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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, 2013 through September 30, 2013
ITEM 1. REPORTS TO SHAREOWNERS.
PEAR TREE FUNDS
Pear Tree Columbia Small Cap Fund
Pear Tree Quality Fund
Pear Tree PanAgora Dynamic Emerging Markets Fund
Pear Tree PanAgora Risk Parity Emerging Markets Fund
Pear Tree Polaris Foreign Value Fund
Pear Tree Polaris Foreign Value Small Cap Fund
SEMI-ANNUAL REPORT
September 30, 2013
TABLE OF CONTENTS
President’s Letter 1
Fund Expenses 2
Portfolio Manager Commentaries 4
Pear Tree Columbia Small Cap Fund 4
Pear Tree Quality Fund 6
Pear Tree PanAgora Dynamic Emerging Markets Fund 8
Pear Tree PanAgora Risk Parity Emerging Markets Fund 10
Pear Tree Polaris Foreign Value Fund 12
Pear Tree Polaris Foreign Value Small Cap Fund 14
Schedules of Investments 16
Pear Tree Columbia Small Cap Fund 16
Pear Tree Quality Fund 20
Pear Tree PanAgora Dynamic Emerging Markets Fund 24
Pear Tree PanAgora Risk Parity Emerging Markets Fund 32
Pear Tree Polaris Foreign Value Fund 47
Pear Tree Polaris Foreign Value Small Cap Fund 50
Statements of Assets and Liabilities 54
Statements of Operations 58
Statements of Changes in Net Assets 60
Financial Highlights 66
Notes to Financial Statements 78
Information for Shareholders 94
Management Contract and Advisory Contract Approval 95
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’ Semi-Annual Report for the six-month period ended September 30, 2013 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,
/s/ Willard Umphrey
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 the Funds’ Investment Manager and Sub-Advisers 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 being invested at the beginning of the period and held for the entire period from April 1, 2013 to September 30, 2013.
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 only 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 September 30, 2013
| Pear Tree Fund | Share Class | Total Return Description | Beginning Account Value 4/1/2013 | Ending Account Value 9/30/2013 | Annualized Expense Ratio | Expenses Paid* 4/1/2013 – 9/30/2013 |
| Small Cap | Ordinary | Actual | $1,000.00 | $1,139.10 | 1.51% | $8.12 |
| Hypothetical | $1,000.00 | $1,017.47 | 1.51% | $7.66 | ||
| Institutional | Actual | $1,000.00 | $1,140.90 | 1.26% | $6.77 | |
| Hypothetical | $1,000.00 | $1,018.75 | 1.26% | $6.38 | ||
| Quality | Ordinary | Actual | $1,000.00 | $1,032.80 | 1.29% | $6.57 |
| Hypothetical | $1,000.00 | $1,018.61 | 1.29% | $6.52 | ||
| Institutional | Actual | $1,000.00 | $1,034.40 | 0.97% | $4.92 | |
| Hypothetical | $1,000.00 | $1,020.23 | 0.97% | $4.89 | ||
| Emerging Markets | Ordinary | Actual | $1,000.00 | $948.60 | 1.74% | $8.48 |
| Hypothetical | $1,000.00 | $1,016.37 | 1.74% | $8.77 | ||
| Institutional | Actual | $1,000.00 | $949.70 | 1.48% | $7.24 | |
| Hypothetical | $1,000.00 | $1,017.64 | 1.48% | $7.49 | ||
| Risk Parity | Ordinary | Actual | $1,000.00 | $1,033.00 | 1.92% | $5.12 |
| Emerging Markets | Hypothetical | $1,000.00 | $1,015.47 | 1.92% | $9.68 | |
| Institutional | Actual | $1,000.00 | $1,033.00 | 1.68% | $4.48 | |
| Hypothetical | $1,000.00 | $1,016.67 | 1.68% | $8.47 | ||
| Foreign Value | Ordinary | Actual | $1,000.00 | $1,082.80 | 1.54% | $8.04 |
| Hypothetical | $1,000.00 | $1,017.35 | 1.54% | $7.78 | ||
| Institutional | Actual | $1,000.00 | $1,083.40 | 1.29% | $6.73 | |
| Hypothetical | $1,000.00 | $1,018.60 | 1.29% | $6.52 | ||
| Foreign Value | Ordinary | Actual | $1,000.00 | $1,053.30 | 1.60% | $8.24 |
| Small Cap | Hypothetical | $1,000.00 | $1,017.04 | 1.60% | $8.09 | |
| Institutional | Actual | $1,000.00 | $1,055.20 | 1.35% | $6.97 | |
| Hypothetical | $1,000.00 | $1,018.29 | 1.35% | $6.84 |
| * | “Expenses Paid” for each Fund share class relating to actual or hypothetical returns, other than for Risk Parity, is the amount equal to the product of (a) that Fund’s and Share Class’ average account value for the six-month period ended September 30, 2013, multiplied by (b) the corresponding “Annualized Expense Ratio” multiplied by (c) the fraction 183/365 (which reflects the six-month period covered by this report). “Expenses Paid” for each Risk Parity 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 September 30, 2013, multiplied by (b) the corresponding “Annualized Expense Ratio” multiplied by (c) for Ordinary Shares, the fraction 95/365 (which reflects the 95-day period beginning on the date that both Ordinary and Institutional class shares were first sold and ending on the last day of the period covered by this report). |
PEAR TREE COLUMBIA SMALL CAP FUND
INVESTMENT PROFILE
All Data as of September 30, 2013
Investment Commentary
For the semi-annual period ended September 30, 2013, 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 13.91% at net asset value compared to 13.61% for the Index.
| Fund Information | ||
| Net Assets Under Management | $122.5 Million | |
| Number of Companies | 75 | |
| Price to Book Ratio | 4.0 | |
| Price to Earnings Ratio | 30.7 | |
| Ordinary | Institutional | |
| Total Expense Ratio (Gross)* | 1.80% | 1.55% |
| Total Expense Ratio (Net)* | 1.80% | 1.55% |
| Ticker Symbol | USBNX | QBNAX |
| *per prospectus dated August 1, 2013. See financial highlights for total expense ratios for the six months ended September 30, 2013. | ||
Market Conditions and Investment Strategies
Despite modest economic growth, equity markets in the U.S. are having a very good year, compliments of the Federal Reserve. Low interest rates on savings have been a major catalyst for investors to seek both higher yields and greater risk in the stock market. The past six months have seen solid performance from almost all segments of the market. Returns for small cap stocks have been particularly strong, reflecting robust revenue and earnings growth.
Analyzing the sector returns for the Russell 2000 Index, Telecommunications Services and Consumer Staples topped the list with returns of 23%, closely followed by Health Care and Information Technology, each with gains of 21%. The Consumer Discretionary and Industrials sectors were next posting returns of 18% and 15% respectively. Energy gained 13% for the period while Financials earned a single digit return of 6%. Materials and Utilities were the laggards with returns of less than 1% for the period.
The Fund’s return versus the Index was also quite strong. The Consumer Staples sector was the Fund’s standout performer, adding 3.2% to our relative return, due primarily to one stock, Nu Skin Enterprises Inc. The company, which develops and sells personal care products, saw its stock rise 117% for the period after reporting an excellent quarter and raising guidance. The Fund’s stock selection in the Materials sector also added to our return for the period. Conversely, the Fund’s stock selection in Health Care detracted 1.4% from the Fund’s relative return, in large part due to Bioscrip Inc., which fell 31% during the period, as the pharmacy benefits manager lowered guidance, and announced a secondary offering. As a result, the Fund sold a significant portion of our position. The Fund’s stock selection in Financials and Industrials also detracted from the Fund’s returns versus the benchmark.
Portfolio Changes
The Information Technology, Industrials, Health Care, and Consumer Staples sector weightings increased during the quarter, while the Consumer Discretionary, Financials, Energy, Materials, and Telecommunications Services sectors declined. Changes in all other sectors were not material.
PEAR TREE COLUMBIA SMALL CAP FUND
A Look Ahead
We are pleased with the way the Fund’s existing portfolio of companies has been able to navigate the challenging market environment this year. Despite the fact that many stocks have had significant gains, we continue to find new and exciting investment opportunities. We remain committed to our philosophy of investing in high quality companies with unique positions of market leadership and competitive positions that can be sustained.
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 | 31.2% |
| Nu Skin Enterprises, Inc., Class A | 5.0% |
| Alliance Data Systems Corporation | 3.9% |
| EPR Properties | 3.6% |
| Hersha Hospitality Trust | 3.6% |
| Proto Labs, Inc. | 3.2% |
| Core Laboratories N.V. | 2.7% |
| IMAX Corporation | 2.6% |
| Finisar Corporation | 2.2% |
| Cinemark Holdings, Inc. | 2.2% |
| MedAssets, Inc. | 2.2% |
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% |
| Industirals | 20.9% |
| Information Technology | 17.6% |
| Consumer Discretionary | 16.8% |
| Financials | 16.6% |
| Consumer Staples | 11.5% |
| Health Care | 8.5% |
| Energy | 4.5% |
| Materials | 1.8% |
| Telecommunication Services | 0.7% |
| CASH + other assets (net) | 1.1% |
Value of a $10,000 Investment
Pear Tree Columbia Small Cap (PTSC) Ordinary Shares vs. Russell 2000 Index
PEAR TREE COLUMBIA SMALL CAP FUND
Average Annual Total Returns
| 3Q 2013 | Six Months | One Year | Five Year | Ten Year | Since Inception | Inception Date | |
| Ordinary Shares | 9.76% | 13.91% | 27.07% | 8.98% | 8.01% | 10.51% | 08/03/92 |
Institutional Shares1 | 9.86% | 14.09% | 27.39% | 9.26% | 8.38% | 9.87% | 01/06/93 |
Russell 20002 | 10.21% | 13.61% | 30.06% | 11.15% | 9.64% | 9.88% | _______ |
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 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 QUALITY FUND
INVESTMENT PROFILE
All Data as of September 30, 2013
Investment Commentary
For the semi-annual period ended September 30, 2013, the Pear Tree Quality Fund’s Ordinary Shares (the “Fund”) underperformed its benchmark, S&P 500 Index® (the “Index”)*. The Fund achieved a return of 3.28% at net asset value compared to 8.31% for the Index.
| Fund Information | ||
| Net Assets Under Management | $110.4 Million | |
| Number of Companies | 76 | |
| Price to Book Ratio | 3.3 | |
| Price to Earnings Ratio | 14.3 | |
| Ordinary | Institutional | |
| Total Expense Ratio (Gross)* | 1.62% | 1.35% |
| Total Expense Ratio (Net)** | 1.37% | 1.10% |
| Ticker Symbol | USBOX | QGIAX |
| *per prospectus dated August 1, 2013. See financial highlights for total expense ratios for the six months ended September 30, 2013. | ||
| **Reflects all fee waivers currently in effect. Fee waivers may not be amended, rescinded or terminated before July 31, 2014 without the consent of the Fund’s board. | ||
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, 2013 to September 30, 2013, the Fund’s Ordinary Shares, when compared to the Target Portfolio, had a tracking error of 0.28.
Over the previous six months, the Utilities sector was the largest positive contributor to the Fund’s performance, due to an underweight position. The Fund’s large overweight position in the Healthcare sector and underweight position in the Telecommunication Services sector also contributed to performance.
The greatest detractor to performance came from the Consumer Staples sector where a large overweight position negatively affected relative performance. Stock selection in Consumer Discretionary, Consumer Staples, Health Care and Information Technology also detracted from performance.
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 six month period ending September 30, 2013, the Fund rebalanced the holdings twice to replicate the publicly disclosed holdings of the current target portfolio. The two rebalances resulted in the sale of four positions. Also as a result of the rebalances, the Fund opened new positions in twelve companies; six Health Care companies, four Consumer Staples companies, one Industrials company and one Information Technology company.
A Look Ahead
For the foreseeable future, the Fund’s investment manager expects the Target Portfolio to remain substantially 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 | 43.4% |
| Johnson & Johnson | 5.4% |
| Google, Inc. | 5.1% |
| Microsoft Corporation | 4.8% |
| Oracle Corporation | 4.7% |
| Coca-Cola Company (The) | 4.4% |
| Pfizer Inc. | 4.3% |
| Cisco Systems, Inc. | 3.9% |
| Chevron Corporation | 3.7% |
| Philip Morris International, Inc. | 3.6% |
| Procter & Gamble Company | 3.5% |
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 | 29.8% |
| Health Care | 28.0% |
| Consumer Staples | 27.5% |
| Energy | 7.2% |
| Consumer Discretionary | 4.9% |
| Industrials | 1.3% |
| Telecommunication Services | 0.5% |
| CASH + other assets (net) | 0.8% |
Value of a $10,000 Investment
Pear Tree Quality (PTQ) Ordinary Shares vs. S&P 500 Index
PEAR TREE QUALITY FUND
Average Annual Total Returns
| 3Q 2013 | Six Months | One Year | Five Year | Ten Year | Since Inception | Inception Date | |
| Ordinary Shares | 1.36% | 3.28% | 11.02% | 7.00% | 5.01% | 8.89% | 05/06/85 |
Institutional Shares1 | 1.42% | 3.44% | 11.46% | 7.30% | 5.31% | 7.45% | 03/25/91 |
S&P 5002 | 5.24% | 8.31% | 19.34% | 10.02% | 7.57% | 10.59% | _______ |
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.
* S&P 500 Index is the registered mark of Standard & Poor’s.
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 September 30, 2013
Investment Commentary
For the semi-annual period ended September 30, 2013, the Pear Tree PanAgora Dynamic Emerging Markets Fund’s Ordinary Shares (the “Fund”) underperformed its benchmark, MSCI Emerging Markets Index (the “Index”). The Fund achieved a return of –5.14% at net asset value compared to –2.52% for the Index.
| Fund Information | ||
| Net Assets Under Management | $145.1 Million | |
| Number of Companies | 215 | |
| Price to Book Ratio | 1.4 | |
| Price to Earnings Ratio | 9.6 | |
| Ordinary | Institutional | |
| Total Expense Ratio (Gross)* | 1.92% | 1.65% |
| Total Expense Ratio (Net)* | 1.92% | 1.65% |
| Ticker Symbol | QFFOX | QEMAX |
| *per prospectus dated August 1, 2013. See financial highlights for total expense ratios for the six months ended September 30, 2013. | ||
Market Conditions and Investment Strategies
On a country basis, the largest detractors were India (–1.16%) and South Korea (–0.76%) Among holdings in India the largest detractor was holding Gitanjali Gems Limited while among holdings South Korea the largest detractor not holding Naver Corp. The largest contributors were Mexico (0.64%) and China (0.60%). Among holdings in Mexico, the largest contributor was holding Gruma, S.A.B. de C.V., while among holdings in China, the largest contributor was an overweight to Great Wall Motor Company.
On a sector basis, the largest detractors were Information Technology (–0.67%) and Energy (–0.46%). Among holdings in Information Technology the largest detractor was an underweight to Tencent Holdings Limited, while among holdings in Energy the largest detractor was an overweight to Oil & Natural Gas Corp. The largest contributors were Industrials (0.47%) and Consumer Staples (0.18%). Among the holdings in Industrials the largest contributor was an overweight to Teco Electric & Machine while among holdings in Consumer Staples the largest contributor was an overweight to President Chain Store.
During the semi-annual period that ended September 2013, our proprietary Dynamic Alpha model performed well — our high-ranked alpha stocks outperformed the worst ranked alpha stocks. However, our proprietary short-term and intermediate-term models underperformed, which resulted in poor stock selection detracting from the positive Dynamic Alpha model performance. The Risk Parity approach also detracted from relative performance.
Portfolio Changes
The addition of the Risk Parity strategy was a significant portfolio change during the Semi-Annual period ended September 30, 2013.
A Look Ahead
As a quantitative investment firm, the Fund’s Sub-Adviser tends not to provide strategy-specific forward looking commentary. It believes that its systematic investment approach ensures that it deliver a portfolio of its highest conviction of ideas to all of its clients.
The Fund’s portfolio is managed by Dmitri Kantsyrev Ph.D., CFA and Jane Zhou, Ph.D of PanAgora Asset Management, Inc.
