securities where the ex-dividend date may have passed are recorded as soon as a Fund becomes aware of the ex-dividend data in the exercise of reasonable diligence. Withholding taxes on foreign dividends have been provided for in accordance with the company’s understanding of the applicable country’s tax rules and rates. Distributions received on securities that represent a return of capital or a capital gain is recorded as a reduction of cost of investments and/or as a realized gain. Each Fund estimates the components of distributions that may be considered nontaxable distributions or capital gain distributions for tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums. In determining the net gain or loss on securities sold, the cost of securities is determined on the identified cost basis. Each Fund’s investment income and realized and unrealized gains and losses are allocated among classes based upon the daily relative net assets.
Repurchase Agreements
The Funds’ custodian takes possession of securities collateralizing repurchase agreements through the federal book-entry system. Collateral is marked-to-market daily to ensure that the market value of the underlying assets remains sufficient to protect the Funds. The Funds may experience costs and delays in liquidating the collateral if the issuer defaults or enters into bankruptcy.
Foreign Currency Transactions
All monetary items denominated in foreign currencies are translated into U.S. dollars based on the prevailing exchange rate at the close of each business day. Income and expenses denominated in foreign currencies are translated at the prevailing rates of exchange when accrued or incurred.
Reported net realized gains and losses on foreign currency transactions represent net gains and losses from currency gains and losses realized between the trade and settlement dates on investment transactions, and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. The effects of changes in foreign currency exchange rates on investments in securities are not segregated in the Statement of Operations from the effects of changes in market prices of those securities, but are included with the net realized and unrealized gain or loss on investments.
Forward Foreign Currency Contracts
The Funds may enter into forward foreign currency contracts to manage their exposure to fluctuations in certain foreign currencies. A forward currency contract is a commitment to purchase or sell a foreign currency at a future date at a set price. The forward currency contracts are valued at the forward rate and are marked-to-market daily. The change in market value is recorded by the Fund as an unrealized gain or loss. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. In addition to the risks of financial investments mentioned above, risks arise from unanticipated movements in currency values.
Short Sales
From time to time, a Fund may engage in short sales (selling securities it did not own) as part of its investment activities. Upon selling a security short, the Fund’s Custodian segregates cash, cash equivalents or other appropriate liquid securities in an amount equal to the then current market value of the securities sold short and maintains such collateral until the Fund replaces the borrowed security. A Fund that borrows a security generally is required to pay any dividends or interest due on securities sold short. Such dividends and interest are recorded as an expense. Liabilities for securities sold short are valued daily and are recorded as unrealized appreciation (depreciation) on investments and securities sold short. The Fund records realized gain (loss) on a security sold short when a short position is terminated by the Fund. The Fund incures a loss if the price of a security increased between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund realizes a gain if the price of borrowed security declines between the date of a short sale and the date the Fund replaces the borrowed security.
Securities Lending
To generate additional income, each the Small Cap Fund, Emerging Markets Fund and Foreign Value Fund use Securities Finance Trust Company (“eSecLending”) as lending agent. The Small Cap Fund, Emerging Markets Fund and Foreign Value Fund may each lend up to 30% of its assets pursuant to certain agreements (“Securities Lending Agreements”) requiring that the loan be continuously secured by cash or securities. Securities are loaned by eSecLending to certain pre-approved brokers (“the borrowers”). The borrowers are required to provide cash or securities as collateral against loaned securities in the amount of 105% of the market value of borrowings for the Emerging Markets and Foreign Value Funds, and 102% of the borrowings for the Small Cap Fund. Collateral is marked-to-market daily. Cash collateral is invested in a registered money market fund.
The Trust uses State Street Bank and Trust Company (“State Street”) as lending agent for the Quality Fund pursuant to a Securities Lending Authorization Agreement. The Quality may lend up to 331/3% of its assets. Securities are loaned by State Street to certain pre-approved borrowers. The initial collateral received shall have (depending on the nature of the loaned securities and the collateral received) a value of 102% or 105% of the market value of the loaned securities, or such other value, but not less than 102% of the market value of the loaned securities, as may be applicable in the jurisdiction in which such loaned securities are customarily traded. Collateral of cash and/or securities is marked-to-market daily. Cash collateral is invested in a registered money market fund that may be managed by State Street or one of its affiliates.
Risks such as delay in recovery of securities may occur should the borrower of the securities fail financially or should the value of the securities loaned increase above the value of the collateral received. eSecLending provides indemnification insurance written by highly rated third party insurers to cover these potential risks. State Street provides indemnification against borrower default.
At March 31, 2012, the following Funds had collateral and loans outstanding of:
| Value of Collateral | Value of Loaned Securities | |
| Pear Tree Columbia Small Cap Fund | $4,251,048 | $4,147,352 |
| Pear Tree PanAgora Dynamic Emerging Markets Fund | 4,921,331 | 4,567,550 |
Credit Facility
State Street has made available to the Trust an uncommitted unsecured demand line of credit in the amount of $15 million. State Street may look solely to the assets of the Fund for the enforcement of any claim against that Fund. For the year ended March 31, 2012, the average interest rate on the outstanding principal amount was 1.40%. During year ended March 31, 2012 Small Cap, Quality, and Emerging Markets had an outstanding average daily loan balance of $2,150, $77,960, and $183,776 respectively. The maximum amount outstanding for the current lending agreement during the period was $221,255 for Small Cap, $3,785,664 for Quality and $2,203,950 for Emerging Markets. Interest expense amounted to $17, $602, and $1,422 respectively. At March 31, 2012 their were no loan payable balances for any of the Funds.
Expenses and Class Allocations
The majority of the expenses of the Funds are attributed to the individual Fund and Class for which they are incurred. Expenses that are not attributed to a specific Fund are allocated in proportion to the respective net assets of the Funds. Expenses allocable to a Fund are borne pro rata by the holders of both classes of shares of such Fund, except that 12b-1 Plan expenses will not be borne by the holders of Institutional Shares.