PEAR TREE PANAGORA DYNAMIC EMERGING MARKETS FUND
Top 10 Holdings3
| Percentage of total net assets | 33.2% |
| Pear Tree PanAgora Risk Parity Emerging Markets | 16.6% |
| Samsung Electronics Company, Ltd. | 4.2% |
| China Construction Bank Corporation | 2.1% |
| China Mobile Limited | 1.8% |
| Taiwan Semiconductor Manufacturing Co., Ltd. | 1.7% |
| Bank of China Ltd. H | 1.6% |
| LUKoil | 1.5% |
| CNOOC Limited | 1.3% |
| Sasol Ltd. | 1.2% |
| Hyundai Motor Company Ltd. | 1.2% |
There is no guarantee that such securities will continue to be viewed favorably or held in the Fund’s portfolio.
Sector Allocation3
| Percentage of total net assets | 100.0% |
| Financials | 20.2% |
| Information Technology | 13.7% |
| Energy | 11.0% |
| Consumer Discretionary | 8.3% |
| Consumer Staples | 7.9% |
| Industrials | 6.6% |
| Materials | 6.4% |
| Telecommunication Services | 5.0% |
| Utilities | 1.7% |
| Health Care | 1.4% |
| Mutual Funds | 16.7% |
| CASH + other assets (net) | 1.1% |
Top 10 Country Allocations3
| Percentage of total net assets | 70.0% |
| South Korea | 11.6% |
| Taiwan | 11.6% |
| China | 10.9% |
| Brazil | 9.2% |
| Hong Kong | 6.0% |
| South Africa | 5.4% |
| Malaysia | 4.2% |
| Russia | 4.1% |
| Mexico | 3.8% |
| India | 3.2% |
PEAR TREE PANAGORA DYNAMIC EMERGING MARKETS FUND
Value of a $10,000 Investment
Pear Tree PanAgora Dynamic Emerging Markets (PTEM) Ordinary Shares vs. MSCI EM Index
Average Annual Total Returns
| 3Q 2013 | Six Months | One Year | Five Year | Ten Year | Since Inception | Inception Date | |
| Ordinary Shares | 4.24% | –5.14% | 0.79% | 5.41% | 12.57% | 6.02% | 09/30/94 |
Institutional Shares1 | 4.28% | –5.03% | 1.03% | 5.67% | 12.91% | 7.78% | 04/02/96 |
MSCI EM2 | 5.90% | –2.52% | 1.33% | 7.56% | 13.16% | 5.47% | _______ |
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.
3 “Top 10 Holdings”, “Sector Allocation”, and “Top 10 Country Allocation” reflect the direct and indirect (through the Fund’s investment in Pear Tree PanAgora Risk Parity Emerging Markets Fund) securities holdings.
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 PANAGORA RISK PARITY EMERGING MARKETS FUND
INVESTMENT PROFILE
All Data as of September 30, 2013
Investment Commentary
For the period June 27, 2013 (inception date) through September 30, 2013, the Pear Tree PanAgora Risk Parity Emerging Markets Fund’s Ordinary Shares (the “Fund”) underperformed its benchmark, MSCI Emerging Markets Index (the “Index”). The Fund achieved a return of 3.30% compared to 8.32% for the Index.
| Fund Information | ||
| Net Assets Under Management | $24.3 Million | |
| Number of Companies | 488 | |
| Price to Book Ratio | 1.8 | |
| Price to Earnings Ratio | 15.0 | |
| Ordinary | Institutional | |
| Total Expense Ratio (Gross)* | 1.37% | 1.12% |
| Total Expense Ratio (Net)* | 1.37% | 1.12% |
| Ticker Symbol | RPEMX | EMPRX |
| *2013 Initial Prospectus estimated expense ratio. See financial highlights for total expense ratios for the six months ended September 30, 2013. | ||
Market Conditions and Investment Strategies
PanAgora’s proprietary Risk Parity portfolio construction approach is centered on the belief that diversification is the key to generating better risk-adjusted returns and that avoiding risk concentration is the best way to achieve true portfolio diversification. The Risk Parity Emerging Markets Equity strategy therefore seeks to achieve true diversification by balancing risk exposures at many levels. In an effort to mitigate risk concentration, Risk Parity is applied within countries to simultaneously balance risk across sector and stock exposures, and is then applied across countries so that each country contributes equally to risk at the aggregate portfolio level. The expected result is a more diversified, risk balanced emerging markets equity portfolio that has lower volatility and more downside protection than a more concentrated approach, such as those based on capitalization weighted indices, without sacrificing return potential.
On a country basis, the best performing countries were Poland (21.8%) and South Korea (17.4%), while the worst performing countries were Indonesia (–20.6), Turkey (–5.9%) and Chile (–4.1%). On a sector basis, the best performing sectors were Energy (12.7%) and Consumer Discretionary (11.8%) while the worst performing sector was Consumer Staples (2.3%). At the country level, the top contributors to performance on an absolute basis were holdings in South Korea (118 bps) and China (87 bps). Positions held in Indonesia (–128 bps) and India (–21 bps) detracted. Sectors that contributed to absolute portfolio performance included Information Materials (86 bps) and Technology (66 bps). Consumer Staples (–4 bps) detracted.
A Look Ahead
As a quantitative investment firm, the Fund’s Sub-Adviser tends not to provide strategy-specific forward looking commentary. It believes that its systematic investment approach ensures that it delivers a portfolio of its highest conviction of ideas to all of its clients.
The Fund’s portfolio is managed by Edward Qian, Ph.D., CFA and Mark Barnes of PanAgora Asset Management, Inc.
PEAR TREE PANAGORA RISK PARITY EMERGING MARKETS FUND
Top 10 Holdings
| Percentage of total net assets | 16.4% |
| iPath MSCI India Index ETN | 4.8% |
| Vanguard FTSE Emerging Markets Index Fund | 3.9% |
| iShares MSCI Emerging Markets Index Fund | 3.1% |
| Maroc Telecome S.A. | 0.9% |
| Attijariwafa Bank | 0.7% |
| Jollibee Foods Corporation | 0.7% |
| Chunghwa Telecome Co., Ltd. | 0.7% |
| Douja Prom Addoha | 0.6% |
| Almacees Exito S.A. | 0.5% |
| Glow Energy PCL | 0.5% |
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 | 15.9% |
| Telecommunication Services | 12.9% |
| Consumer Staples | 10.7% |
| Materials | 9.4% |
| Consumer Discretionary | 8.8% |
| Industrials | 8.0% |
| Energy | 8.0% |
| Utilities | 7.2% |
| Health Care | 4.7% |
| Information Technology | 2.3% |
| Exchange Traded Funds | 7.0% |
| Exchange Traded Notes | 4.8% |
| Cash and Other Assets (Net) | 0.3% |
Top 10 Country Allocations
| Percentage of total net assets | 63.0% |
| Malaysia | 10.0% |
| Thailand | 7.3% |
| Taiwan | 7.0% |
| South Africa | 6.5% |
| Mexico | 6.0% |
| Indonesia | 5.4% |
| Brazil | 5.3% |
| South Korea | 5.3% |
| Philippines | 5.2% |
| Turkey | 5.0% |
PEAR TREE PANAGORA RISK PARITY EMERGING MARKETS FUND
Value of a $10,000 Investment
Pear Tree PanAgora Risk Parity Emerging Markets (PTRP) Ordinary Shares vs. MSCI EM Index
Average Annual Total Returns
| 3Q 2013 | Six Months | One Year | Five Year | Ten Year | Since Inception | Inception Date | |
| Ordinary Shares | 1.27% | 3.30% | 6/27/2013 | ||||
Institutional Shares1 | 1.27% | 3.30% | 6/27/2013 | ||||
MSCI EM2 | 5.90% | 8.32% | ________ |
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 06/27/2013.
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 September 30, 2013
Investment Commentary
For the semi-annual period ended September 30, 2013, 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 8.28% at net asset value compared to 10.79% for the Index.
| Fund Information | ||
| Net Assets Under Management | $1,095.7 Million | |
| Number of Companies | 46 | |
| Price to Book Ratio | 2.1 | |
| Price to Earnings Ratio | 14.4 | |
| Ordinary | Institutional | |
| Total Expense Ratio (Gross)* | 1.59% | 1.33% |
| Total Expense Ratio (Net)* | 1.59% | 1.33% |
| Ticker Symbol | QFVOX | QFVIX |
| *per prospectus dated August 1, 2013. See financial highlights for total expense ratios for the six months ended September 30, 2013. | ||
Market Conditions and Investment Strategies
Global market volatility persisted with two of the past six months in negative territory, per the MSCI EAFE Index. Staying true to the Sub-Adviser’s value discipline, The Fund invested cash inflows during the declines, when fundamentally sound companies appeared undervalued.
Consumer Discretionary holdings boosted Fund performance, led by Italian lottery operator GTECH as well as U.K. homebuilders. GTECH noted strong quarterly results, highlighting revenue growth in the U.S. lottery business. In the Telecommunications sector, Deutsche Telekom and KDDI Corporation posted double digit returns for the period. Deutsche announced strong earnings, going on the offensive in the U.S. market through its T-Mobile USA subsidiary, with competitive rates, a LTE network and an iPhone offering. Irish food producer Greencore Group was the best performing holding within the Consumer Staples sector. The company reported healthy revenues and growth in the food-to-go business at Starbucks and 7-11 in the U.S. Positive analyst reports further advanced the stock, which gained inclusion in the FTSE 250.
Methanex, the world’s largest methanol producer, reached a record high during the period on strong methanol demand not only for paints and plastics but also for fuel additives and adhesives. Among other Materials companies, BASF posted solid earnings after further restructuring to improve profitability amidst weak volumes. Fragrance and flavorings company Symrise benefitted from lessening cost pressures from its menthol start-up, a diverse customer base and exposure to growing emerging countries.
The primary reason for underperformance was due to an underweight position in Financials. Defensive sectors, namely Energy and Utilities, also detracted from better performance. Refiner Thai Oil declined on volatile oil prices and a weaker Thai Baht. French oil and gas explorer Maurel et Prom was down on speculation regarding tax litigation in Gabon. Additionally, Japanese Materials company Showa Denko was negatively impacted by slower petrochemical and chemical sales.
Portfolio Changes
During the six-month period, no positions were liquidated. An influx of investor cash was used to purchase one new holding, Ipsos SA of France. A Consumer Discretionary company, Ipsos conducts market research for global consumer product companies. Additional cash was put to work within existing portfolio holdings.
PEAR TREE POLARIS FOREIGN VALUE FUND
A Look Ahead
Macro-economic conditions worldwide appear to be slightly improving, with marginal growth evident in China, Europe and the U.S. However, there are any number of mitigating factors, including the U.S. government fiscal deliberations, currency concerns in emerging markets and China’s potential liquidity crisis. We continue to diversify the portfolio, focusing on holdings that can weather volatility and grow in moderate economic conditions.
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 | 25.5% |
| Deutsche Telekom AG | 2.8% |
| Samsung Electronics Company, Ltd. | 2.7% |
| Taylor Wimpey plc | 2.7% |
| Wincor Nixdorf AG | 2.6% |
| KDDI Corporation | 2.5% |
| Methanex Corporation | 2.5% |
| BHP Billiton plc | 2.5% |
| Barratt Developments plc | 2.4% |
| Showa Denko K.K. | 2.4% |
| Standard Chartered plc | 2.4% |
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 | 20.4% |
| Consumer Discretionary | 16.2% |
| Financials | 13.2% |
| Industrials | 9.7% |
| Telecommunication Services | 7.6% |
| Information Technology | 7.5% |
| Consumer Staples | 6.7% |
| Energy | 6.2% |
| Health Care | 4.6% |
| Utilities | 1.6% |
| Cash and Other Assets (Net) | 6.3% |
Top 10 Country Allocations
| Percentage of total net assets | 74.2% |
| Germany | 16.2% |
| United Kingdom | 15.3% |
| Japan | 9.4% |
| France | 7.3% |
| Sweden | 6.3% |
| Finland | 6.0% |
| Ireland | 4.4% |
| Italy | 4.1% |
| South Korea | 2.7% |
| Canada | 2.5% |
PEAR TREE POLARIS FOREIGN VALUE FUND
Value of a $10,000 Investment
Pear Tree Polaris Foreign Value (PTFV) Ordinary Shares vs. MSCI EAFE Index
Average Annual Total Returns
| 3Q 2013 | Six Months | One Year | Five Year | Ten Year | Since Inception | Inception Date | |
| Ordinary Shares | 8.89% | 8.28% | 21.92% | 11.53% | 9.42% | 6.88% | 05/15/98 |
Institutional Shares1 | 8.96% | 8.34% | 22.17% | 11.75% | 9.67% | 8.64% | 12/18/98 |
MSCI EAFE2 | 11.61% | 10.79% | 24.29% | 6.85% | 8.50% | 4.77% | _______ |
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 September 30, 2013
Investment Commentary
For the semi-annual period ended September 30, 2013, the Pear Tree Polaris Foreign Value Small Cap Fund’s Ordinary Shares (the “Fund”) underperformed its benchmark, the S&P EPAC Small Cap Index1 (the “Index”). The Fund achieved a return of 5.33% at net asset value compared to 12.67% for the Index.
| Fund Information | ||
| Net Assets Under Management | $121.8 Million | |
| Number of Companies | 60 | |
| Price to Book Ratio | 2.3 | |
| Price to Earnings Ratio | 15.7 | |
| Ordinary | Institutional | |
| Total Expense Ratio (Gross)* | 1.66% | 1.41% |
| Total Expense Ratio (Net)* | 1.66% | 1.41% |
| Ticker Symbol | QUSOX | QUSIX |
| *per prospectus dated August 1, 2013. See financial highlights for total expense ratios for the six months ended September 30, 2013. | ||
Market Conditions and Investment Strategies
Although the Fund was in positive absolute territory, it underperformed versus the benchmark due to declines in emerging markets, which comprise approximately 20% of the portfolio.
Among industrials, U.K. shipping service provider Clarkson PLC was up after announcing increased market share on the back of a diverse product mix and geographic reach. In the Consumer Discretionary sector, Wetherspoon’s stock price rose on healthy pub sales. Halfords Group reported strong revenues, with increased bicycle and car part sales. By contrast, Samson Holding declined on slow furniture sales. In Healthcare, Japanese laboratory testing services company BML was up on higher clinical testing sales and volumes. UDG Healthcare (rebranded from United Drug) delivered with positive earnings, business growth and successful acquisition integrations.
Irish food producer Greencore Group was the best performing stock within the Consumer Staples sector. The company announced strong earnings and growth in the food-to-go business at Starbucks and 7-11 in the U.S. Positive analyst reports further advanced the stock, which gained inclusion in the FTSE 250.
South Indian Bank declined due to lower net interest margins and asset quality concerns. LIC Housing Finance dropped in line with the Indian stock market, which was negatively impacted by weak GDP, currency volatility and U.S. Fed actions. Utility companies also detracted from performance. Manila Water’s efforts to increase water tariffs were rejected by regulators. Instead, regulators sought to restrict tariffs, causing Manila to file for arbitration.
Portfolio Changes
During the six-month period, the Fund sold positions in Sichuan Expressway and Manappuram General Finance due to corporate governance concerns. Cash was redeployed to five new positions, including France-based Ipsos, a market research firm for global consumer products; Indian IT company Hexaware Technologies; truck electricals company PKC Group; Shanghai Mechanical, a joint venture with Mitsubishi for elevator installations; and Semperit AG, an Austrian company that manufactures rubber and plastic products for the medical and industrial sectors.
PEAR TREE POLARIS FOREIGN VALUE SMALL CAP FUND
A Look Ahead
Macro-economic conditions worldwide appear to be slightly improving, with marginal growth evident in China, Europe and the U.S. However, there are any number of mitigating factors, including the U.S. government fiscal deliberations, currency concerns in emerging markets and China’s potential liquidity crisis. We continue to diversify the portfolio, focusing on Fund holdings that can weather volatility and grow admirably in positive markets. As value opportunities continue to appear in the Sub-Adviser’s research, the Fund’s Sub-Adviser will be adding new buys to the Fund portfolio in the coming quarters.
1 As of August 1, 2013, The Fund replaced its benchmark with the MSCI ACWI (ex USA small cap) because it believes the new index represents the emerging market exposure in the Fund better that the S&P EPAC Index.