Distribution fees on Ordinary Shares are calculated based on the average daily net asset value attributable to the Ordinary Shares of the respective Fund. Institutional Shares are not subject to distribution fees. Shareholders of each class share all expenses and fees paid to the transfer agent, Pear Tree Institutional Services, for its services, which are allocated based on the net assets in each class and the ratable allocation of related out-of-pocket expenses. Income, common expenses and realized and unrealized gains and losses are calculated at the Fund level and allocated daily to each class of shares based on their respective percentage of adjusted net assets at the beginning of the day. (See Note 3)
Distributions to Shareholders
Distributions to shareholders are recorded as of the ex-dividend date. Distributions paid by each Fund with respect to each class of shares are calculated in the same manner, at the same time, and in the same amount, except that Ordinary Shares incur 12b-1 distribution fees while Institutional Shares do not. Distributions from net investment income for each Fund, if any, are declared and paid annually. Distributions from net realized gains for each Fund, if any, are generally declared and paid annually.
3. Management Fee, Advisory Contracts and Other Affiliate Transactions
The Funds have entered into a management agreement (the “Management Agreement”) with Pear Tree Advisors, Inc. (the “Manager”). Compensation of the Manager, for management and administration of the Funds, including selection and monitoring of the portfolio advisors, is paid monthly based on the average daily net asset value of each Fund for the month. The annual rate of such fees is 1.00% of the average daily total net assets of each of the Funds.
Beginning January 27, 2011 the Manager has agreed until July 31, 2012 to waive 0.15 percent of its management fee if the Quality Fund’s average daily net assets are up to $100 million and 0.25 percent of its management fee if the Fund’s average daily net assets are $100 million or more. Beginning April 1, 2011, the Manager has agreed to waive or reimburse Fund expenses relating to Institutional Shares of Quality Fund such that the total annual fund operating expenses relating to Institutional Shares is not greater than 1.00 percent. The Board has the right to terminate either or both arrangements in its discretion. In addition, under the Management Agreement, the Manager has agreed to reduce its compensation, and if necessary, assume expenses, with respect to Small Cap to the extent that the total expenses of this Fund individually exceeds 2% of average net assets for any fiscal year. Fund expenses subject to this limitation are exclusive of brokerage, interest, taxes and extraordinary expenses, which include incremental custody costs associated with international securities. Expenses are calculated gross of custody credits, if applicable.
For the twelve months ended March 31, 2012 aggregate management fees were $8,610,172.
The Manager has entered into advisory contracts with the following subadvisors (collectively the “Advisors”) to provide investment advisory services to the following Funds: Columbia Partners, L.L.C., Investment Management (Small Cap, Quality and Micro Cap), PanAgora Asset Management, Inc. (Emerging Markets), and Polaris Capital Management, LLC (Foreign Value and Foreign Value Small Cap.)
For services rendered, the Manager pays to the Advisor of a Fund a fee based on a percentage of the average daily total net assets of the Fund. The fee for each Fund is determined separately. Currently, the fees paid by the Manager to the Advisors of the Funds are as follows:
| Small Cap | 0.47% of average daily total net assets |
| Micro Cap | 0.47% of average daily total net assets. |
| Quality | 0.10% of the first $100 million and |
| 0.08% of amounts in excess of $100 million but less than $250 million and | |
| 0.06% of amounts in excess of $250 million of average daily total net assets. | |
| Emerging Markets* | 0.47% of the first $300 million and |
| 0.50% of amounts in excess of $300 million of average daily total net assets | |
| Foreign Value | 0.35% of the first $35 million and |
| 0.40% of amounts in excess of $35 million but less than $200 million and | |
| 0.50% of assets in excess of $200 million of average daily total net assets | |
| Foreign Value Small Cap | 0.35% of the first $35 million and |
| 0.40% of amounts in excess of $35 million but less than $200 million and | |
| 0.50% of amounts in excess of $200 million of average daily total net assets; |
| * | Prior to February 1, 2012, the subadvisory fee paid was 0.40 as of the average daily net assets. |
The Funds have entered into a distribution agreement (the “Distribution Agreement”) with U.S. Boston Capital Corporation (the “Distributor”). For its services under the Distribution Agreement, the Distributor received a monthly fee at the annual rate of (i) 0.25% of the average daily net asset value of the Ordinary Shares of the Funds.
Holders of Institutional Shares pay no portion of the 12b-1 Plan expenses of the Funds and are not entitled to vote on matters involving the 12b-1 Plan. During the year ended March 31, 2012 the aggregate distribution fees of the Funds were $1,832,813.
Transfer agent functions are provided to the Funds by Pear Tree Institutional Services, a division of the Manager (the “Transfer Agent”) pursuant to a transfer agent agreement (the “Transfer Agent Agreement”). The Transfer Agent Agreement provides for base fees that are payable to the Transfer Agent at an annual rate of 0.16% of the average daily total net asset value of each class of shares of the Funds and for reimbursement of out of pocket expenses. During the year ended March 31, 2012, the aggregate fees of the Funds were $1,448,926.
Pursuant to an Administration Agreement, the Manager provides certain administrative services to the Funds. During the year ended March 31, 2012, fees paid pursuant to this agreement were $318,477.
The Board of Trustees of the Funds has approved reimbursement to the Manager for certain costs associated with providing regulatory and compliance services to the Funds. For the year ended March 31, 2012, the Trustees have approved reimbursements that amounted to $197,976.
Custody and fund accounting services are provided by State Street. Custody credits generated by interest earned on un-invested cash balances maintained by the Funds are used to offset custodial expenses of the Funds.
For the year ended March 31, 2012, each Trustee of the Trust who was not an “interested person” of the Trust, as that term is defined in the 1940 Act, received fee for serving in that role of $27,000, and each of the Chairman of the Board’s Audit Committee and the Lead Independent Trustee of the Board received an additional $3,000. Compensation for the services of the Trustee who was an interested person of the Trust during that period was paid by the Manager. All fees paid to the Trustees were allocated among the Funds in proportion to their respective net assets.
4. Purchases and Sales
During the twelve months ended March 31, 2012, purchases of investment securities other than U.S. Government obligations and short-term investments, for Small Cap, Quality, Emerging Markets, Foreign Value, Foreign Value Small Cap and Micro Cap were $54,790,893, $73,145,322, $92,090,710, $73,676,860, $27,034,037 and $5,619,226, respectively. Sales of such securities for the Funds were $77,047,298, $53,037,573, $103,295,744, $69,947,465, $19,618,373 and $1,759,762, respectively.
5. Contingent Liability
The Trust maintains a joint fidelity bond with the Funds’ Transfer Agent through ICI Mutual Insurance Company (“ICI Mutual”). The annual premium is allocated among the Funds and the Transfer Agent. Additionally, the Funds have committed to ICI Mutual up to 300% of the annual premium, one third of which was provided in cash, with each Fund’s pro rata portion recorded as an asset. The remainder is secured with an irrevocable letter of credit.
��
6. Concentration of Risk
The relatively large investments of Emerging Markets in countries with limited or developing capital markets may involve greater risks than investments in more developed markets and the prices of such investments may be volatile. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of the Fund’s investments and the income they generate, as well as the Fund’s ability to repatriate such amounts.
7. Federal Income Taxes
It is the policy of the Funds to distribute all of their taxable income within the prescribed time and otherwise comply with the provisions of the Internal Revenue Code (“IRC”) applicable to regulated investment companies. Therefore no Federal income tax provision is required.
The tax components of capital shown in the following tables represent: (1) losses or deductions the portfolios may be able to offset against income and gains realized in future years, (2) distribution requirements the portfolios must satisfy under the income tax regulations, and (3) unrealized appreciation or depreciation of investments for federal income tax purposes.
Certain Funds had capital loss carryovers at March 31, 2012. The accumulated capital losses noted in the table may be available to offset future realized capital gains and thereby reduce future taxable gain distributions. As of March 31, 2012 the capital loss carryovers were as follows:
| Portfolio | Capital Loss Expires March 31, 2017 | Capital Loss Expires March 31, 2018 | Capital Loss Expires March 31, 2019 | Capital Loss No Expiration Short Term | Total Capital Loss |
| Small Cap Fund | $ | $19,937,546 | $— | $— | $19,937,546 |
| Micro Cap Fund | — | — | — | — | — |
| Quality Fund | — | 8,935,504 | — | — | 8,935,504 |
| Emerging Markets Fund | — | 23,648,614 | — | — | 23,648,614 |
| Foreign Value Fund | 73,956,484 | 131,156,114 | 10,547,106 | — | 215,659,704 |
| Foreign Value Small Cap Fund | — | — | — | 1,085,262 | 1,085,262 |
As a result of the passage of the Registered Investment Company Modification Act of 2010 (″the Act″), losses incurred in this fiscal year and beyond retain their character as short-term or long-term and have no expiration date and are utilized before capital losses incurred prior to the enactment of the Act. During the fiscal year ending March 31, 2012, capital loss carryovers in the amount of $9,577,081, $0,$3,509,557, $11,187,971, $6,652,336, and $0 were utilized by Small Cap, Micro Cap, Quality, Emerging Markets, Foreign Value, and Foreign Value Small Cap respectively.
The Funds recognize the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by the tax authorities. Management has analyzed the Funds’ tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years 2009-2011, or expected to be taken in the Funds’ 2012 tax returns. The Funds identify their major tax jurisdictions at U.S. Federal and MassachusettsState; however the Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
The primary differences between book and tax appreciation or depreciation of investments consist of wash sale loss deferrals, return of capital distributions by real estate investment trusts (“REITs”), mark to market on passive foreign investment companies (“PFICs”) held and foreign capital gains taxes accrued. The net tax appreciation/(depreciation) in the table below includes unrealized tax gain/(loss) on foreign currency and investments.
| March 31, 2012 | ||||||
| Portfolio | Undistributed Ordinary Income | Undistributed Long-Term Gains | Accumulated Capital Losses | Post- October Deferral | Net Tax Appreciation/ (Depreciation) | Total |
| Small Cap Fund | $— | $— | $(19,937,546) | $(771,971) | $24,793,895 | $4,084,378 |
| Micro Cap Fund | 47,894 | 19 | — | — | 360,035 | 407,948 |
| Quality Fund | 296,610 | — | (8,935,504) | — | 9,597,742 | 958,848 |
| Emerging Markets Fund | 1,545,856 | — | (23,648,614) | (2,071,374) | 11,338,590 | (12,835,542) |
| Foreign Value Fund | 4,231,673 | — | (215,659,704) | (46,890,214) | 19,908,556 | (238,409,689) |
| Foreign Value Small Cap Fund | 1,373,631 | — | (1,085,262) | (1,575,973) | 11,154,552 | 9,866,948 |
At March 31, 2012, the tax composition of dividends was as follows:
| Portfolio | Ordinary Income | Long Term Capital Gains | Tax Return Of Capital |
| Small Cap Fund | $264,867 | $— | $— |
| Micro Cap Fund | 27,343 | — | — |
| Quality Fund | 779,356 | — | — |
| Emerging Markets Fund | 3,277,585 | — | — |
| Foreign Value Fund | 2,442,343 | — | — |
| Foreign Value Small Cap Fund | 2,552,853 | 6,985,146 | — |
At March 31, 2011, the tax composition of dividends was as follows:
| Portfolio | Ordinary Income | Long Term Capital Gains | Tax Return Of Capital |
| Small Cap Fund | $576,308 | $— | $— |
| Quality Fund | 508,978 | — | — |
| Emerging Markets Fund | 2,500,288 | — | — |
| Foreign Value Fund | 4,701,653 | — | — |
| Foreign Value Small Cap Fund | 786,778 | 3,421,584 | — |
Accounting principles generally accepted in the United States require that certain components of net assets be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. For the year ended March 31, 2012, permanent differences in book and tax accounting have been reclassified to shares of beneficial interest, undistributed/(over-distributed) net investment income and accumulated net realized gain/(loss) on investments and foreign denominated assets, liabilities and currency.
| Increase/(Decrease) | |||
Shares of Beneficial Interest | Undistributed Net Investment Income (Loss) | Accumulated Net Gain/ (Loss) on Investments and Foreign Denominated Assets, Liabilities and Currency | |
| Small Cap Fund | $(191,459) | $191,041 | $418 |
| Micro Cap Fund | — | 11,464 | (11,464) |
| Quality Fund | — | — | — |
| Emerging Mkts. Fund | 3 | (128,473) | 128,470 |
| Foreign Value Fund | — | 235,613 | (235,613) |
| Foreign Value Small Cap Fund | — | 71,281 | (71,281) |
The permanent differences primarily relate to net operating losses, wash sales, return of capital distributions by real estate investment trusts (REITs), foreign currency reclasses and adjustments for sale of shares in passive foreign investment corporations (PFICs).