The Fund’s lead portfolio manager is Bernard R. Horn, Jr., of Polaris Capital Management, LLC
PEAR TREE POLARIS FOREIGN VALUE SMALL CAP FUND
Top 10 Holdings
| Percentage of total net assets | 24.9% |
| UDG Healthcare plc | 3.0% |
| Greencore Group plc | 2.8% |
| Galliford Try plc | 2.7% |
| BML, Inc. | 2.6% |
| Freenet AG | 2.5% |
| Daicel Corporation | 2.3% |
| Equatorial Energia S.A. | 2.3% |
| Chugoku Marine Paints Ltd. | 2.3% |
| Manila Water Company, Inc. | 2.2% |
| Alternative Networks plc | 2.2% |
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% |
| Consumer Discretionary | 21.6% |
| Industrials | 15.5% |
| Information Technology | 10.4% |
| Financials | 9.8% |
| Consumer Staples | 9.7% |
| Telecommunication Services | 8.3% |
| Health Care | 7.4% |
| Materials | 6.7% |
| Utilities | 6.1% |
| Cash and Other Assets (Net) | 4.5% |
Top 10 Country Allocations
| Percentage of total net assets | 72.7% |
| United Kingdom | 15.9% |
| Japan | 10.4% |
| Ireland | 9.1% |
| India | 6.7% |
| Germany | 6.7% |
| Norway | 6.2% |
| Hong Kong | 5.3% |
| Sweden | 4.6% |
| Thailand | 4.0% |
| Singapore | 3.8% |
PEAR TREE POLARIS FOREIGN VALUE SMALL CAP FUND
Value of a $10,000 Investment
Pear Tree Polaris Foreign Value Small Cap (PTFVSC) Ordinary Shares vs. MSCI ACWI ex USA Small Cap Index
Average Annual Total Returns
| 3Q 2013 | Six Months | One Year | Five Year | Ten Year | Since Inception | Inception Date | |
| Ordinary Shares | 7.38% | 5.33% | 21.82% | 12.66% | 5.70% | 5/1/2008 | |
Institutional Shares1 | 7.46% | 5.52% | 22.15% | 12.94% | 5.94% | 5/1/2008 | |
MSCI ACWI ex USA Small Cap2 | 12.46% | 7.66% | 20.45% | 11.76% | 3.65% | _______ | |
S&P/EPAC Small Cap3 | 14.96% | 12.67% | 28.50% | 10.32% | 3.21% | _______ |
1 Institutional Shares may only be purchased by certain categories of investors and are not subject to sales charges or distribution fees.
2 The MSCI ACWI ex USA Small Cap Index captures small cap representation across 23 developed markets and 21 emerging market countries
3 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 beginning date for the Index is 5/1/2008.
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
September 30, 2013 (Unaudited)
Common Stock—98.9%
| Shares | Value | |
| AIRLINES—0.6% | ||
| Spirit Airlines, Inc. (a) | 21,806 | $747,292 |
| BANKS—3.8% | ||
| CoBiz Financial, Inc. | 120,589 | 1,164,890 |
| F.N.B. Corporation | 164,639 | 1,997,071 |
| Pinnacle Financial Partners, Inc. | 32,580 | 971,210 |
| United Bankshares, Inc. (b) | 17,132 | 496,485 |
| 4,629,656 | ||
| BEVERAGES—1.8% | ||
| SodaStream International Ltd. (a)(b) | 34,664 | 2,162,687 |
| BUILDING PRODUCTS—3.8% | ||
| Builders FirstSource, Inc. (a) | 204,308 | 1,201,331 |
| Drew Industries, Inc. | 27,885 | 1,269,883 |
| NCI Building Systems, Inc. (a) | 70,343 | 896,170 |
| Trex Company, Inc. (a) | 26,359 | 1,305,561 |
| 4,672,945 | ||
| CHEMICALS—1.7% | ||
| Ferro Corporation (a) | 235,494 | 2,145,350 |
| COMMERCIAL SERVICES & SUPPLIES—11.6% | ||
| Acacia Research Corporation—Acacia Technologies | 110,346 | 2,544,579 |
| Beacon Roofing Supply, Inc. (a) | 27,727 | 1,022,295 |
| Cardtronics, Inc. (a) | 41,678 | 1,546,254 |
| Euronet Worldwide, Inc. (a) | 28,153 | 1,120,489 |
| Heartland Payment Systems, Inc. | 43,359 | 1,722,219 |
| Kforce, Inc. (a) | 139,418 | 2,466,304 |
| WageWorks, Inc. (a) | 39,093 | 1,972,242 |
| Waste Connections, Inc. | 40,064 | 1,819,306 |
| 14,213,688 | ||
| COMMUNICATIONS EQUIPMENT—2.1% | ||
| NICE-Systems Ltd. (c) | 42,917 | 1,775,476 |
| Ubiquiti Networks, Inc. | 22,125 | 743,179 |
| 2,518,655 | ||
| CONSTRUCTION & ENGINEERING—2.0% | ||
| MasTec, Inc. (a) | 79,615 | 2,412,335 |
| DIVERSIFIED FINANCIALS—2.7% | ||
| Hercules Technology Growth Capital, Inc. | 77,346 | 1,179,527 |
| ICG Group, Inc. (a) | 147,191 | 2,088,640 |
| 3,268,167 | ||
| DIVERSIFIED TELECOMMUNICATIONS—0.7% | ||
| Allot Communications Ltd. (a) | 67,822 | 856,592 |
| ELECTRONIC EQUIPMENT & INSTRUMENTS—3.5% | ||
| Applied Optoelectronics, Inc. (a) | 9,385 | 93,850 |
| Finisar Corporation (a) | 121,339 | 2,745,902 |
| OSI Systems, Inc. (a) | 19,240 | 1,432,803 |
| 4,272,555 | ||
| ENERGY EQUIPMENT & SERVICES—4.5% | ||
| Core Laboratories N.V. | 19,488 | 3,297,564 |
| Hornbeck Offshore Services, Inc. (a) | 39,488 | 2,268,191 |
| 5,565,755 | ||
| FOOD & DRUG RETAILING—1.0% | ||
| United Natural Foods, Inc. (a) | 18,422 | 1,238,327 |
| FOOD PRODUCTS—2.7% | ||
| Boulder Brands, Inc. (a) | 121,443 | 1,947,946 |
| Hain Celestial Group, Inc. (a) | 17,984 | 1,386,926 |
| 3,334,872 | ||
| HEALTH CARE EQUIPMENT & SUPPLIES—4.0% | ||
| Accuray Incorporated (a)(b) | 114,758 | 848,061 |
| BioTelemetry, Inc. (a) | 176,479 | 1,748,907 |
| Natus Medical, Inc. (a) | 95,344 | 1,351,978 |
| Spectranetics Corporation (The) (a) | 58,037 | 973,861 |
| 4,922,807 | ||
| HEALTH CARE PROVIDERS & SERVICES—4.5% | ||
| Bio-Reference Laboratories, Inc. (a)(b) | 20,298 | 606,504 |
| BioScrip, Inc. (a) | 11,767 | 103,314 |
| Catamaran Corporation (a) | 30,908 | 1,420,223 |
| Healthways, Inc. (a) | 69,409 | 1,284,760 |
| Henry Schein, Inc. (a) | 19,794 | 2,052,638 |
| 5,467,439 | ||
| HOTELS, RESTAURANTS & LEISURE—1.1% | ||
| National CineMedia, Inc. | 70,159 | 1,323,199 |
| HOUSEHOLD DURABLES—0.4% | ||
| Standard Pacific Corporation (a) | 61,043 | 482,850 |
| INTERNET SOFTWARE & SERVICES—0.4% | ||
| eGain Corporation (a) | 34,341 | 518,206 |
| IT CONSULTING & SERVICES—5.0% | ||
| Alliance Data Systems Corporation (a) | 22,588 | 4,776,684 |
| EPAM Systems, Inc. (a) | 30,834 | 1,063,773 |
| InterNAP Network Services Corporation (a) | 41,187 | 286,250 |
| 6,126,707 | ||
| MACHINERY—3.8% | ||
| Actuant Corporation, Class A | 19,921 | 773,732 |
| Proto Labs, Inc. (a) | 50,622 | 3,867,014 |
| 4,640,746 | ||
| MEDIA—9.2% | ||
| Cinemark Holdings, Inc. | 84,795 | 2,691,393 |
| Gray Television, Inc. (a) | 190,012 | 1,491,594 |
| IMAX Corporation (a) | 106,181 | 3,210,913 |
| Nexstar Broadcasting Group, Inc. | 29,811 | 1,326,739 |
| Regal Entertainment Group, Class A (b) | 136,865 | 2,597,698 |
| 11,318,337 | ||
| PERSONAL PRODUCTS—6.0% | ||
| Elizabeth Arden, Inc. (a) | 34,795 | 1,284,631 |
| Nu Skin Enterprises, Inc., Class A | 63,885 | 6,116,350 |
| 7,400,981 | ||
| REAL ESTATE—10.2% | ||
| American Campus Communities, Inc. | 31,679 | 1,081,838 |
| Brandywine Realty Trust | 99,984 | 1,317,789 |
| Campus Crest Communities, Inc. | 42,482 | 458,806 |
| EPR Properties | 91,744 | 4,471,603 |
| Hersha Hospitality Trust | 786,177 | 4,394,729 |
| Physicians Realty Trust | 42,296 | 512,627 |
| Terreno Realty Corporation | 14,145 | 251,215 |
| 12,488,607 | ||
| SEMICONDUCTOR EQUIPMENT & PRODUCTS—1.0% | ||
| 8x8, Inc. (a) | 125,751 | 1,266,313 |
| SOFTWARE—4.7% | ||
| Control4 Corporation (a) | 49,177 | 851,746 |
| inContact, Inc. (a) | 82,803 | 684,781 |
| MedAssets, Inc. (a) | 105,068 | 2,670,828 |
| Rally Software Development Corp. (a) | 34,084 | 1,021,157 |
| Verint Systems, Inc. (a) | 12,968 | 480,594 |
| 5,709,106 | ||
| SPECIALTY RETAIL—5.2% | ||
| Asbury Automotive Group, Inc. (a) | 34,520 | 1,836,464 |
| Fifth & Pacific Companies, Inc. (a) | 74,202 | 1,864,696 |
| Pier 1 Imports, Inc. | 82,899 | 1,618,188 |
| Restoration Hardware Holdings, Inc. (a) | 16,725 | 1,059,529 |
| 6,378,877 | ||
| TEXTILES & APPAREL—0.9% | ||
| Vera Bradley, Inc. (a)(b) | 54,638 | 1,123,357 |
| TOTAL COMMON STOCK | ||
| (Cost $85,584,681) | 121,206,408 |
| Short Term Investments—1.7% | ||
| Par Value | Value | |
State Street Bank & Trust Co., Repurchase Agreement 0.0%, 10/01/13, (Dated 09/30/13), Collateralized by $2,130,000 par U.S. Treasury Note-.25% due 03/31/2014, Market Value $2,131,912.74, Repurchase Proceeds $2,087,920 (Cost $2,087,920) | $2,087,920 | 2,087,920 |
| TOTAL INVESTMENTS (EXCLUDING INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED)—100.6% | ||
| (Cost $87,672,601) | 123,294,328 | |
| INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED—5.9% | ||
| Money Market—5.9% | ||
Western Asset Institutional Cash Reserves—Inst. (Cost $7,215,449) | 7,215,449 | 7,215,449 |
TOTAL INVESTMENTS—106.5% (Cost $94,888,050) | 130,509,777 | |
| OTHER ASSETS & LIABILITIES (NET)—(6.5%) | (7,965,818) | |
| NET ASSETS—100% | $122,543,959 |
| (a) | Non-income producing security |
| (b) | All or a portion of this security was out on loan. |
| (c) | ADR—American Depositary Receipts |
| 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 QUALITY FUND
SCHEDULE OF INVESTMENTS
September 30, 2013 (Unaudited)
Common Stock—99.2%
| Shares | Value | |
| BEVERAGES—4.8% | ||
| Anheuser-Busch InBev SA (c) | 4,510 | $ 447,392 |
| Coca-Cola Company (The) | 127,218 | 4,819,018 |
| 5,266,410 | ||
| COMMUNICAITONS EQUIPMENT—0.8% | ||
| QUALCOMM Incorporated | 13,461 | 906,733 |
| COMPUTERS & PERIPHERALS—7.7% | ||
| Apple, Inc. | 4,718 | 2,249,306 |
| EMC Corporation | 15,501 | 396,206 |
| Hewlett-Packard Company | 114,711 | 2,406,637 |
| International Business Machines | 18,563 | 3,437,496 |
| 8,489,645 | ||
| CONSUMER SERVICES—0.1% | ||
| McKesson Corporation | 1,182 | 151,651 |
| FOOD PRODUCTS—2.3% | ||
| Nestle, S.A. (c) | 18,982 | 1,321,147 |
| Unilever N.V. | 33,341 | 1,257,623 |
| 2,578,770 | ||
| FOOD STAPLES & DRUG RETAILING—7.9% | ||
| Costco Wholesale Corporation | 3,353 | 385,997 |
| CVS Caremark Corporation | 6,093 | 345,778 |
| General Mills, Inc. | 3,225 | 154,542 |
| PepsiCo, Inc. | 41,710 | 3,315,945 |
| SYSCO Corporation | 13,553 | 431,392 |
| Tesco PLC (a)(c) | 30,314 | 532,314 |
| Walgreen Co. | 5,297 | 284,978 |
| Wal-Mart Stores, Inc. | 44,752 | 3,309,858 |
| 8,760,804 | ||
| HEALTH CARE EQUIPMENT & SERVICES—6.7% | ||
| Baxter International, Inc. | 3,561 | 233,922 |
| Becton, Dickinson and Company | 2,740 | 274,055 |
| Express Scripts, Inc. (a) | 54,611 | 3,373,868 |
| Medtronic, Inc. | 25,829 | 1,375,394 |
| Stryker Corporation | 2,609 | 176,342 |
| UnitedHealth Group, Inc. | 13,474 | 964,873 |
| Zimmer Holdings, Inc. (a) | 11,662 | 957,917 |
| 7,356,371 | ||
| HEALTH CARE PROVIDERS & SERVICES—1.0% | ||
| Cardinal Health, Inc. | 2,067 | 107,794 |
| Laboratory Corporation of America Holdings (a) | 6,601 | 654,423 |
| Quest Diagnostics Incorporated | 6,449 | 398,484 |
| 1,160,701 | ||
| HOTELS, RESTAURANTS & LEISURE—2.1% | ||
| McDonald’s Corporation | 22,560 | 2,170,498 |
| YUM! Brands, Inc. | 1,811 | 129,287 |
| 2,299,785 | ||
| HOUSEHOLD PRODUCTS—6.1% | ||
| Church & Dwight Co., Inc. | 3,872 | 232,514 |
| Colgate-Palmolive Company | 38,236 | 2,267,395 |
| Kimberly-Clark Corporation | 2,416 | 227,635 |
| Procter & Gamble Company | 50,806 | 3,840,425 |
| Reckitt Benckiser Group plc (a) | 1,801 | 131,203 |
| 6,699,172 | ||
| INDUSTRIAL CONGLOMERATES—1.3% | ||
| 3M Company | 12,028 | 1,436,263 |
| IT Consulting and Services—0.0% | ||
| Paychex, Inc. | 494 | 20,076 |
| MULTILINE RETAIL—1.7% | ||
| Target Corporation | 28,819 | 1,843,840 |
| OIL & GAS—7.2% | ||
| BP plc (c) | 16,326 | 686,182 |
| Chevron Corporation | 34,030 | 4,134,645 |
| Exxon Mobil Corporation | 16,401 | 1,411,142 |
| Royal Dutch Shell plc (c) | 13,866 | 910,719 |
| TOTAL S.A. (c) | 14,076 | 815,282 |
| 7,957,970 | ||
| PHARMACEUTICALS & BIOTECHNOLOGY—20.3% | ||
| Abbott Laboratories | 47,376 | 1,572,410 |
| Allergan, Inc. | 1,028 | 92,983 |
| AmerisourceBergen Corporation | 1,829 | 111,752 |
| Amgen, Inc. | 5,465 | 611,752 |
| AstraZeneca PLC (c) | 14,006 | 727,332 |
| Bristol-Myers Squibb Company | 18,056 | 835,632 |
| Eli Lilly and Company | 11,564 | 582,016 |
| Gilead Sciences, Inc. (a) | 6,776 | 425,804 |
| GlaxoSmithKline plc (c) | 31,034 | 1,556,976 |
| Johnson & Johnson | 68,490 | 5,937,398 |