8. Transactions in Shares of Beneficial Interest
Transactions in shares of beneficial interest were as follows:
Year Ended March 31, 2012 | Year Ended March 31, 2011 | |||
| Shares | Dollars | Shares | Dollars | |
| Small Cap | ||||
| Ordinary Shares | ||||
| Shares sold | 204,289 | $3,847,210 | 504,964 | $9,036,002 |
| Shares issued in reinvestment of distributions | 12,559 | 223,433 | 26,733 | 499,111 |
| Shares redeemed | (1,214,227) | (22,501,607) | (868,984) | (15,175,822) |
| Net Change | (997,379) | (18,430,964) | (337,287) | (5,640,709) |
| Institutional Shares | ||||
| Shares sold | 28,740 | $602,217 | 33,512 | $648,053 |
| Shares issued in reinvestment of distributions | 1,188 | 23,866 | 1,975 | 41,624 |
| Shares redeemed | (105,589) | (2,254,026) | (73,515) | (1,430,986) |
| Net Change | (75,661) | (1,627,943) | (38,028) | (741,309) |
| Total Net Change For Fund | $(20,058,907) | $(6,382,018) | ||
| Micro-Cap | ||||
| Ordinary Shares | ||||
| Shares sold | 257,286 | $2,709,402 | ||
| Shares issued in reinvestment of distributions | 1,977 | 20,696 | ||
| Shares redeemed | (3,369) | (38,426) | ||
| Net Change | 255,894 | 2,691,672 | ||
| Institutional Shares | ||||
| Shares sold | 117,795 | $1,238,876 | ||
| Shares issued in reinvestment of distributions | 606 | 6,150 | ||
| Shares redeemed | (69) | (756) | ||
| Net Change | 118,332 | 1,244,270 | ||
| Total Net Change for Fund | $3,935,942 | |||
Year Ended March 31, 2012 | Year Ended March 31, 2011 | ||||
| Shares | Dollars | Shares | Dollars | ||
| Quality | |||||
| Ordinary Shares | |||||
| Shares sold | 2,193,162 | $28,121,497 | 753,057 | $9,103,352 | |
| Shares issued in reinvestment of distributions | 57,406 | 738,822 | 40,824 | 471,929 | |
| Shares redeemed | (881,877) | (11,630,783) | (473,260) | (5,324,465) | |
| Net Change | 1,368,691 | 17,229,536 | 320,621 | 4,250,816 | |
| Institutional Shares | |||||
| Shares sold | 109,858 | $1,509,683 | 34,077 | $434,510 | |
| Shares issued in reinvestment of distributions | 875 | 11,723 | 316 | 3,797 | |
| Shares redeemed | (2,617) | (36,053) | (21,480) | (244,213) | |
| Net Change | 108,116 | 1,485,353 | 12,913 | 194,094 | |
| Total Net Change For Fund | $18,714,889 | $4,444,910 | |||
| Emerging Markets | |||||
| Ordinary Shares | |||||
| Shares sold | 1,459,911 | $31,633,636 | 3,675,329 | $82,415,682 | |
| Shares issued in reinvestment of distributions | 139,649 | 2,774,833 | 93,424 | 2,247,776 | |
| Shares redeemed | (2,199,616) | (49,591,856) | (6,451,916) | (146,132,731) | |
| Net Change | (600,056) | (15,183,387) | (2,683,163) | (61,469,273) | |
| Institutional Shares | |||||
| Shares sold | 381,612 | $8,900,177 | 307,919 | $6,681,226 | |
| Shares issued in reinvestment of distributions | 11,730 | 235,896 | 4,601 | 112,212 | |
| Shares redeemed | (156,767) | (3,612,289) | (1,093,015) | (25,587,724) | |
| Net Change | 236,575 | 5,523,784 | (780,495) | (18,794,286) | |
| Total Net Change For Fund | $(9,659,603) | $(80,263,559) | |||
Year Ended March 31, 2012 | Year Ended March 31, 2011 | ||||
| Shares | Dollars | Shares | Dollars | ||
| Foreign Value | |||||
| Ordinary Shares | |||||
| Shares sold | 8,250,958 | $105,991,337 | 3,241,340 | $41,652,537 | |
| Shares issued in reinvestment of distributions | 143,827 | 1,675,579 | 263,174 | 3,621,279 | |
| Shares redeemed | (5,266,706) | (70,053,784) | (8,025,937) | (96,826,111) | |
| Net Change | 3,128,079 | 37,613,132 | (4,521,423) | (51,552,295) | |
| Institutional Shares | |||||
| Shares sold | 2,584,272 | $35,601,604 | 498,257 | $6,338,939 | |
| Shares issued in reinvestment of distributions | 54,464 | 633,418 | 58,949 | 810,543 | |
| Shares redeemed | (809,126) | (10,600,210) | (658,345) | (8,602,775) | |
| Net Change | 1,829,610 | 25,634,812 | (101,139) | (1,453,293) | |
| Total Net Change For Fund | $63,247,944 | $(53,005,588) | |||
| Foreign Value Small Cap | |||||
| Ordinary Shares | |||||
| Shares sold | 1,176,878 | $11,068,644 | 2,979,093 | $31,548,656 | |
| Shares issued in reinvestment of distributions | 926,810 | 7,256,917 | 343,469 | 3,723,203 | |
| Shares redeemed | (1,032,500) | (10,170,266) | (8,487,003) | (88,399,013) | |
| Net Change | 1,071,188 | 8,155,295 | (5,164,441) | (53,127,154) | |
| Institutional Shares | |||||
| Shares sold | 315,655 | $3,043,564 | 1,344,178 | $14,744,709 | |
| Shares issued in reinvestment of distributions | 254,131 | 1,992,383 | 37,867 | 410,859 | |
| Shares redeemed | (429,734) | (4,060,732) | (30,573) | (327,118) | |
| Net Change | 140,052 | 975,215 | 1,351,472 | 14,828,450 | |
| Total Net Change for Fund | $9,130,510 | $(38,298,704) | |||
Federal Tax Information (unaudited)
Designation Requirements at March 31, 2012
| Qualified Dividend Income Percentage | |
| Small Cap Fund | 100% |
| Micro Cap | 43% |
| Quality Fund | 100% |
| Emerging Markets Fund | 100% |
| Foreign Value Fund | 100% |
| Foreign Value Small Cap Fund | 87% |
The Funds may elect to pass through under section 853 of the Internal Revenue Code foreign tax credit to its shareholders for the year ended March 31, 2012. The total amount of foreign taxes that is expected to pass through to shareholders and the respective foreign source income are as follows:
| Foreign Tax Credit | Foreign Source Income | |
| Emerging Market Fund | 583,807 | 6,305,044 |
| Foreign Value Fund | 1,456,234 | 12,227,208 |
| Foreign Value Small Cap | 184,950 | 3,545,400 |
PEAR TREE FUNDS
INFORMATION FOR SHAREHOLDERS
Quarterly Portfolio Disclosure
Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (Call 1-800-SEC-0330 for more information). For a complete list of a fund’s portfolio holdings, you may also view the most recent monthly holdings report, semi-annual report or annual report on the Pear Tree Funds’ web site at www.peartreefunds.com.
Portfolio Proxy Voting Policies and Information
Information on the Funds’ proxy voting policies and on how the Pear Tree Funds voted proxies related to portfolio securities for the 12-month period ended June 30, 2011 is available without charge online at www.peartreefunds.com and at www.sec.gov . You may also call 1-800-326-2151 to request a free copy of the proxy voting information or the proxy voting policies.
Household Delivery of Fund Documents
With your consent, the Trust may send a single proxy statement, prospectus and shareholder report to your residence for you and any other member of your household who has an account with the Funds. If you wish to revoke your consent to this practice, you may do so by notifying the Fund’s transfer agent, by phone or in writing (see “For Account Information”). The mailing of separate proxy statements, prospectuses and shareholder reports will begin within 30 days after receiving your notice.
PEAR TREE FUNDS
MANAGEMENT CONTRACT AND ADVISORY
CONTRACT APPROVAL (unaudited)
On November 11, 2011, the Board of Trustees of the Trust, including those Trustees who were not “interested persons” of the Trust or the Manager (the “Independent Trustees”), approved an amended sub-advisory agreement (the “Amended Advisory Agreement”) between the Manager and PanAgora Capital Management, LLC (“PanAgora”) relating to the Pear Tree PanAgora Dynamic Emerging Markets Fund (the “Fund”). The Amended Advisory Agreement amended the then-current sub-advisory agreement (the “Advisory Agreement”) between the Manager and PanAgora, which had been last reapproved by the Board in May 2011.
Prior to approving the Amended Advisory Agreement, the Board completed a review of certain information from the Manager and PanAgora, including the following: (a) information provided by PanAgora in connection with the annual contract review of the Fund; (b) other information relevant to an evaluation of the nature, extent and quality of the services provided by PanAgora to the Fund; and (c) the Manager’s recommendation that the Amended Advisory Agreement be approved.
The Independent Trustees relied upon the advice of independent counsel and all Trustees relied on their own business judgment in determining the material factors to be considered in evaluating the Amended Advisory Agreement and the weight to be given to each such factor. The conclusions reached by the Board were based on a comprehensive evaluation of all of the information provided and were not the result of any one factor. Moreover, each Trustee may have afforded different weight to the various factors in reaching his conclusions with respect to the reappointment of PanAgora.
Nature, Quality and Extent of Services Provided. In considering whether to approve the Amended Advisory Agreement, the Board evaluated the nature, extent and quality of services expected to be provided to the Fund by PanAgora. The Board considered the investment management and related services currently provided by PanAgora, including the quantity and quality of the resources available to provide such services. Among other things, the Board considered information provided by the Manager and PanAgora as to the operations, facilities, organization and personnel of PanAgora, and information provided by the Manager and PanAgora describing the qualifications and experience of the individuals who would be responsible for performing various investment related services to the Fund. The information included information provided at the meeting and certain information previously provided by PanAgora to the Board in connection with the renewal of the Advisory Agreement. The Board also considered whether PanAgora had the capabilities, resources and personnel necessary to continue to provide advisory services to The Fund, and concluded that it did. The Board also considered the quality of the compliance program of PanAgora based on PanAgora’s current role serving as the sub-advisor with respect to the Fund. Additionally, the Board considered the demonstrated ability of PanAgora to work cooperatively with the Manager and the officers of the Trust on investment, compliance and administrative matters relating to the Fund.
The Board concluded that it was satisfied with the nature, extent and quality of services expected to be provided by PanAgora.
Investment Performance. The Board reviewed the Fund’s investment performance as well as the performance of a Selected Peer Group of mutual funds, and the performance of an appropriate index or combination of indices. The Board noted that the Fund underperformed its Selected Peer Group for the three- and five- year periods, but outperformed the Selected Peer Group for the one- and ten- year periods.