| Merck & Co., Inc. | 22,636 | 1,077,700 |
| Novartis AG (c) | 17,009 | 1,304,760 |
| Novo Nordisk A/S (c) | 1,259 | 213,048 |
| Pfizer, Inc. | 164,102 | 4,711,369 |
| Roche Holding Ltd. (c) | 20,404 | 1,377,882 |
| Sanofi-Aventis (c) | 20,557 | 1,040,801 |
| Takeda Pharmaceutical Company Limited (a)(c) | 8,036 | 190,613.92 |
| 22,370,227 | ||
| RETAILING—0.2% | ||
| TJX Companies, Inc. (The) | 3,659 | 206,331 |
| SOFTWARE & SERVICES—21.3% | ||
| Cisco Systems, Inc. | 182,158 | 4,266,140 |
| Google, Inc. (a) | 6,388 | 5,595,313 |
| Intuit Inc. | 1,423 | 94,359 |
| MasterCard Incorporated | 1,985 | 1,335,468 |
| Microsoft Corporation | 159,745 | 5,321,106 |
| Oracle Corporation | 156,153 | 5,179,595 |
| SAP AG (b)(c) | 8,155 | 602,818 |
| Visa, Inc. | 4,925 | 941,167 |
| Yahoo! Inc. (a) | 3,821 | 126,704 |
| 23,462,670 | ||
| TEXTILES & APPAREL—0.8% | ||
| Nike, Inc. | 12,962 | 941,560 |
| TOBACCO—6.4% | ||
| British American Tobacco p.l.c. (c) | 11,035 | 1,160,330 |
| Japan Tobacco Inc. (a) | 20,000 | 712,600 |
| Lorillard, Inc. | 28,211 | 1,263,289 |
| Philip Morris International, Inc. | 45,616 | 3,949,889 |
| 7,086,108 | ||
| WIRELESS TELECOMMUNICATIONS—0.5% | ||
| NTT DOCOMO, Inc. (a)(b)(c) | 34,953 | 566,938 |
| TOTAL COMMON STOCK | 109,562,025 | |
| (Cost $94,518,531) |
Short Term Investments—0.7%
| Par Value | Value | |
State Street Bank & Trust Co., Repurchase Agreement .0%, 10/01/13, (Dated 09/30/13), Collateralized by $745,000 par U.S. Treasury Note-.25% due 03/31/2014, Market Value $745,669.01, Repurchase Proceeds $726,159 (Cost $726,159) | $726,159 | $726,159 |
| TOTAL INVESTMENTS (EXCLUDING INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED)—99.9% | ||
| (Cost $95,244,690) | 110,288,184 | |
| INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED—0.9% | ||
| Money Market—0.9% | ||
Western Asset Institutional Cash Reserves—Inst. (Cost $1,060,214) | 1,060,214 | 1,060,214 |
TOTAL INVESTMENTS 100.8% (Cost $96,304,904) | 111,348,398 | |
| OTHER ASSETS & LIABILITIES (NET)—(0.8%) | (934,274) | |
| NET ASSETS—100% | $110,414,124 |
| (a) | Non-Income producing security |
| (b) | All or a portion of this security is out on loan |
| (c) | ADR—American Depositary Receipts |
| 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
September 30, 2013 (Unaudited)
Common Stock—79.7%
| Shares | Value | |
| BRAZIL—6.7% | ||
| Banco do Brasil S.A. | 120,612 | $1,403,823 |
| BM&F Bovespa S.A. | 116,124 | 647,297 |
| Companhia de Bebidas das Americas (c) | 34,945 | 1,340,141 |
| Cyrela Brazil Realty Empreendimentos e Participacoes S.A. | 91,900 | 693,093 |
| Embraer S.A. (c) | 6,582 | 213,717 |
| Even Construtora e Incorporadora S.A. | 119,600 | 454,501 |
| EZ Tec Empreendimentos e Participacoes S.A. | 44,835 | 613,896 |
| JBS S.A. | 238,500 | 832,245 |
| Minerva S.A. (a) | 33,400 | 151,890 |
| Petroleo Brasileiro S.A. | 75,583 | 577,180 |
| Petroleo Brasileiro S.A. (c) | 71,506 | 1,196,295 |
| Sao Martinho S.A. | 15,318 | 200,015 |
| Sul America S.A. | 83,818 | 602,703 |
| Vale S.A. | 48,853 | 757,998 |
| 9,684,794 | ||
| CHILE���0.1% | ||
| Banco Santander Chile (c) | 8,378 | 220,257 |
| CHINA—10.9% | ||
| Bank of China Ltd., H | 5,236,392 | 2,383,462 |
| China Construction Bank Corporation | 3,993,422 | 3,079,270 |
| China Petroleum & Chemical Corporation | 2,221,810 | 1,738,990 |
| China Shenhua Energy Co., Ltd. | 176,605 | 538,562 |
| China Yuchai International Ltd. | 15,241 | 362,279 |
| Dongfeng Motor Group Company Limited | 208,881 | 318,360 |
| Giant Interactive Group, Inc. (c) | 49,305 | 449,662 |
| Great Wall Motor Co., Ltd. | 320,676 | 1,736,669 |
| Guangzhou R&F Properties Co., Ltd. H | 79,200 | 123,978 |
| Industrial & Commercial Bank of China Ltd. | 1,784,911 | 1,245,132 |
| Kingsoft Corporation Ltd. | 248,000 | 588,398 |
| Mindray Medical International Ltd. (b)(c) | 15,997 | 622,123 |
| PetroChina Company Limited | 1,017,778 | 1,120,759 |
| Sino Biopharmaceutical Limited | 612,000 | 415,875 |
| Sinofert Holdings Ltd. | 912,000 | 151,700 |
| Tencent Holdings Limited | 10,800 | 566,508 |
| Tong Ren Tang Technologies Co., Ltd. H | 47,000 | 150,903 |
| Zhejiang Expressway Co., Ltd. | 220,000 | 203,396 |
| 15,796,026 | ||
| COLOMBIA—0.5% | ||
| Ecopetrol S.A. (b)(c) | 14,905 | 685,630 |
| CZECH REPUBLIC—0.2% | ||
| CEZ A.S. (b) | 10,780 | 278,958 |
| HONG KONG—6.0% | ||
| Central China Real Estate Ltd. | 252,371 | 80,704 |
| Champion Real Estate Investment Trust | 504,000 | 231,357 |
| China Mobile Limited | 234,779 | 2,626,214 |
| Chongqing Rural Commercial Bank Co. | 877,687 | 423,265 |
| CNOOC Limited | 955,218 | 1,943,618 |
| COSCO International Holdings Ltd. | 173,193 | 71,463 |
| Dairy Farm International Holdings Limited | 9,000 | 90,990 |
| Dongyue Group Ltd. (b) | 410,000 | 199,837 |
| Giordano International Limited | 340,000 | 310,833 |
| KWG Property Holding Limited | 335,419 | 213,224 |
| Lenovo Group Limited | 779,489 | 812,125 |
| Shanghai Industrial Holdings Limited | 63,000 | 208,773 |
| Shougang Fushan Resources Group Ltd. (b) | 1,238,000 | 415,045 |
| Skyworth Digital Holdings Limited | 262,000 | 124,998 |
| Soho China Limited (b) | 1,034,979 | 890,141 |
| 8,642,587 | ||
| HUNGARY—0.3% | ||
| EGIS Pharmaceuticals PLC | 1,610 | 202,839 |
| Richter Gedeon Nyrt | 11,960 | 208,069 |
| 410,908 | ||
| INDIA—3.2% | ||
| Allahabad Bank | 29,921 | 36,084 |
| Andhra Bank | 214,842 | 176,390 |
| Bajaj Holdings & Investment Limited | 11,984 | 148,161 |
| Bank of Baroda | 16,624 | 131,282 |
| Bharat Petroleum Corporation Ltd. | 38,113 | 201,082 |
| Cairn India Ltd. | 11,906 | 60,495 |
| Chambal Fertilizers & Chemicals Ltd. | 273,368 | 156,759 |
| Gitanjali Gems Limited | 62,659 | 55,448 |
| Grasim Industries Limited | 7,175 | 301,337 |
| Gujarat State Fertilisers & Chemicals Limited | 31,990 | 26,980 |
| Hexaware Technologies Limited | 123,662 | 253,823 |
| Indiabulls Financial Services Limited | 172,508 | 498,745 |
| Indian Bank | 104,046 | 112,181 |
| Oil and Natural Gas Corp. Limited | 192,027 | 815,743 |
| Oil India Limited | 16,727 | 116,291 |
| Rural Electrification Corporation Limited | 145,941 | 438,254 |
| South Indian Bank Ltd. | 388,995 | 123,027 |
| Syndicate Bank | 140,928 | 152,735 |
| Tata Chemicals Ltd. | 40,139 | 152,176 |
| Tech Mahindra Ltd. | 12,940 | 275,521 |
| UCO Bank | 270,993 | 249,978 |
| United Phosphorus Limited | 67,713 | 155,966 |
| 4,638,458 | ||
| INDONESIA—1.5% | ||
| PT Aneka Tambang Tbk | 1,851,489 | 227,039 |
| PT Astra Agro Lestari Tbk | 195,648 | 329,459 |
| PT Bank Bukopin Tbk | 2,989,500 | 165,223 |
| PT Indo Tambangraya Megah Tbk | 25,120 | 57,051 |
| PT Indocement Tunggal Prakarsa Tbk | 158,000 | 245,596 |
| PT Indofood CBP Sukses Makmur Tbk | 265,000 | 234,564 |
| PT Indofood Sukses Makmur Tbk | 316,000 | 192,383 |
| PT PP London Sumatra Indonesia Tbk | 1,256,840 | 137,840 |
| PT Surya Semesta Internusa Tbk | 1,206,000 | 74,985 |
| PT Telekomunikasi Indonesia Persero Tbk | 3,069,790 | 556,698 |
| 2,220,838 | ||
| ISRAEL—0.9% | ||
| First International Bank of Israel Ltd. | 4,735 | 77,691 |
| Mizrahi Tefahot Bank Ltd. | 116,792 | 1,285,267 |
| 1,362,958 | ||
| MALAYSIA—4.2% | ||
| Affin Holdings Berhad | 161,900 | 218,052 |
| Berjaya Sports Toto Berhad | 197,754 | 249,354 |
| British American Tobacco (Malaysia) Berhad | 22,344 | 440,093 |
| DiGi.Com Berhad | 315,951 | 471,091 |
| DRB-HICOM Berhad | 727,199 | 593,450 |
| Genting Malaysia Berhad | 406,509 | 526,298 |
| Hong Leong Financial Group Berhad | 58,755 | 261,734 |
| JCY International Berhad | 341,400 | 65,986 |
| KLCC Property Holdings Berhad | 66,800 | 131,776 |
| Kuala Lumpur Kepong Berhad | 49,400 | 342,519 |
| Kulim (Malaysia) Berhad | 201,100 | 202,365 |
| Lafarge Malaysia Berhad | 46,280 | 133,750 |
| Malaysia Building Society Berhad | 457,212 | 385,744 |
| Parkson Holdings Berhad | 144,000 | 169,646 |
| Telekom Malaysia Berhad | 214,978 | 345,600 |
| Tenaga Nasional Berhad | 295,900 | 819,751 |
| UMW Holdings Berhad | 195,093 | 707,470 |
| 6,064,679 | ||
| MEXICO—3.8% | ||
| Alfa S.A.B. de C.V., Series A | 633,490 | 1,699,610 |
| America Movil S.A.B. de C.V., Series L | 1,016,070 | 1,002,382 |
| Controladora Comercial Mexicana S.A. de C.V. | 83,100 | 351,670 |
| Fomento Economico Mexicano S.A.B. (c) | 2,860 | 277,677 |
| GRUMA, S.A.B. de C.V., Series B (a) | 139,607 | 774,578 |
| Grupo Aeroportuario del Pacific S.A.B. (c) | 5,857 | 299,586 |
| Grupo Carso SAB de C.V., Series A1 | 57,500 | 305,391 |
| Grupo Herdez, S. A. B. de C. V., Series | 27,954 | 94,014 |
| Grupo Mexico S.A.B. de C.V., Series B | 94,398 | 281,172 |
| Grupo Televisa S.A.B. (c) | 12,403 | 346,664 |
| Organizacion Soriana S.A.B. de C.V., Series B (a) | 45,400 | 145,993 |
| 5,578,737 | ||
| PERU—0.2% | ||
| BBVA Banco Continental SA | 65,315 | 140,137 |
| Intercorp Financial Services, Inc. | 3,210 | 94,695 |
| 234,832 | ||
| PHILIPPINES—0.7% | ||
| Aboitiz Equity Ventures, Inc. | 84,860 | 87,706 |
| Alliance Global Group, Inc. | 615,600 | 332,260 |
| Manila Electric Company | 42,630 | 280,023 |
| Rizal Commercial Banking Corporation | 107,590 | 112,433 |
| Universal Robina Corporation | 65,650 | 185,460 |
| 997,882 | ||
| POLAND—1.0% | ||
| KGHM Polska Miedz S.A. (b) | 19,221 | 759,307 |
| PGE S.A. | 143,827 | 766,783 |
| 1,526,090 | ||
| RUSSIA—4.1% | ||
| Gazprom (c) | 195,953 | 1,726,346 |
| LUKoil (c) | 33,946 | 2,152,176 |
| Norilsk Nickel Mining and Metallurgical Co. (c) | 27,550 | 397,547 |
| PhosAgro (d) | 9,427 | 95,401 |
| Sberbank of Russia (a)(c) | 109,942 | 1,324,801 |
| Severstal (d) | 33,657 | 289,787 |
5,986,058 | ||
| SINGAPORE—1.2% | ||
| ComfortDelGro Corporation Limited | 413,000 | 648,347 |
| DBS Group Holdings Ltd. | 42,000 | 549,558 |
| Indofood Agri Resources Ltd. | 214,941 | 135,312 |
| UOL Group Limited | 79,000 | 387,162 |
| 1,720,379 | ||
| SOUTH AFRICA—5.4% | ||
| African Rainbow Minerals Limited | 24,510 | 480,625 |
| Barloworld Limited | 43,989 | 417,615 |
| FirstRand Limited (b) | 300,796 | 1,002,978 |
| Gold Fields Ltd. (c) | 97,346 | 444,871 |
| Imperial Holdings Limited | 38,531 | 836,067 |
| Liberty Holdings Limited | 73,832 | 859,815 |
| Mondi Limited | 18,226 | 310,305 |
| MTN Group Limited | 43,098 | 840,790 |
| Reunert Limited | 26,510 | 191,725 |
| RMB Holdings Ltd. | 130,922 | 601,393 |
| Sasol Ltd. (b) | 37,162 | 1,771,518 |
| Tongaat Hulett Limited | 7,879 | 94,163 |
| 7,851,865 | ||
| SOUTH KOREA—11.6% | ||
| Daelim Industrial Co., Ltd. | 9,505 | 857,920 |
| Daishin Securities Company | 14,541 | 125,293 |
| Daou Technology, Inc. | 56,485 | 725,329 |
| DGB Financial Group Inc. | 12,280 | 185,113 |
| GS Home Shopping, Inc. | 544 | 125,942 |
| Hana Financial Group, Inc. | 12,240 | 419,703 |
| Hanwha Corporation | 8,760 | 308,934 |
| Hyundai Motor Company Ltd. | 7,539 | 1,760,801 |
| Industrial Bank of Korea | 9,390 | 103,977 |
| Kangwon Land Inc. | 7,660 | 203,140 |
| KCC Corporation | 1,516 | 637,618 |
| Kia Motors Corporation | 8,994 | 546,499 |
| KT Corporation | 10,480 | 350,577 |
| KT&G Corporation | 9,463 | 678,020 |
| LG Display Co., Ltd. (a) | 45,540 | 1,099,647 |
| Meritz Fire & Marine Insurance Co., Ltd. | 5,460 | 70,112 |
| Nong Shim Co., Ltd. | 1,386 | 330,806 |
| Samsung Electronics Company, Ltd. | 4,747 | 6,038,243 |
| SK Holdings Co., Ltd. | 3,600 | 649,871 |
| SK Innovation Co., Ltd. | 4,946 | 671,939 |
| SK Telecom Co., Ltd. (b)(c) | 18,236 | 413,957 |
| Soulbrain Co., Ltd. | 4,257 | 204,002 |
| Sungwoo Hitech Co., Ltd. | 23,821 | 353,544 |
| 16,860,987 | ||
| TAIWAN—11.6% | ||
| ASUSTeK Computer, Inc. | 123,488 | 983,577 |
| Chailease Holding Co., Ltd. | 101,200 | 237,538 |