Sub-advisory Fees and Expenses. The Board considered the Fund’s management fee, proposed amended subadvisory fee and expense ratio compared with the fees and expense ratios of the Selected Peer Group. The Board noted that the Fund’s management fee is above the average and the median of the funds in its Selected Peer Group, and that the Fund’s total expense ratio is above the average and the median of the Fund’s Sub-Advised Peer Group. Additionally, the Board noted that the Fund’s contractual management fee is competitive with the assets weighted average of the Selected Peer Group at all asset levels presented and is lower than the assets weighted average of the Sub-Advised Peer Group at all asset levels presented, even with the proposed increase in fees payable to PanAgora. After reviewing the foregoing information, and in light of the nature, extent and quality of the services expected to be provided by PanAgora, the Board concluded that the sub-advisory fee is fair and reasonable.
Profitability. The Board did not consider the profitability of PanAgora to be a material factor based on the representation from the Manager that it negotiated the sub-advisory fee with PanAgora on an arm’s-length basis.
Economies of Scale.The Board considered the extent to which economies of scale can be expected to be realized by PanAgora, on the one hand, and the Fund, on the other hand, as the assets of the Fund increase. In this regard, the Trustees noted that the fee levels and breakpoints contained in the proposed management fee, including the proposed management fee waiver, and the proposed sub-advisory fee would not result in any increase in expenses to the Fund at increased asset levels. The Trustees also noted that the proposed management fee arrangements would be expected to result in lower revenues to the Manager at current and expected increased future asset levels. Based on the foregoing, the Board concluded that the proposed fee schedule, including the breakpoints in the sub-advisory fee, was acceptable.
Other Benefits to the Sub-Adviser. The Board considered the incidental, or “fall-out,” benefits that accrue to PanAgora and any of its affiliates by virtue of its relationship to the Fund. The Board concluded that incidental benefits were reasonable.
Conclusion. Based on its evaluation of all material factors and assisted by the advice of independent counsel, the Board of Trustees, including the Independent Trustees, concluded that the sub-advisory fee to be paid to PanAgora, as proposed, is fair and reasonable, and that the Amended Advisory Agreement should be approved.
PEAR TREE FUNDS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Trustees of the Pear Tree Funds
We have audited the accompanying statements of assets and liabilities of the Pear Tree Columbia Small Cap Fund (formerly Quant Small Cap Fund),Pear Tree Columbia Micro Cap Fund, Pear Tree Quality Fund (formerly Quant Quality Fund), Pear Tree PanAgora Dynamic Emerging Markets Fund (formerly Quant Emerging Markets Fund), Pear Tree Foreign Value Fund (formerly Quant Foreign Value Fund) and Pear Tree Polaris Foreign Value Small Cap Fund (formerly Quant Foreign Value Small Cap Fund), each series of the Pear Tree Funds (“the Funds”) formerly the Quantitative Group of Funds, including the schedules of investments, as of March 31, 2012, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended except for the Pear Tree Polaris Foreign Value Small Cap Fund in which the financial highlights were for each of the three years in the period then ended and the period May 1, 2008 (commencement of operations) to March 31, 2009 and the Pear Tree Columbia Micro Cap Fund in which the statement of operations, statement of changes in net assets and the financial highlights were for the period September 7, 2011 (commencement of operations) to March 31, 2012. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of March 31, 2012 by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the above mentioned series of the Pear Tree Funds, as of March 31, 2012, the results of their operations, the changes in their net assets, and the financial highlights for the periods indicated above, in conformity with accounting principles generally accepted in the United States of America.
TAIT, WELLER & BAKER LLP
Philadelphia, Pennsylvania
May 29, 2012
PEAR TREE FUNDS
PRIVACY NOTICE
| WHAT DO WE DO WITH YOUR PERSONAL INFORMATION? | |
| Why? | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share and protect your personal information. Please read this notice carefully to understand what we do. |
| What? | The types of personal information we collect and share depend on the product or service you have with us. This information can include: • Social Security Numbers • Names, Addresses and Telephone numbers • Account Balances • Account Transactions • Transaction History • Information regarding your investments in the Pear Tree Mutual Funds • Other account information |
| How? | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reason Pear Tree chooses to share and whether you can limit this sharing. |
| Reasons we can share your personal information | Do we share? | Can you limit this sharing? |
For our everyday business purposes Such as to process your transaction, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
For our marketing purposes To offer our products and services to you | No | We don’t share |
| For joint marketing with other financial companies | No | We don’t share |
For our affiliates’ everyday business purposes Information about your transactions and experiences | No | We don’t share |
For our affiliates’ everyday business purposes Information about your creditworthiness | No | We don’t share |
| For non-affiliates to market to you | No | We don’t share |
| Questions? | CALL 1-800-326-2151 |
| Who is providing this notice? |
Pear Tree Advisors, Inc. and its Affiliates (collectively “Pear Tree”). Our affiliates include the following entities: •Pear Tree Advisors, Inc.•Pear Tree Funds •Pear Tree Partners, LP•U.S. Boston Capital Corporation We do not share information among our affiliates for marketing purposes. |
| What we do | |
| How does Pear Tree protect my personal information? | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These include computer safeguards and secured files and buildings. |
| How does Pear Tree collect my personal information? | We collect your personal information, for example, when you: • Open an account • Send us a check or wire • Provide account information • Give us your contact information • Transfer assets from another firm |
| Why can’t I limit all sharing? | Federal law gives you the right to limit some but not all sharing related to: • Affiliates’ everyday business purposes — information about your creditworthiness • Affiliates from using your information to market to you • Non-affiliates to market to you. State laws and individual companies may give you additional rights to limit sharing. |
| Definitions | |
| Affiliates | Companies related by common ownership or control. They can be financial and nonfinancial companies. • Pear Tree does notshare your information with affiliates to enable their marketing efforts. |
| Non-affiliates | Companies not related by common ownership or control. They can be financial and nonfinancial companies. • Pear Tree does notshare with non-affiliates to enable their marketing efforts. |
| Joint marketing | A formal agreement between non-affiliated financial companies that together market financial products or services to you. • Pear Tree does not participate in joint marketing efforts |
PEAR TREE FUNDS
TRUSTEES AND OFFICERS
The tables below identify the current Trustees and officers of the Trust, their ages, their present positions with the Trust, terms of office with the Trust and length of time served, principal occupations over at least the last five years and other directorships/trusteeships held. Each Trustee and officer holds office for an indefinite term until his or her successor is chosen and qualified or until his or her earlier death, resignation, retirement or removal. The mailing address of each of the Trustees and Officers of the Trust is 55 Old Bedford Road, Suite 202, Lincoln, Massachusetts01773.