| Chicony Electronics Co., Ltd. | 121,473 | 302,789 |
| Chinatrust Financial Holding Co., Ltd. | 1,017,570 | 664,224 |
| Chunghwa Telecom Co., Ltd. | 230,600 | 738,588 |
| Farglory Land Development Co., Ltd. | 259,302 | 482,349 |
| Fubon Financial Holding Co., Ltd. | 741,000 | 1,025,025 |
| Highwealth Construction Corp. | 137,916 | 304,127 |
| Hon Hai Precision Industry Co., Ltd. | 361,209 | 927,242 |
| Lite-On Technology Corp. | 433,994 | 739,788 |
| MStar Semiconductor, Inc. | 26,000 | 240,065 |
| Pegatron Corporation (a) | 434,416 | 620,028 |
| Phison Electronics Corp. | 113,015 | 814,157 |
| Pou Chen Corporation | 724,631 | 844,304 |
| Powertech Technology, Inc. | 339,000 | 637,481 |
| President Chain Store Corp. | 158,915 | 1,147,507 |
| Radiant Opto-Electronics Corporation | 220,409 | 786,456 |
| Taiwan Semiconductor Manufacturing Co., Ltd. | 716,270 | 2,434,644 |
| TECO Electric & Machinery Co., Ltd. | 1,016,983 | 1,076,591 |
| U-Ming Marine Transport Corporation | 45,246 | 82,176 |
| Uni-President Enterprises Corporation | 666,424 | 1,241,924 |
| United Microelectronics Corporation | 1,171,401 | 501,174 |
| 16,831,754 | ||
| THAILAND—2.9% | ||
| Bangkok Bank PCL (e) | 70,636 | 442,604 |
| CP ALL PCL | 1,057,812 | 1,192,068 |
| Electricity Generating PCL | 52,679 | 208,830 |
| Kiatnakin Bank PCL | 169,100 | 229,755 |
| Krung Thai Bank PCL | 1,695,946 | 1,040,990 |
| PTT Global Chemical PCL | 372,900 | 888,141 |
| Thanachart Capital PCL | 196,900 | 210,874 |
| 4,213,262 | ||
| TURKEY—2.7% | ||
| Eis Eczacibasi Ilac Ve Sinai | 291,995 | 368,164 |
| Enka Insaat ve Sanayi A.S. | 142,434 | 424,226 |
| Eregli Demir ve Celik Fabrikalari T.A.S. (b) | 610,610 | 775,955 |
| Ford Otomotiv Sanayi A.S. | 17,496 | 241,444 |
| Gubre Fabrikalari TAS (a) | 25,439 | 185,631 |
| Tekfen Holding A.S. | 99,118 | 224,854 |
| Tofas Turk Otomobil Fabrikasi A.S. | 48,420 | 295,640 |
| Tupras—Turkiye Petrol Rafinerileri A.S. | 26,475 | 561,173 |
| Turkiye Sise ve Cam Fabrikalari A.S. | 360,587 | 497,608 |
| Ulker Biskuvi Sanayi A.S. | 39,859 | 273,048 |
| 3,847,743 | ||
| TOTAL COMMON STOCK | ||
| (Cost $109,686,221) | 115,655,682 | |
| Preferred Stock—2.5% | ||
| BRAZIL—2.5% | ||
| Banco Bradesco S.A. | 25,889 | 354,131 |
| Banrisul S.A. | 51,230 | 352,921 |
| Eletropaulo Metropolitana S.A. | 34,480 | 132,738 |
| Itau Unibanco Holding S.A. | 44,319 | 627,783 |
| Itausa-Investimentos Itau S.A. | 315,400 | 1,278,102 |
| Klabin S.A. | 73,881 | 387,876 |
| Vale S.A., Class A | 35,971 | 510,829 |
| TOTAL PREFERRED STOCK | ||
| (Cost $4,733,024) | 3,644,380 | |
| Mutual Funds—16.7% | ||
| United States—16.7% | ||
Pear Tree PanAgora Risk Parity Emerging Markets Fund (Cost $23,535,949) | 2,338,793 | 24,159,734 |
| Short Term Investments—0.8% | ||
| Par Value | Value | |
State Street Bank & Trust Co., Repurchase Agreement .0%, 10/01/13, (Dated 09/30/13), Collateralized by $1,135,000 par U.S. Treasury Note-.25% due 03/31/2014, Market Value $1,136,019.23, Repurchase Proceeds $1,110,748 (Cost $1,110,748) | $1,110,748 | 1,110,748 |
| TOTAL INVESTMENTS (EXCLUDING INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED) | ||
| (Cost $139,065,942) | 144,570,544 | |
| INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED—4.6% | ||
| Money Market—4.6% | ||
Western Asset Institutional Cash Reserves—Inst. (Cost $7,149,823) | 7,149,823 | 7,149,823 |
| TOTAL INVESTMENTS—104.3% | ||
| (Cost $146,215,765) | 151,720,367 | |
| OTHER ASSETS & LIABILITIES (Net)—(4.3%) | (6,665,876) | |
| NET ASSETS—100% | $145,054,491 |
| (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 |
| The percentage of each investment category is calculated as a percentage of net assets. |
SECTOR ALLOCATIONS (as a percentage of Total Net Assets) | |
| Financials | 20.2% |
| Information Technology | 13.7% |
| Energy | 11.0% |
| Consumer Discretionary | 8.3% |
| Consumer Staples | 7.9% |
| Industrials | 6.6% |
| Materials | 6.4% |
| Telecommunication Services | 5.0% |
| Utilities | 1.7% |
| Health Care | 1.4% |
| Mutual Funds | 16.7% |
| Cash and Other Assets (Net) | 1.1% |
The accompanying notes are an integral part of these financial statements.
PEAR TREE PANAGORA RISK PARITY EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
September 30, 2013 (Unaudited)
Common Stock—85.7%
| Shares | Value | |
| BRAZIL—4.3% | ||
| América Latina Logística | 2,800 | $ 11,044 |
| Banco do Brasil S.A. | 2,400 | 27,934 |
| Banco Santander Brasil S.A. (c) | 2,823 | 19,620 |
| BR Properties S.A. | 3,200 | 28,384 |
| BRF S.A. | 1,300 | 31,608 |
| CCR S.A. | 4,200 | 32,810 |
| Cetip S.A. Mercados Organizados | 2,200 | 23,259 |
| Cielo S.A. | 2,100 | 56,676 |
| Companhia Brasileira de Distribuicao SP (c) | 536 | 24,667 |
| Companhia Energetica de Minas Gerais (c) | 2,907 | 25,116 |
| Companhia Hering | 1,600 | 24,235 |
| Companhia Paranaense de Energia (c) | 1,619 | 22,601 |
| Companhia Siderurgica Nacl (c) | 4,201 | 17,938 |
| Cosan S.A. Industria e Comercio | 1,700 | 32,700 |
| CPFL Energia S.A. (c) | 686 | 11,834 |
| Cyrela Brazil Realty Empreendimentos e Participacoes S.A. | 2,200 | 16,592 |
| EcoRodovias Infraestrutura e Logística S.A. | 5,500 | 37,542 |
| Embraer S.A. (c) | 715 | 23,216 |
| Eneva S.A. (a) | 2,300 | 5,437 |
| Gerdau S.A. (c) | 1,224 | 9,131 |
| Hypermarcas S.A. | 2,800 | 22,542 |
| Kroton Educacional S.A. | 1,300 | 18,444 |
| Lojas Renner S.A.. | 1,000 | 28,605 |
| MRV Engenharia | 3,600 | 14,767 |
| Natura Cosméticos S.A. | 1,300 | 28,974 |
| Odontoprev S.A. | 12,100 | 53,010 |
| Petroleo Brasileiro S.A. | 4,100 | 31,309 |
| Porto Seguro S.A. | 2,600 | 32,779 |
| Qualicorp S.A. (a) | 6,100 | 55,618 |
| Souza Cruz S.A. | 2,100 | 25,009 |
| Telefonica Brasil S.A. (c) | 2,599 | 58,321 |
| TIM Participacoes S.A. (c) | 2,183 | 51,453 |
| Totvs S.A. | 4,100 | 69,209 |
| Ultrapar Participacoes S.A. | 800 | 19,689 |
| Vale S.A. | 1,200 | 18,619 |
| Weg S.A. | 2,300 | 27,961 |
| 1,038,653 | ||
| CHINA—4.7% | ||
| Anhui Conch Cement Company Limited H | 5,000 | 16,021 |
| Bank of Communications Co., Ltd. H | 32,000 | 23,561 |
| BBMG Corporation H | 40,000 | 26,820 |
| Beijing Capital International Airport Co., Ltd. H | 22,000 | 14,524 |
| Beijing Enterprises Holdings Limited | 2,500 | 18,052 |
| Belle International Holdings Limited | 12,000 | 17,423 |
| Brilliance China Automotive Holdings, Ltd. (a) | 8,000 | 12,028 |
| China Agri-Industries Holdings Limited | 45,000 | 21,295 |
| China BlueChemical Ltd. H | 64,000 | 37,796 |
| China Coal Energy Co., Ltd. | 39,000 | 23,434 |
| China Communications Services Corporation Ltd. H | 106,000 | 61,916 |
| China Construction Bank Corporation | 37,000 | 28,530 |
| China International Marine Containers Group Co., Ltd. H | 8,400 | 15,315 |
| China Longyuan Power Group H | 24,000 | 24,943 |
| China National Building Material Co., Ltd. H | 16,000 | 15,370 |
| China Oilfield Services Limited H | 8,000 | 20,074 |
| China Petroleum & Chemical Corporation | 52,000 | 40,700 |
| China Shenhua Energy Co., Ltd. | 9,500 | 28,971 |
| China Shipping Container Lines Co., Ltd. H (a) | 31,000 | 8,074 |
| China Telecom Corporation Limited | 90,000 | 44,795 |
| Datang International Power Generation Co., Ltd. | 66,000 | 29,105 |
| ENN Energy Holdings Ltd. | 4,000 | 22,333 |
| Huaneng Power International Inc. H | 28,000 | 28,053 |
| Inner Mongolia Yitai Coal Co., Ltd., Class B | 10,000 | 20,000 |
| Jiangsu Expressway Co. Ltd.—H | 20,000 | 23,623 |
| Kingboard Chemical Holdings, Ltd. | 12,500 | 31,914 |
| PetroChina Company Limited (c) | 279 | 30,676 |
| Shandong Weigao Group Medical Polymer Co., Ltd. | 20,000 | 19,625 |
| Shanghai Pharmaceuticals Holding Co., Ltd. | 31,200 | 60,265 |
| Shenzhou International Group | 9,000 | 29,419 |
| Sino Biopharmaceutical Limited | 40,000 | 27,182 |
| Sinopec Shanghai Petrochemical Co., Ltd. (a) | 86,000 | 31,937 |
| Sinopharm Group Co., Ltd. H | 22,400 | 56,207 |
| Tencent Holdings Limited | 400 | 20,982 |
| Tingyi (Cayman Islands) Holding Corporation | 10,000 | 26,434 |
| Tsingtao Brewery Co., Ltd. | 4,000 | 30,508 |
| Uni-President China Holdings Limited | 17,000 | 17,054 |
| Wumart Stores, Inc. H | 10,000 | 17,923 |
| Yantai Changyu Pioneer Wine Company Ltd.—B | 8,100 | 27,647 |
| Yanzhou Coal Mining Company Limited | 16,000 | 15,989 |
| Zhejiang Expressway Co., Ltd. | 20,000 | 18,491 |
| ZTE Corporation H (a) | 25,000 | 51,578 |
| 1,136,587 | ||
| COLOMBIA—3.6% | ||
| Almacenes Exito S.A. | 7,654 | 130,699 |
| Bancolombia S.A. | 4,821 | 67,887 |
| Cementos Argos S.A. | 13,986 | 73,213 |
| CEMEX Latam Holdings, S.A. (a) | 7,068 | 55,499 |
| Corporacion Financiera Colombiana S.A. | 2,649 | 54,303 |
| Ecopetrol S.A. | 55,485 | 127,218 |
| Grupo Argos S.A. | 5,907 | 69,698 |
| Grupo de Inversiones Suramericana S.A. | 3,709 | 74,013 |
| Interconexión Electrica S.A. | 20,177 | 99,813 |
| Isagen S.A. E.S.P. (a) | 68,220 | 104,278 |
| 856,621 | ||
| CZECH REPUBLIC—0.7% | ||
| CEZ A.S. | 2,507 | 64,875 |
| Komercni Banka A.S. | 229 | 51,016 |
| Telefónica Czech Republic, A.S. | 3,833 | 60,907 |
| 176,798 | ||
| EGYPT—1.3% | ||
| Commercial International Bank | 13,614 | 75,561 |
| Orascom Telecom (Reg S) (a)(d) | 26,197 | 82,232 |
| Talaat Moustafa Group (TMG) Holding (a) | 99,296 | 72,042 |
| Telecom Egypt SAE | 47,861 | 93,062 |
| 322,897 | ||
| HONG KONG—2.2% | ||
| ANTA Sports Products, Ltd. | 11,000 | 14,099 |
| China Gas Holdings Ltd. | 20,000 | 21,792 |
| China Merchants Holdings International Co., Ltd. | 6,000 | 21,817 |
| China Mobile Limited | 5,000 | 55,930 |
| China Resources Enterprise | 8,000 | 25,479 |
| China Resources Gas Group Limited | 8,000 | 20,549 |
| China Resources Power Holdings Co., Ltd. | 12,000 | 28,626 |
| China Unicom (Hong Kong) Limited (c) | 6,282 | 96,868 |
| CNOOC Limited (c) | 169 | 34,104 |
| GCL-Poly Energy Holdings Ltd. (a) | 99,000 | 28,595 |
| Golden Eagle Retail Group Ltd. | 13,000 | 20,283 |
| Guangdong Investment Limited | 38,000 | 32,584 |
| Hengan International Group Co., Ltd. | 2,500 | 29,238 |
| Lenovo Group Limited | 34,000 | 35,424 |
| Sihuan Pharmaceutical Holdings Group Ltd. | 38,000 | 25,822 |
| Want Want China Holdings Limited | 16,000 | 24,303 |
| Yingde Gases Group Co., Ltd. | 25,500 | 24,989 |
| 540,502 | ||
| HUNGARY—0.5% | ||
| Magyar Telekom Telecommunications PLC | 40,813 | 56,802 |
| MOL Hungarian Oil an Gas Nyrt. (a) | 456 | 32,987 |
| OTP Bank Nyrt. | 1,249 | 24,712 |
| 114,501 | ||
| INDONESIA—5.4% | ||
| PT Adaro Energy Tbk | 432,000 | 33,575 |
| PT Astra Agro Lestari Tbk | 28,000 | 47,150 |
| PT Astra International Tbk | 73,000 | 40,661 |
| PT Bank Central Asia Tbk | 29,000 | 25,043 |
| PT Bank Danamon Indonesia Tbk | 97,500 | 33,468 |
| PT Bank Mandiri Tbk | 30,000 | 20,596 |
| PT Bank Negara Indonesia (Persero) Tbk | 63,500 | 22,346 |
| PT Bank Rakyat Indonesia Tbk | 36,000 | 22,539 |
| PT Bumi Resources Tbk (a) | 912,500 | 35,854 |
| PT Bumi Serpong Damai Tbk | 231,000 | 28,725 |
| PT Charoen Pokphand Indonesia Tbk | 92,500 | 27,159 |
| PT Global Mediacom Tbk | 237,000 | 39,500 |
| PT Gudang Garam Tbk | 15,000 | 45,337 |
| PT Indo Tambangraya Megah Tbk | 12,000 | 27,254 |
| PT Indocement Tunggal Prakarsa Tbk | 38,500 | 59,845 |
| PT Indofood CBP Sukses Makmur Tbk | 27,500 | 24,342 |
| PT Indofood Sukses Makmur Tbk | 43,500 | 26,483 |
| PT Indosat Tbk | 159,000 | 56,982 |
| PT Jasa Marga (Persero) Tbk | 154,000 | 69,154 |
| PT Kalbe Farma Tbk (a) | 857,500 | 87,379 |
| PT Lippo Karawaci Tbk (a) | 395,000 | 37,180 |
| PT Matahari Department Store Tbk (a) | 31,000 | 28,109 |
| PT Media Nusantara Citra Tbk | 157,500 | 36,723 |
| PT Perusahaan Gas Negara (Persero) Tbk | 202,500 | 90,933 |
| PT Semen Indonesia (Persero) Tbk | 55,000 | 61,744 |
| PT Tambang Batubara Bukit Asam (Persero) Tbk | 39,500 | 43,491 |
| PT Telekomunikasi Indonesia Tbk (c) | 2,224 | 80,753 |
| PT Unilever Indonesia Tbk | 17,000 | 44,262 |
| PT United Tractors Tbk | 41,000 | 57,711 |
| PT XL Axiata Tbk | 146,000 | 53,584 |
| 1,307,882 | ||
| MALAYSIA—10.0% | ||
| AirAsia Berhad | 48,900 | 38,406 |
| Alliance Financial Group Berhad | 20,500 | 31,509 |
| AMMB Holdings Berhad | 14,900 | 33,919 |
| Astro Malaysia Holdings Berhad | 55,200 | 49,451 |
| Axiata Group Berhad | 32,300 | 68,177 |
| Berjaya Sports Toto Berhad | 69,300 | 87,382 |
| British American Tobacco (Malaysia) Berhad | 3,700 | 72,876 |
| Bumi Armada Berhad | 48,500 | 58,030 |
| CIMB Group Holdings Berhad | 19,100 | 44,066 |
| DiGi.Com Berhad | 69,100 | 103,030 |
| Felda Global Ventures Holdings Berhad | 47,600 | 61,335 |
| Gamuda Berhad | 22,500 | 31,753 |
| Genting Berhad | 12,100 | 38,607 |
| Genting Malaysia Berhad | 38,100 | 49,327 |
| Genting Plantation Berhad | 14,800 | 42,681 |
| Hong Leong Bank Berhad | 11,700 | 50,181 |
| Hong Leong Financial Group Berhad | 7,700 | 34,301 |
| IHH Healthcare Berhad (a) | 76,400 | 97,273 |
| IJM Corporation Berhad | 20,600 | 36,530 |
| IOI Corporation Berhad | 24,000 | 39,466 |
| Kuala Lumpur Kepong Berhad | 8,300 | 57,549 |
| Malayan Banking Berhad | 10,400 | 31,396 |
| Malaysia Airports Holdings Berhad | 18,700 | 43,544 |
| Maxis Berhad | 42,700 | 91,701 |
| MISC Berhad (a) | 25,600 | 40,212 |
| MMC Corporation Berhad | 59,800 | 47,517 |
| Parkson Holdings Berhad | 50,600 | 59,612 |
| Petronas Chemicals Group Berhad | 49,800 | 104,657 |
| Petronas Dagangan Berhad | 13,300 | 118,331 |
| Petronas Gas Berhad | 11,700 | 78,969 |
| PPB Group Berhad | 10,100 | 44,063 |
| Public Bank Berhad | 10,400 | 56,539 |
| RHB Capital Berhad | 10,400 | 24,121 |
| SapuraKencana Petroleum Berhad | 38,200 | 43,245 |
| Sime Darby Berhad | 24,800 | 72,281 |
| Telekom Malaysia Berhad | 62,000 | 99,672 |
| Tenaga Nasional Berhad | 29,100 | 80,618 |
| UEM Sunrise Berhad | 40,200 | 31,450 |
| UMW Holdings Berhad | 18,500 | 67,087 |
| YTL Corporation Berhad | 135,800 | 64,161 |
| YTL Power International Berhad | 168,000 | 91,744 |
| 2,416,769 | ||
| MEXICO—6.0% | ||
| Alfa S.A.B. de C.V., Series A | 17,000 | 45,610 |
| America Movil S.A.B. Series L (c) | 6,100 | 120,841 |
| Arca Continental S.A.B. de C.V. | 4,300 | 26,636 |
| Cemex S.A.B. CPO (a) | 34,500 | 38,519 |
| Coca-Cola FEMSA SAB de C.V. (c) | 489 | 61,604 |
| Compartamos S.A.B. de C.V. | 29,000 | 53,736 |
| Controladora Comercial Mexicana S.A. de C.V. | 7,800 | 33,009 |
| El Puerto de Liverpool S.A.B. de C.V. | 9,900 | 111,210 |
| Fibra Uno Administracion S.A. de C.V. | 20,484 | 56,498 |
| Fomento Economico Mexicano S.A.B. (c) | 424 | 41,166 |
| Genomma Lab Internacional SAB de C.V. (a)(b) | 46,300 | 105,217 |
| Grupo Aeroportuario del Pacifico S.A.B. (c) | 1,190 | 60,869 |
| Grupo Aeroportuario del Sureste, S. A. B. de C.V., Series B | 4,000 | 43,559 |
| Grupo Bimbo, S.A. de C.V. | 10,900 | 33,502 |
| Grupo Carso SAB de C.V., Series A1 | 9,000 | 47,800 |
| Grupo Comercial Chedraui S.A. de C.V | 13,400 | 42,113 |
| Grupo Financiero Banorte SAB de C.V. | 6,900 | 42,772 |
| Grupo Financiero Inbursa SAB de C.V. | 21,400 | 48,632 |
| Grupo Mexico S.A.B. de C.V., Series B | 17,500 | 52,125 |
| Grupo Televisa S.A.B. (c) | 3,723 | 104,058 |
| Industrias CH SAB de C.V. Series B (a) | 5,400 | 31,820 |
| Industrias Penoles SAB de C.V. (a) | 1,115 | 32,584 |
| Kimberly-Clark de Mexico S.A. de C.V., Class A | 13,400 | 38,976 |
| Mexichem SAB de C.V. | 8,500 | 36,869 |
| Minera Frisco S.A.B. De C.V. (a) | 12,100 | 31,268 |
| OHL Mexico, S.A.B. de C.V. (a) | 16,900 | 44,250 |
| Santander Mexico SAB de C.V. | 18,200 | 50,185 |
| Wal-Mart de Mexico, S.A.B. de C.V. | 10,200 | 26,560 |
| 1,461,988 | ||
| MOROCCO—2.2% | ||
| Attijariwafa Bank | 4,414 | 168,979 |
| Douja Prom Addoha | 26,691 | 151,497 |
| Maroc Telecom S.A. | 19,349 | 221,984 |
| 542,460 | ||
| PERU—0.8% | ||
| Companhia de Minas Buenaventura S.A. (c) | 4,001 | 46,852 |
| Credicorp Ltd. | 709 | 91,078 |
| Southern Copper Corporation | 1,596 | 43,475 |
| 181,405 | ||
| PHILIPPINES—5.2% | ||
| Aboitiz Equity Ventures, Inc. | 54,500 | 56,328 |
| Aboitiz Power Corporation | 141,900 | 102,661 |
| Alliance Global Group, Inc. | 60,300 | 32,546 |
| Ayala Corporation | 3,260 | 45,261 |
| Ayala Land Inc. | 59,400 | 37,176 |
| Bank of the Philippine Islands | 20,800 | 46,052 |
| BDO Unibank, Inc. | 31,060 | 53,503 |
| DMCI Holdings, Inc. (a) | 34,730 | 36,692 |
| Energy Development Corporation | 806,600 | 100,964 |
| Globe Telecom, Inc. | 2,810 | 103,261 |
| International Container Terminal Services, Inc. | 25,030 | 55,763 |
| Jollibee Foods Corporation | 41,360 | 160,063 |
| Metro Pacific Investments Corporation | 412,400 | 42,623 |
| Metropolitan Bank & Trust Company | 21,775 | 41,509 |
| Philippine Long Distance Telephone Company (c) | 1,815 | 123,130 |
| SM Investments Corporation | 2,988 | 53,529 |
| SM Prime Holdings, Inc. | 144,100 | 53,020 |
| Universal Robina Corporation | 41,910 | 118,395 |
| 1,262,476 | ||
| POLAND—4.2% | ||
| Alior Bank S.A. (a) | 707 | 20,373 |
| Bank Handlowy w Warszawie S.A. | 979 | 34,816 |
| Bank Pekao S.A. | 612 | 35,000 |
| Bank Zachodni WBK S.A. | 285 | 31,776 |
| BRE Bank S.A. | 215 | 31,005 |
| Cyfrowy Polsat S.A. | 13,565 | 92,398 |
| ENEA S.A. | 14,609 | 66,230 |
| Eurocash S.A. | 4,213 | 64,952 |
| Grupa Azoty S.A. | 1,675 | 39,712 |
| Grupa LOTOS S.A. (a) | 2,989 | 35,241 |
| Jastrzębska Spółka Węglowa S.A. | 1,544 | 36,236 |
| Kernel Holding S.A. | 3,227 | 50,971 |
| KGHM Polska Miedz S.A. | 815 | 32,196 |
| PGE S.A. | 13,573 | 72,362 |
| PKO Bank Polski S.A. | 2,502 | 29,740 |
| Polski Koncern Naftowy ORLEN S.A. | 2,571 | 36,367 |
| Polskie Gornictwo Naftowe i Gazownictwo S.A. | 37,217 | 73,094 |
| PZU S.A. (a) | 282 | 38,317 |
| Synthos S.A. | 22,727 | 34,733 |
| Tauron Polska Energia S.A. | 42,350 | 64,993 |
| Telekomunikacja PO (b) | 36,404 | 96,807 |
1,017,319 | ||
| RUSSIA—3.7% | ||
| Federal Grid Company of Unified Energy System JSC (a) | 10,020,000 | 30,607 |
| Gazprom (c) | 3,951 | 34,808 |
| Inter Rao UES OJSC (a) | 89,400,000 | 30,654 |
| LSR Group OJSC (Reg S) (d) | 13,132 | 55,745 |
| LUKoil (c) | 529 | 33,539 |
| Magnit OJSC (Reg S) (d) | 1,495 | 92,316 |
| MegaFon (d) | 1,224 | 43,146 |
| Mobile TeleSystems (c) | 2,729 | 60,748 |
| Norilsk Nickel Mining and Metallurgical Co. (c) | 3,515 | 50,721 |
| NovaTek OAO (Reg S) (d) | 229 | 30,274 |
| OAO Rostelecom | 14,710 | 46,196 |
| OAO Severstal (Reg S) (d) | 767 | 6,604 |
| OC Rosneft OJSC (Reg S) (d) | 4,080 | 33,048 |
| RusHydro Management Co. (c) | 34,005 | 53,388 |
| Severstal (d) | 6,043 | 52,030 |
| Sistema JSFC (Reg S) (d) | 1,952 | 50,732 |
| Surgutneftegas OJSC (c) | 5,766 | 50,241 |
| TMK (Reg S) (d) | 1,296 | 16,770 |
| Uralkali OJSC | 10,520 | 55,229 |
| VTB Bank OJSC | 40,670,000 | 53,636 |
| 880,432 | ||
| SOUTH AFRICA—6.5% | ||
| African Bank Investments Limited | 13,328 | 22,154 |
| Aspen Pharmacare Holdings Limited | 2,605 | 68,128 |
| Barloworld Limited | 5,662 | 53,753 |
| Bidvest Group Limited | 2,438 | 61,079 |
| Discovery Ltd. | 1,769 | 14,276 |
| Exxaro Resources Ltd. | 4,543 | 74,385 |
| Foschini Limited | 4,520 | 46,816 |
| Gold Fields Ltd. (c) | 4,490 | 20,519 |
| Harmony Gold Mining Co., Ltd. (c) | 9,449 | 31,938 |
| Impala Platinum Holdings Limited | 818 | 10,086 |
| Imperial Holdings Limited | 1,494 | 32,418 |
| Investec Ltd. | 4,159 | 27,309 |
| Kumba Iron Ore Limited | 507 | 23,415 |
| Life Healthcare Group Holdings Ltd. | 20,143 | 71,656 |
| Massmart Holdings Ltd. | 2,215 | 37,065 |
| Mediclinic International, Ltd. | 7,819 | 57,809 |
| MMI Holdings Ltd. | 13,440 | 32,641 |
| Mr Price Group Ltd. | 2,204 | 30,504 |
| MTN Group Limited | 3,432 | 66,954 |
| Nampak Ltd. | 7,606 | 23,628 |
| Naspers Limited N Shs | 446 | 41,216 |
| Netcare Limited | 27,555 | 65,824 |
| Northam Platinum, Ltd. | 2,521 | 10,639 |
| Pick n Pay Stores Ltd. | 10,396 | 43,057 |
| PPC, Ltd. | 8,454 | 25,412 |
| Redefine Properties Ltd. (a) | 26,601 | 25,815 |
| Remgro Limited | 1,906 | 36,804 |
| Reunert Limited | 7,385 | 53,410 |
| Sanlam Limited | 7,618 | 35,532 |
| Sappi Ltd. (a) | 8,232 | 20,689 |
| Sasol Ltd. | 1,809 | 86,235 |
| Shoprite Holdings Ltd. | 3,148 | 51,826 |
| Spar Group Limited (The) (a) | 3,556 | 42,899 |
| Steinoff International Holdings Limited (a) | 14,100 | 50,173 |
| Tiger Brands Limited | 1,324 | 39,418 |
| Truworths International Ltd. | 3,723 | 33,351 |
| Vodacom Group (Proprietary) Limited | 6,231 | 77,184 |
| Woolworths Holdings Limited | 4,724 | 34,884 |
| 1,580,901 | ||
| SOUTH KOREA—5.2% | ||
| Amore Pacific Corporation | 25 | 21,053 |
| BS Financial Group, Inc. | 1,490 | 22,253 |
| Celltrion Inc. | 800 | 34,801 |
| Cheil Industries Inc. | 206 | 17,578 |
| CJ CheilJedang Corp. | 116 | 29,845 |
| Daewoo International Corporation | 420 | 14,831 |
| Daewoo Securities Co., Ltd. | 1,770 | 16,207 |
| DGB Financial Group Inc. | 1,410 | 21,255 |
| E-MART Co., Ltd. | 102 | 22,969 |
| GS Holdings Corp. | 660 | 34,637 |
| Hana Financial Group, Inc. | 490 | 16,802 |
| Hanwha Corporation | 600 | 21,160 |
| Hanwha Life Insurance Co., Ltd. | 2,670 | 17,267 |
| Hyosung Corporation | 364 | 24,285 |
| Hyundai Mobis Co.,Ltd. | 73 | 19,427 |
| Hyundai Steel Co., Ltd. | 364 | 28,011 |
| Industrial Bank of Korea | 1,890 | 20,928 |
| KB Financial Group Inc. | 840 | 29,389 |
| Korea Aerospace Industries, Ltd. | 290 | 7,232 |
| Korea Electric Power Corporation (a) | 1,830 | 51,170 |
| Korea Gas Corporation | 863 | 45,773 |
| Korea Zinc Co., Ltd. | 64 | 19,355 |
| Kumho Petro Chemical Co., Ltd. | 115 | 10,861 |
| KT Corporation (c) | 3,199 | 53,647 |
| KT&G Corporation | 320 | 22,928 |
| LG Display Co., Ltd. (a) | 800 | 19,317 |
| LG Household & Healthcare | 45 | 22,821 |
| LG Innotek Co., Ltd. (a) | 149 | 11,910 |
| LG Uplus Corp. (a) | 3,620 | 38,906 |
| Lotte Confectionery Co. Ltd. | 13 | 20,625 |
| Lotte Shopping Co., Ltd. | 52 | 18,411 |
| NCSoft Corporation | 106 | 18,839 |
| Naver Corp. | 55 | 28,506 |
| NHN Entertainment Corporation (a) | 179 | 19,602 |
| Orion Corporation | 19 | 16,849 |
| Amorepacific Group | 56 | 20,505 |
| Samsung Card Co, Ltd. | 420 | 15,633 |
| Samsung Electro-Mechanics Co., Ltd. | 282 | 22,646 |
| Samsung Electronics Company, Ltd. | 20 | 25,440 |
| Samsung Fire & Marine Insurance Co., Ltd. | 74 | 16,973 |
| Samsung Life Insurance Co., Ltd | 183 | 17,795 |
| Samsung SDI Company, Ltd. | 161 | 28,090 |
| Samsung Securities Co., Ltd. | 380 | 16,637 |
| Shinhan Financial Group Co., Ltd. | 600 | 24,370 |
| Shinsegae Co., Ltd. | 84 | 18,056 |
| SK C&C Co., Ltd. | 221 | 23,649 |
| SK Hynix Inc. (a) | 700 | 19,704 |
| SK Innovation Co., Ltd. | 243 | 33,013 |
| SK Telecom Co., Ltd. (c) | 2,365 | 53,685 |
| S-Oil Corp. | 483 | 35,011 |
| Yuhan Co., Ltd. | 236 | 43,042 |
| 1,253,699 | ||
| TAIWAN—7.0% | ||
| Asia Cement Corporation | 20,400 | 25,804 |
| AU Optronics Corp. (a)(c) | 7,122 | 25,995 |
| Cathay Financial Holding Co., Ltd. | 12,000 | 17,087 |
| Chang Hwa Commercial Bank | 35,310 | 20,601 |
| Cheng Shin Rubber Industry Co., Ltd. | 6,900 | 18,063 |
| China Airlines Ltd. | 51,000 | 19,146 |
| China Motor Corporation | 22,000 | 19,867 |
| China Petrochemical Development Corporation | 48,000 | 23,621 |
| China Steel Corporation | 40,400 | 35,458 |
| Chinatrust Financial Holding Co., Ltd. | 26,750 | 17,461 |
| Chunghwa Telecom Co., Ltd. (b)(c) | 4,982 | 157,332 |
| CTCI Corporation | 22,000 | 35,567 |