Messrs. Armstrong, Bulbrook, Dunlap and Marshall are members of the Funds’ Audit Committee. Mr. Marshall is the Chair of the Audit Committee. The Fund’s Statement of Additional Information (“SAI”) includes additional information about the Fund Trustees and is available without charge, upon request. To obtain a free copy of the current SAI, please access the Funds’ web site at www.peartreefunds.com or call shareholder services at 1-800-326-2141.
Trustees who are not Interested Persons of the Trust
The following individuals are Trustees of the Trust (each, a “Trustee”), but not “interested persons” of the Trust, as that term is defined in the 1940 Act.
Name and Age | Position Held With Trust | Term of Office/ Length of Time Served | Principal Occupation(s) during Past Five Years | Number of Portfolios in Fund Complex Overseen | Other Directorships Held by Trustee in Public Companies |
| Robert M. Armstrong (73) | Trustee | Indefinite Term (1985 to present) | Independent Director and Consultant Services (1998–Present) | 6 | NewPage Corporation (2006–Present); NewPage Holding Corporation (2006–Present); NewPage Group, Inc. (2006–Present) |
John M. Bulbrook (69) | Trustee | Indefinite Term (1985 to present) | CEO and Treasurer, John M. Bulbrook Insurance Agency, Inc. (dba/Bulbrook/Drislane Brokerage) (distributor of financial products, including insurance) (1984–Present); | 6 | None |
William H. Dunlap (61) | Trustee | Indefinite Term (October 2006 to present) | Executive Director, New Hampshire Historical Society, (Feb. 2010–Present); Principal, William H. Dunlap &Company (consulting firm) (2005–Present); President, EQ Rider, Inc., (equestrian clothing sales) (1998–2008); Director, Merrimack County Savings Bank (2005–Present); Director, Merrimack Bank Corp. (2005–Present) | 6 | None |
| Clinton S. Marshall (54) | Trustee | Indefinite Term (April 2003 to present) | Owner, Coastal CFO Solutions, outsource firm offering CFO solutions to businesses (1998–Present); CFO, Fore River Company (2002–Present) | 6 | None |
Trustees and Officers who are Interested Persons of the Trust
The following individuals are Trustees or officers of the Trust who are “interested persons” of the Trust, as that term is defined in the 1940 Act.
Name and Age | Position Held With Trust | Term of Office/ Length of Time Served | Principal Occupation(s) during Past Five Years | Number of Portfolios in Fund Complex Overseen | Other Directorships Held by Trustee/Officer in Public Companies |
| Willard L. Umphrey * (70) | Trustee, President, Chairman (1985 to present) | Indefinite Term (1985 to present) | Director, U.S. Boston Capital Corporation; President, Pear Tree Advisors, Inc. | 6 | U.S. Boston Corporation; U.S. Boston Asset Management Corporation; Pear Tree Advisors, Inc.; Pear Tree Partners Management LLC; USB Corporation; USB Atlantic Associates, Inc.; U.S. Boston Insurance Agency, Inc.; U.S. Boston Capital Corporation |
| Leon Okurowski (69) | Vice President, Treasurer (1985 to present) | (1985 to present) | Director and Vice President, U.S.Boston Capital Corporation; Treasurer, Pear Tree Advisors, Inc.; Trustee, Pear Tree Funds (4/17/1985–9/30/2004) | N/A | Everest USB Canadian Storage, Inc.; Pear Tree Advisors, Inc.; U.S. Boston Corporation; U.S. Boston Asset Management Corporation; MedCool, Inc., USB Corporation; USB Everest Management, LLC; USB Everest Storage LLC; USB Atlantic Associates, Inc.; U.S. Boston Insurance Agency, Inc.; U.S. Boston Capital Corporation |
| Deborah A. Kessinger (48) | Assistant Clerk and Chief Compliance Officer | (April 2005 to Present) | Senior Counsel (since 9/04), President (since 8/07) and Chief Compliance Officer (since 12/05), U.S. Boston Capital Corporation; Senior Counsel (since 9/2004) and Chief Compliance Officer (since 10/2006), Pear Tree Advisors, Inc.; Chief Compliance Officer and General Counsel, Wainwright Investment Counsel, LLC (investment management firm) (2000–2004); Compliance Attorney, Forefield, Inc. (software provider) (2001–2004) and Compliance Consultant (2007 to present) | N/A | None |
Diane Hunt (50) | Assistant Treasurer | (June 2010 to Present) | Controller (Since 3/2010) Pear Tree Advisors, Inc.; Accountant (Since 1984) U.S. Boston Capital Corporation | N/A | None |
Kelly Lavari (44) | Clerk | (November 2010 to Present) | Regulatory Compliance Manager (since April 2008), Legal and Compliance Associate (4/2005–4/2008) Pear Tree Advisors, Inc. | N/A | None |
| * | Trustee has been determined to be an “Interested Trustee” by virtue of, among other things, affiliation with one or more of the trust, the Funds’ investment advisor, Pear Tree Advisors and the Funds’ distributor, U.S. Boston Capital Corporation. |
PEAR TREE FUNDS
NOTES
This page intentionally left blank.
PEAR TREE FUNDS
NOTES
This page intentionally left blank.
PEAR TREE FUNDS
NOTES
This page intentionally left blank.
PEAR TREE FUNDS
NOTES
This page intentionally left blank.