| EVA Airways Corporation | 32,000 | 18,182 |
| Evergreen Marine Corporation (a) | 46,000 | 27,226 |
| Far Eastern New Century Corporation | 21,420 | 23,617 |
| Far EasTone Telecommunications Co., Ltd. | 35,000 | 87,243 |
| Farglory Land Development Co., Ltd. | 7,000 | 13,021 |
| Feng Hsin Iron & Steel Co., Ltd. | 14,000 | 24,622 |
| Formosa Chemicals & Fiber Corporation | 11,330 | 30,119 |
| Formosa International Hotels Corporation | 2,200 | 24,703 |
| Formosa Petrochemical Corporation | 39,000 | 102,489 |
| Formosa Plastics Corporation | 12,480 | 32,206 |
| Formosa Taffeta Co., Ltd. | 32,000 | 31,170 |
| Fubon Financial Holding Co., Ltd. | 14,000 | 19,366 |
| Giant Manufacturing Co., Ltd. | 4,000 | 27,260 |
| Highwealth Construction Corp. | 14,000 | 30,872 |
| HIWIN Technologies Corp. | 3,000 | 20,090 |
| Hotai Motor Co., Ltd. | 2,000 | 21,781 |
| Hua Nan Financial Holdings Co., Ltd. | 38,850 | 22,206 |
| Lite-On Technology Corp. | 4,000 | 6,818 |
| Mega Financial Holding Co., Ltd. | 22,000 | 18,044 |
| Nankang Rubber Tire Corp., Ltd. | 17,000 | 20,497 |
| Nan Ya Plastics Corporation | 10,100 | 21,247 |
| Pou Chen Corporation | 21,000 | 24,468 |
| President Chain Store Corp. | 8,000 | 57,767 |
| ScinoPharm Taiwan Ltd. | 28,080 | 83,099 |
| Standard Foods Corporation | 14,950 | 44,799 |
| Taishin Financial Holding Co., Ltd. | 38,118 | 17,598 |
| Taiwan Business Bank Co., Ltd. | 63,440 | 18,967 |
| Taiwan Cement Corporation | 16,000 | 23,161 |
| Taiwan Cooperative Financial Holding Co., Ltd. | 49,820 | 27,381 |
| Taiwan Fertilizer Co., Ltd. | 10,000 | 23,574 |
| Taiwan Glass Industry Corporation | 20,000 | 20,327 |
| Taiwan Mobile Co., Ltd. | 26,000 | 92,333 |
| TECO Electric & Machinery Co., Ltd. | 25,000 | 26,465 |
| TSRC Corp. | 11,000 | 19,644 |
| U-Ming Marine Transport Corporation | 19,000 | 34,508 |
| Uni-President Enterprises Corporation | 28,620 | 53,335 |
| Walsin Lihwa Corporation | 34,000 | 10,384 |
| Wan Hai Lines, Ltd. | 64,000 | 36,690 |
| Yang Ming Marine Transport Corporation (a) | 39,000 | 17,873 |
| Yuanta Financial Holding Co., Ltd. | 32,000 | 16,397 |
| Yulon Motor Co., Ltd. | 12,000 | 20,090 |
| 1,707,641 | ||
| THAILAND—7.3% | ||
| Advanced Info Service For Rg | 15,000 | 122,283 |
| Airports of Thailand PCL | 12,600 | 75,930 |
| Bangkok Bank PCL (e) | 9,200 | 57,647 |
| Bangkok Dusit Medical Services F | 29,500 | 118,830 |
| Bank of Ayudhya PCL | 40,900 | 49,360 |
| Banpu Public Company Limited | 52,000 | 45,716 |
| BEC World PCL | 51,700 | 93,797 |
| Central Pattana PCL | 43,200 | 60,767 |
| Charoen Pokphand Foods PCL | 141,100 | 108,261 |
| CP ALL PCL | 75,200 | 84,744 |
| Glow Energy PCL | 61,200 | 127,663 |
| Home Product Center PCL | 186,200 | 72,623 |
| Indorama Ventures Public Company Limited | 128,000 | 89,207 |
| IRPC PCL | 501,100 | 50,302 |
| Kasikornbank PCL (e) | 10,400 | 58,184 |
| Krung Thai Bank PCL | 72,200 | 44,317 |
| Minor International PCL | 119,200 | 92,220 |
| PTT Exploration & Production PCL | 10,600 | 55,406 |
| PTT Global Chemical PCL | 32,100 | 76,453 |
| PTT PCL | 4,800 | 48,491 |
| Siam Cement Public Company (e) | 5,800 | 78,990 |
| Siam Commercial Bank PCL | 11,300 | 53,465 |
| Thai Oil PCL | 25,300 | 46,710 |
| True Corp PCL (a) | 279,100 | 69,151 |
| 1,780,517 | ||
| TURKEY—4.9% | ||
| Akbank T.A.S. | 6,308 | 23,297 |
| Anadolu Efes Biracilik VE | 5,613 | 65,199 |
| Arcelik A.S. | 9,793 | 57,120 |
| BIM Birlesik Magazalar A.S. | 2,987 | 61,682 |
| Coca-Cola Icecek A.S. | 2,848 | 72,808 |
| Emlak Konut Gayrimenkul Yatirim Ortakligi A.S. (a) | 17,380 | 23,553 |
Enka İnşaat ve Sanayi A.Ş. | 12,620 | 37,587 |
| Eregli Demir ve Celik Fabrikalari T.A.S. | 58,645 | 74,525 |
| Ford Otomotiv Sanayi A.S. | 4,237 | 58,470 |
| Haci Omer Sabanci Holding A.S. | 5,233 | 25,353 |
| Koç Holding A.S. | 7,172 | 33,181 |
| Koza Altin Isletmeleri A.S. | 4,533 | 72,231 |
| TAV Havalimanlari Holding A.S. | 6,269 | 44,345 |
| Tofas Turk Otomobil Fabrikasi A.S. | 6,520 | 39,809 |
| Tupras—Turkiye Petrol Rafinerileri A.S. | 5,015 | 106,300 |
| Turk Hava Yollari A.O. | 10,530 | 40,249 |
| Turk Telekomunikasyon A.S. | 28,389 | 98,928 |
| Turkiye Sise ve Cam Fabrikalari A.S. | 25,703 | 35,470 |
| Turkcell Iletisim Hizmetleri A.S. (a)(c) | 7,788 | 114,873 |
| Turkiye Garanti Bankasi A.S. | 5,900 | 23,313 |
| Turkiye Halk Bankasi A.S. | 3,007 | 22,092 |
| Turkiye Is Bankasi A.S. | 8,933 | 23,680 |
| Turkiye Vakiflar Bankasi T-d | 8,740 | 20,001 |
| Yapi ve Kredi Bankasi A.S. | 11,167 | 24,945 |
| 1,199,011 | ||
| TOTAL COMMON STOCK | ||
| (Cost $20,260,864) | 20,779,059 | |
| Preferred Stock—2.2% | ||
| BRAZIL—1.0% | ||
| AES Tiete S.A. | 2,800 | 27,106 |
| Centrais Eletricas Brasileiras S.A. | 3,900 | 18,385 |
| Itausa-Investimentos Itau S.A. | 5,800 | 23,504 |
| Lojas Americanas S.A. | 3,400 | 24,923 |
| Marcopolo S.A. | 7,200 | 21,396 |
| Metalurgica Gerdau S.A. | 3,500 | 33,346 |
| Oi S.A. | 16,100 | 31,026 |
| Petróleo Brasileiro S.A. | 3,000 | 24,800 |
| Usiminas Usi Sd Mg (a) | 4,500 | 21,315 |
| Vale S.A., Class A | 2,000 | 28,402 |
| 254,203 | ||
| COLOMBIA—0.6% | ||
| Banco Davivienda S.A. | 6,282 | 83,265 |
| Grupo Aval Acciones y Valores S.A. | 96,196 | 69,995 |
| 153,260 | ||
| RUSSIA—0.4% | ||
| Sberbank (a) | 30,910 | 71,364 |
| Surgutneftegas OAO | 44,000 | 31,818 |
| 103,182 | ||
| SOUTH KOREA—0.2% | ||
| LG Chem Ltd. | 149 | 19,410 |
| Samsung Electronics Co. Ltd. | 27 | 22,008 |
| 41,418 | ||
| TOTAL PREFERRED STOCK | ||
| (Cost $521,686) | 552,063 | |
| Rights—0.0% | ||
| SOUTH KOREA—0.0% | ||
| Korea Gas Corporation (a) | 143 | 1,297 |
| Exchange Traded Funds—7.0% | ||
| United States—7.0% | ||
| iShares MSCI Emerging Markets Index Fund | 18,700 | 762,399 |
| Vanguard FTSE Emerging Markets ETF | 23,625 | 947,599 |
| (Cost $1,684,332) | 1,709,998 | |
| Exchange Traded Notes—4.8% | ||
| United Kingdom—4.8% | ||
iPath MSCI India Index ETN (a) (Cost $1,191,980) | 22,785 | 1,153,149 |
| Short Term Investments—0.0% | ||
| Par Value | Value | |
State Street Bank & Trust Co., Repurchase Agreement .0%, 10/01/13, (Dated 09/30/13), Collateralized by $20,000 par U.S. Treasury Note-.25% due 03/31/2014, Market Value $20,017.96, Repurchase Proceeds $16,934 (Cost $16,934) | $16,934 | $16,934 |
| TOTAL INVESTMENTS (EXCLUDING INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED) | ||
| (Cost $23,675,796) | 24,212,501 | |
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED—0.9% | ||
| Money Market—0.9% | ||
Western Asset Institutional Cash Reserves—Inst. (Cost $227,202) | 227,202 | 227,202 |
TOTAL INVESTMENTS—100.6% (Cost $23,902,998) | 24,439,702 | |
| OTHER ASSETS & LIABILITIES (Net)—(0.6%) | (166,477) | |
| NET ASSETS—100% | $24,273,225 |
| (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 |
| The percentage of each investment category is calculated as a percentage of net assets. |
SECTOR ALLOCATIONS (as a percentage of Total Net Assets) | |
| Financials | 15.9% |
| Telecommunication Services | 12.9% |
| Consumer Staples | 10.7% |
| Materials | 9.4% |
| Consumer Discretionary | 8.8% |
| Industrials | 8.0% |
| Energy | 8.0% |
| Utilities | 7.2% |
| Health Care | 4.7% |
| Information Technology | 2.3% |
| Exchange Traded Funds | 7.0% |
| Exchange Traded Notes | 4.8% |
| Cash and Other Assets (Net) | 0.3% |
The accompanying notes are an integral part of these financial statements.
PEAR TREE POLARIS FOREIGN VALUE FUND
SCHEDULE OF INVESTMENTS
September 30, 2013 (Unaudited)
Common Stock—93.7%
| Shares | Value | |
| AUSTRALIA—2.5% | ||
| BHP Billiton plc (b) | 457,400 | $ 26,922,564 |
| BELGIUM—2.1% | ||
| Solvay S.A. | 154,547 | 23,186,662 |
| CANADA—2.5% | ||
| Methanex Corporation | 535,307 | 27,498,836 |
| FINLAND—6.0% | ||
| Caverion Corporation (a) | 840,216 | 6,823,138 |
| Kone OYJ, Class B | 281,900 | 25,162,387 |
| Konecranes OYJ | 643,780 | 21,687,242 |
| YIT OYJ | 840,216 | 11,701,682 |
| 65,374,449 | ||
| FRANCE—7.3% | ||
| Christian Dior S.A. | 132,273 | 25,949,642 |
| Imerys S.A. | 327,883 | 22,903,124 |
| Ipsos | 281,808 | 10,595,648 |
| Maurel et Prom | 1,227,806 | 18,852,815 |
| Transgene S.A. (a) | 142,827 | 1,933,091 |
| 80,234,320 | ||
| GERMANY—16.2% | ||
| BASF SE | 243,200 | 23,337,362 |
| Deutsche Telekom AG | 2,148,676 | 31,160,547 |
| Freenet AG | 1,000,639 | 24,221,907 |
| Hannover Ruck SE | 304,200 | 22,381,058 |
| Muenchener Rueckvers AG | 120,130 | 23,486,104 |
| Symrise AG | 556,950 | 24,683,297 |
| Wincor Nixdorf AG | 448,050 | 27,992,020 |
| 177,262,295 | ||
| HONG KONG—1.6% | ||
| Guangdong Investment Limited | 20,977,800 | 17,988,004 |
| INDIA—2.2% | ||
| Infosys Technologies Ltd. (b) | 498,045 | 23,960,945 |
| IRELAND—4.4% | ||
| CRH plc | 1,021,493 | 24,408,724 |
| Greencore Group plc | 10,041,423 | 23,961,410 |
| 48,370,134 | ||
| ISRAEL—2.2% | ||
| Teva Pharmaceuticals SP (b) | 649,419 | 24,535,050 |
| ITALY—4.1% | ||
| GTECH SpA | 893,165 | $25,555,162 |
| Trevi Finanziaria SpA | 2,331,526 | 19,422,730 |
| 44,977,892 | ||
| JAPAN—9.4% | ||
| Asahi Group Holdings Ltd. | 925,700 | 24,282,971 |
| KDDI Corporation | 543,200 | 27,846,493 |
| Meiji Holdings Co., Ltd. | 449,100 | 24,530,001 |
| Showa Denko K.K. | 19,395,000 | 26,237,451 |
| 102,896,916 | ||
| NORWAY—2.2% | ||
| DnB Bank ASA | 1,568,092 | 23,817,072 |
| SOUTH AFRICA—2.1% | ||
| Sasol Ltd. | 486,935 | 23,212,261 |
| SOUTH KOREA—2.7% | ||
| Samsung Electronics Company Ltd. | 23,285 | 29,618,810 |
| SWEDEN—6.3% | ||
| Duni AB | 1,179,500 | 12,510,880 |
| Investor AB, Class B | 800,556 | 24,350,468 |
| Loomis AB-B | 328,900 | 7,259,410 |
| Svenska Handelsbanken AB, Class A | 578,500 | 24,806,135 |
| 68,926,893 | ||
| SWITZERLAND—2.2% | ||
| Novartis AG | 309,750 | 23,809,794 |
| THAILAND—2.4% | ||
| Thai Oil PCL | 14,045,800 | 25,931,744 |
| UNITED KINGDOM—15.3% | ||
| Barratt Developments plc | 5,339,856 | 26,659,412 |
| BBA Aviation plc | 2,917,438 | 14,395,494 |
| Bellway plc | 1,081,706 | 23,012,303 |
| Persimmon plc | 1,385,173 | 24,336,546 |
| Rexam plc | 3,126,268 | 24,357,784 |
| Standard Chartered PLC | 1,091,747 | 26,157,857 |
| Taylor Wimpey plc | 17,895,270 | 29,066,790 |
| 167,986,186 | ||
TOTAL COMMON STOCK (Cost $849,874,211) | 1,026,510,827 |
Short Term Investments—7.7%
| Par Value | Value | |
| Money Market—7.7% | ||
State Street Global Advisors FDS (Cost $84,689,028) | $84,689,028 | $84,689,028 |
TOTAL INVESTMENTS—101.4% (Cost $934,563,239) | $1,111,199,855 | |
| OTHER ASSETS & LIABILITIES (NET)—(1.4%) | (15,467,625) | |
| NET ASSETS—100% | $1,095,732,230 |
| (a) | Non-income producing security |
| (b) | ADR—American Depository Receipts |
| The percentage of each investment category is calculated as a percentage of net assets. |
SECTOR ALLOCATIONS (as a percentage of Total Net Assets) | |
| Materials | 20.4% |
| Consumer Discretionary | 16.2% |
| Financials | 13.2% |
| Industrials | 9.7% |
| Telecommunication Services | 7.6% |
| Information Technology | 7.5% |
| Consumer Staples | 6.7% |
| Energy | 6.2% |
| Health Care | 4.6% |
| Utilities | 1.6% |
| Cash and Other Assets (Net) | 6.3% |
PEAR TREE POLARIS FOREIGN VALUE SMALL CAP FUND
SCHEDULE OF INVESTMENTS
September 30, 2013 (Unaudited)
Common Stock—90.8%
| Shares | Value | |
| AUSTRALIA—0.3% | ||
| Austal Limited | 552,530 | $ 412,917 |
| AUSTRIA—1.4% | ||
| Semperit AG Holding | 37,800 | 1,739,453 |
| BELGIUM—1.9% | ||
| Kinepolis Group | 15,900 | 2,277,660 |
| BRAZIL—2.3% | ||
| Equatorial Energia SA | 296,237 | 2,801,043 |
| CHINA—2.9% | ||
| China Hongxing Sports Limited* (a) | 10,258,400 | 81,747 |
| Shanghai Mechanical & Electrical Industry Co. Ltd., Class B | 1,455,568 | 1,934,450 |