PEAR TREE FUNDS
SERVICE PROVIDERS
| Manager | Pear Tree Advisors, Inc., 55 Old Bedford Road, Lincoln, MA01772 |
| Subadvisers | Columbia Partners, L.L.C., Investment Management, 5425 Wisconsin Avenue, Suite 700, Chevy Chase, MD20815 PanAgora Asset Management, Inc., 470 Atlantic Avenue, 8th Floor, Boston, MA02210 Polaris Capital Management, LLC, 125 Summer Street, Boston, MA02210 |
| Distributor | U.S. Boston Capital Corporation, 55 Old Bedford Road, Lincoln, MA01773 |
| Custodian | State Street Bank and Trust Company, One Lincoln Street, Boston,MA02111 |
| Fund Accountant | State Street Bank and Trust Company, One Lincoln Street, Boston, MA02111 |
| Transfer Agent | Pear Tree Institutional Services, 55 Old Bedford Road, Lincoln, MA01773 |
Independent Registered Public Accounting Firm | Tait, Weller & Baker LLP, 1818 Market Street, Suite 2400 Philadelphia, PA19103 |
| Legal Counsel | McLaughlin & Hunt LLP, Ten Post Office Square, 8th Floor, Boston, MA02109 |
| For Account Information | For Pear Tree Funds information, contact your financial adviser or, if you receive account statements directly from Pear Tree Funds, you can also call 1-800-326-2151. Telephone representatives are available from 8:30 a.m. to 4:30 p.m. Eastern Time. Or visit our website, www.peartreefunds.com |
[Back Cover]
ITEM 2. Code of Ethics
As of the end of the period covered by this Form N-CSR, the registrant has adopted a code of ethics (as defined in Item 2(b) of Form N-CSR) that applies to the registrant’s principal executive officer, principal financial officer and principal accounting officer and controller (the “Code”). During the period covered by the report, there were no material amendments to the Code or any waivers granted from its provisions. A copy of the Code is filed with this report as an exhibit.
ITEM 3. Audit Committee Financial Expert
The registrant’s Board of Trustees has determined that Mr. Clinton S. Marshall is an “audit committee financial expert” as defined in Item 3 of Form N-CSR. Mr. Marshall is “independent” under the standards set forth in Item 3 of Form N-CSR.
ITEM 4. Principal Accountant Fees and Services
The following chart shows the aggregate fees billed in each of the last two fiscal years for services rendered by the registrant’s principal accountant, Tait, Weller and Baker, LLP (“Tait Weller”). The registrant’s Audit Committee approved the selection of Tait Weller as independent registered public accounting firm on September 14, 2007.
| 2011 | 2012 | ||
| Audit Fees* | Tait Weller | $113,400 | $128,900 |
| Audit-Related Fees** | Tait Weller | $37,000 | $38,000 |
| Tax Fees*** | Tait Weller | $18,400 | $20,900 |
| All Other Fees | Tait Weller | $0 | $0 |
* Audit fees include all services related to the audit of the financial statements, including review of the registration statement and the issuance of related consents.
** These amounts represent fees paid for the annual audit of the registrant’s transfer agent, Pear Tree Institutional Services, a division of Pear Tree Advisors, Inc., the registrant’s investment advisor.
*** Tax fees include review of the registrant’s tax filings.
| (e)(1) | To the extent required by applicable law, pre-approval by the Audit Committee of the Board is needed for: |
(i) all audit and permissible non-audit services rendered to the Fund and
(ii) all permissible non-audit services rendered to Pear Tree Advisors, Inc. if the services relate directly to the operations and financial reporting of the Registrant. Pre-approval is currently on an engagement-by-engagement basis. In the event pre-approval of such services is necessary between regular meetings of the Audit Committee and it is not practical to wait to seek pre-approval at the next regular meeting of the Audit Committee, such pre-approval of services may be referred to the President of the Fund for approval; provided that the President may not pre-approve any individual engagement for such services exceeding $5,000 or multiple engagements for such services in the aggregate exceeding $5,000 between such regular meetings of the Audit Committee. Any engagement pre-approved by the President between regular meetings of the Audit Committee shall be presented for ratification by the entire Audit Committee at its next regularly scheduled meeting.
(e)(2) No services in the past two fiscal years were approved by the Audit Committee pursuant to Rule 2-01(c)(7)(i)(C) of Regulation S-X.
(f) Not applicable.
| (g) | The following chart shows the aggregate non-audit fees billed by Tait Weller for services rendered to the registrant and the registrant’s investment advisor (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. |
| 2011 | 2012 | ||
| Non-Audit Fees | Tait Weller | $0 | $0 |
| (h) | The Audit Committee of the registrant’s Board of Trustees considered the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X and concluded that such services are compatible with maintaining the principal accountant’s independence. |
ITEM 5. Audit Committee of Listed Registrants
Not applicable.
ITEM 6. Schedule of Investments
Not applicable.
ITEM 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
ITEM 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
| ITEM 9 | Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers |
Not applicable.
ITEM 10 Submission of Matters to a Vote of Security Holders
Not applicable.
ITEM 11. Controls and Procedures
(a) The President and Treasurer of the registrant have concluded, based on their evaluation of the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act) as of a date within 90 days of the filing date of this report on Form N-CSR, that the design and operation of such procedures provide reasonable assurance that information required to be disclosed by the registrant in this report on Form N-CSR is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
(b) There has been no change in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
ITEM 12. Exhibits
(a)(1) Code of ethics
(a)(2) Certifications pursuant to Rule 30a-2(a) by the chief executive and financial officers.
(b) Certification pursuant to Rule 30a-2(b) and Section 906 by the chief executive and financial officers.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Pear Tree Funds
By: /s/ Willard L. Umphrey
Willard L. Umphrey, President
Date: May 31, 2012
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/ Willard L. Umphrey
Willard L. Umphrey, President
Date: May 31, 2012
By: /s/ Leon Okurowski
Leon Okurowski, Treasurer
Date: May 31, 2012
EXHIBIT LIST
(a)(1) Code of ethics
(a)(2) Certifications pursuant to Rule 30a-2(a) by the chief executive and financial officers.
(b) Certification pursuant to Rule 30a-2(b) and Section 906 by the chief executive and financial officers.