| Xinhua Winshare Publishing and Media Co., Ltd. | 2,701,500 | 1,487,422 |
| 3,503,619 | ||
| FINLAND—1.8% | ||
| PKC Group OYJ | 68,800 | 2,231,091 |
| FRANCE—2.6% | ||
| Bonduelle SCA | 55,600 | 1,353,780 |
| Ipsos | 46,500 | 1,748,345 |
| 3,102,125 | ||
| GERMANY—4.9% | ||
| Freenet AG | 127,700 | 3,091,162 |
| QSC AG | 323,280 | 1,749,297 |
| Sixt SE | 45,581 | 1,149,314 |
| 5,989,773 | ||
| HONG KONG—5.3% | ||
| Samson Holding Ltd. | 10,475,800 | 1,391,316 |
| Texwinca Holdings Limited | 1,720,300 | 1,603,776 |
| VST Holdings Ltd. | 9,507,360 | 1,985,987 |
| VTech Holdings Limited | 115,700 | 1,494,867 |
| 6,475,946 | ||
| INDIA—3.8% | ||
| Hexaware Technologies Limited | 1,006,000 | 2,064,867 |
| KRBL Ltd. | 1,475,200 | 574,952 |
| LIC Housing Finance Ltd. | 435,600 | 1,310,174 |
| NIIT Technologies Ltd. | 83,400 | 371,007 |
| South Indian Bank Ltd. | 553,320 | 174,998 |
| Usha Martin Group Ltd. | 323,760 | 110,670 |
| 4,606,668 | ||
| IRELAND—9.1% | ||
| Glanbia plc | 189,900 | $ 2,488,211 |
| Greencore Group plc | 1,416,344 | 3,379,760 |
| IFG Group plc | 829,985 | 1,516,512 |
| UDG Healthcare plc | 709,987 | 3,675,577 |
| 11,060,060 | ||
| ITALY—3.1% | ||
| De’Longhi SpA | 118,910 | 1,820,216 |
| Trevi Finanziaria SpA | 233,100 | 1,941,835 |
| 3,762,051 | ||
| JAPAN—10.4% | ||
| BML, Inc. | 98,700 | 3,227,590 |
| Chugoku Marine Paints Ltd. | 445,600 | 2,769,278 |
| Daicel Corporation | 312,500 | 2,813,024 |
| DaiichiKosho Co., Ltd. | 83,600 | 2,278,029 |
| Unipres Corporation | 73,900 | 1,562,713 |
| 12,650,634 | ||
| NORWAY—6.2% | ||
| ABG Sundal Collier Holding ASA | 2,459,000 | 1,824,481 |
| SpareBank 1 Nord-Norge | 376,397 | 1,934,863 |
| SpareBank 1 SMN | 247,265 | 1,879,857 |
| SpareBank 1 SR-Bank ASA | 243,300 | 1,930,663 |
| 7,569,864 | ||
| PHILIPPINES—2.2% | ||
| Manila Water Company, Inc. | 4,081,170 | 2,647,980 |
| SINGAPORE—3.8% | ||
| Breadtalk Group Ltd. | 2,815,100 | 2,018,958 |
| M1 Ltd. | 987,300 | 2,580,559 |
| 4,599,517 | ||
| SOUTH AFRICA—1.0% | ||
| Clicks Group Limited | 232,300 | 1,265,924 |
| SWEDEN—4.6% | ||
| Duni AB | 156,400 | 1,658,925 |
| Loomis AB | 82,300 | 1,816,508 |
| Nolato AB | 129,700 | 2,164,735 |
| 5,640,168 | ||
| SWITZERLAND—1.8% | ||
| Vetropack Holding AG | 1,086 | 2,198,064 |
| TAIWAN—1.5% | ||
| Holtek Semiconductor, Inc. | 1,508,600 | $1,834,280 |
| THAILAND—4.0% | ||
| Hana Microelectronics PCL | 2,059,080 | 1,520,612 |
| Ratchaburi Electricity Generating Holding PCL | 1,220,000 | 1,950,128 |
| Thai Union Frozen Products PCL | 821,274 | 1,339,034 |
| 4,809,774 | ||
| UNITED KINGDOM—15.9% | ||
| Alternative Networks plc | 488,200 | 2,645,865 |
| BBA Aviation plc | 419,011 | 2,067,523 |
| Character Group plc | 496,900 | 1,165,634 |
| Clarkson plc | 64,500 | 2,347,834 |
| Galliford Try plc | 193,828 | 3,261,181 |
| Halfords Group plc | 273,131 | 1,739,207 |
| The Restaurant Group plc | 250,600 | 2,156,839 |
| Vitec Group plc | 154,961 | 1,708,494 |
| Wetherspoon (J.D.) plc | 196,400 | 2,321,062 |
| 19,413,639 | ||
TOTAL COMMON STOCK (Cost $80,706,488) | 110,592,250 | |
| Preferred Stock—1.8% | ||
| GERMANY—1.8% | ||
Dräegerwerk AG (Cost $821,879) | 16,900 | 2,155,808 |
| P-Notes—2.9% | ||
| India—2.9% | ||
| KRBL Limited | 1,679,000 | 654,306 |
| LIC Housing Finance | 204,200 | 614,172 |
| NIIT Technologies | 276,900 | 1,231,790 |
| South Indian Bank | 2,535,250 | 801,900 |
| Usha Martin Group | 807,100 | 275,867 |
| (Cost $2,692,091) | 3,578,035 |
| Short Term Investments—6.2% | ||
| Par Value | Value | |
| Money Market—6.2% | ||
State Street Global Advisors FDS (Cost $7,511,914) | $7,511,914 | $7,511,914 |
TOTAL INVESTMENTS—101.7% (Cost $91,732,372) | 123,838,007 | |
| OTHER ASSETS & LIABILITIES (NET)—(1.7%) | (2,020,500) | |
| NET ASSETS—100% | $121,817,507 |
| * | Fair valued by Valuation Committee as delegated by Pear Tree Funds Board of Trustees that represent 0.07% of net assets as of September 30, 2013. |
| (a) | Non-income producing security |
| 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 | 21.6% |
| Industrials | 15.5% |
| Information Technology | 10.4% |
| Financials | 9.8% |
| Consumer Staples | 9.7% |
| Telecommunication Services | 8.3% |
| Health Care | 7.4% |
| Materials | 6.7% |
| Utilities | 6.1% |
| Cash and Other Assets (Net) | 4.5% |
The accompanying notes are an integral part of these financial statements.
PEAR TREE FUNDS
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2013 (Unaudited)
| Small Cap | Quality | |
| Assets: | ||
| Investments at value (Includes collateral from securities on loan of $7,215,449; $1,060,214; $7,149,823; $227,202; $0; $0, respectively)* (Note 2) | $128,421,857 | $110,622,239 |
| Repurchase agreements/commercial paper | 2,087,920 | 726,159 |
| Foreign currency at value (Cost $1,732 for Quality, $408,201 for Emerging Markets, $74,557 for Risk Parity, $326,691 for Foreign Value, and $19,624 for Foreign Value Small Cap) | — | 1,737 |
| Cash | — | — |
| Dividend, interest and foreign tax reclaims receivable | 84,444 | 176,667 |
| Receivable for investments sold | 718,508 | 62,758 |
| Receivable for shares of beneficial interest sold | 13,751 | — |
| Other Assets | 13,863 | 7,527 |
| Total Assets | $131,340,343 | $111,597,087 |
| Liabilities: | ||
| Payable for investments purchased | $1,369,392 | 18,094 |
| Payable for shares of beneficial interest repurchased | 53,410 | — |
| Payable for compensation of manager (Note 3) | 99,239 | 61,651 |
| Payable for distribution fees (Note 3) | 23,007 | 21,311 |
| Payable to custodian | 2,475 | 2,601 |
| Payable to transfer agent (Note 3) | 18,071 | 16,555 |
| Payable for collateral received for securities loaned | 7,215,449 | 1,060,214 |
| Payable for Foreign Capital Gain Tax | — | — |
| Other accrued expenses and liabilities | 15,341 | 2,537 |
| Total Liabilities | $8,796,384 | $1,182,963 |
| Net Assets | $122,543,959 | $110,414,124 |
| * | Includes securities on loan to brokers with market value of $7,059,795; $1,038,292; $6,686,621; $218,996; $0; $0, respectively. |
Emerging Markets | Risk Parity | Foreign Value | Foreign Value Small Cap |
| $150,609,619 | $24,422,768 | $1,111,199,855 | $123,838,007 |
| 1,110,748 | 16,934 | — | — |
| 410,334 | 74,275 | 344,876 | 19,826 |
| — | 44,148 | 61,963 | — |
| 195,584 | 22,740 | 2,581,800 | 341,192 |
| 212,204 | 18,213 | — | — |
| — | — | 1,466,601 | 83,262 |
| 7,683 | 3,124 | 22,387 | 982 |
| $152,546,172 | $24,602,202 | $1,115,677,482 | $124,283,269 |
| $78,151 | $76,734 | $17,934,702 | $2,187,653 |
| 84,423 | — | 730,061 | 20,951 |
| 99,075 | 11,359 | 879,110 | 98,199 |
| 26,570 | 3 | 178,260 | 19,414 |
| 24,760 | 10,608 | 21,738 | 5,954 |
| 21,553 | 3,071 | 151,962 | 17,629 |
| 7,149,823 | 227,202 | — | — |
| — | — | — | 115,962 |
| 7,326 | — | 49,419 | — |
| $7,491,681 | $328,977 | $19,945,252 | $2,465,762 |
| $145,054,491 | $24,273,225 | $1,095,732,230 | $121,817,507 |
The accompanying notes are an integral part of these financial statements.
| Small Cap | Quality | |
| Net Assets Consist Of: | ||
| Shares of beneficial interest | $92,854,594 | $96,644,960 |
| Undistributed net investment income/(loss) | (266,019) | 954,099 |
| Accumulated net realized gain/(loss) on investments and foreign denominated assets, liabilities and currency | (5,666,343) | (2,228,434) |
| Unrealized appreciation/(depreciation) of investments and foreign denominated assets, liabilities and currency | 35,621,727 | 15,043,499 |
| Net Assets | $122,543,959 | $110,414,124 |
| Investments at cost | $94,888,050 | $96,304,904 |
| Net assets | ||
| Ordinary Shares | $113,610,331 | $102,137,295 |
| Institutional Shares | $8,933,628 | $8,276,829 |
| Shares of beneficial interest outstanding (unlimited number of shares authorized) | ||
| Ordinary Shares | 4,432,181 | 6,239,631 |
| Institutional Shares | 307,273 | 482,616 |
| Net asset value and offering price per share | ||
| Ordinary Shares | $25.63 | $16.37 |
| Institutional Shares | $29.07 | $17.15 |
Emerging Markets | Risk Parity | Foreign Value | Foreign Value Small Cap |
| $160,346,968 | $23,640,858 | $1,150,270,687 | $90,297,938 |
| 3,875,092 | 33,058 | 15,865,232 | 2,876,744 |
| (24,673,628) | 62,836 | (246,982,280) | (3,459,799) |
| 5,506,059 | 536,473 | 176,578,591 | 32,102,624 |
| $145,054,491 | $24,273,225 | $1,095,732,230 | $121,817,507 |
| $146,215,765 | $23,902,998 | $934,756,239 | $91,732,372 |
| $130,766,569 | $16,330 | $887,047,003 | $96,125,919 |
| $14,287,922 | $24,256,895 | $208,685,227 | $25,691,588 |
| 5,851,316 | 1,581 | 51,756,971 | 8,694,358 |
| 629,905 | 2,347,543 | 12,165,478 | 2,317,677 |
| $22.35 | $10.33 | $17.14 | $11.06 |
| $22.68 | $10.33 | $17.15 | $11.09 |
The accompanying notes are an integral part of these financial statements.
PEAR TREE FUNDS
STATEMENT OF OPERATIONS
6 Months Ended September 30, 2013 (Unaudited)
| Small Cap | Quality | |
| Investment Income: | ||
| Dividends* | $716,930 | $1,319,756 |
| Interest | 74 | 28 |
| Sec Lending Income | 211,762 | 1,074 |
| Miscellaneous | 10,794 | 1,600 |
| Total Investment Income | $939,560 | $1,322,458 |
| Expenses: | ||
| Compensation of manager (Note 3) | 575,995 | 541,456 |
| Distribution fees, Ordinary Shares (Note 3) | 133,539 | 128,102 |
| Administrative Fees (Note 3) | 16,589 | 15,630 |
| Custodian and fund accounting fees | 18,000 | 17,500 |
| Regulatory and Compliance (Note 3) | 7,583 | 7,149 |
| Transfer agent fees (Note 3): | ||
| Ordinary Shares | 87,596 | 84,065 |
| Institutional Shares | 6,824 | 4,716 |
| Audit and legal | 1,478 | 7,526 |
| Registration fees | 15,792 | 12,354 |
| Compensation of trustees (Note 3) | 5,254 | 4,954 |
| Printing | 3,917 | 3,693 |
| Miscellaneous | — | — |
| Total expenses before waivers/reimbursements/ reductions | 872,567 | 827,145 |
| Waivers and/or reimbursements of expenses (Note 3) | — | (137,197) |
| Fees reduced by credits allowed by custodian (Note 3) | — | — |
| Expenses, Net | $872,567 | $689,948 |
| Net investment income/(loss) | $66,993 | $632,510 |
| Realized and unrealized gain/(loss) on investments, foreign currency, and foreign translation: | ||
| Net realized gain/(loss) (Note 2) on: | ||
| Investments | $5,646,175 | $2,765,204 |
| Foreign denominated assets, liabilities, and currency | — | 59 |
| Change in unrealized appreciation/(depreciation) of: | ||
| Investments | 9,477,829 | (101,881) |
| Foreign denominated assets, liabilities, and currency | — | — |
| Net realized and unrealized gain/(loss) on investment and foreign currency | 15,124,004 | 2,663,382 |
| Net increase/(decrease) in net assets resulting from operations | $15,190,997 | $3,295,892 |
| * | Dividends are net of withholding taxes of $4,035 for Small Cap, and $33,428 for Quality, net of foreign withholding taxes of $424,764 for Emerging Markets, $17,395 for Risk Parity, $1,586,923 for Foreign Value, and $168,112 for Foreign Value Small Cap. |
Emerging Markets | Risk Parity | Foreign Value | Foreign Value Small Cap |
| $3,282,624 | $127,639 | $17,057,751 | $2,586,418 |
| 15 | — | 10,207 | 181 |
| 13,979 | 338 | — | — |
| 37 | — | — | — |
| $3,296,655 | $127,977 | $17,067,958 | $2,586,599 |
| 671,925 | 32,961 | 4,907,822 | 583,739 |
| 163,826 | 9 | 989,435 | 116,073 |
| 21,422 | 1,393 | 139,040 | 16,921 |
| 120,000 | 39,000 | 189,000 | 40,700 |
| 9,939 | 452 | 63,487 | 7,787 |
| 107,316 | 5 | 645,810 | 75,923 |
| 11,643 | 8,828 | 154,932 | 19,487 |
| 18,941 | 10,342 | 84,623 | 11,603 |
| 16,529 | 938 | 26,270 | 15,905 |
| 6,888 | 313 | 43,993 | 5,396 |
| 5,135 | 233 | 32,798 | 4,023 |
| 89,346 | 445 | 39,247 | 7,078 |
| 1,242,910 | 94,919 | 7,316,457 | 904,635 |
| — | — | — | — |
| — | — | — | — |
| $1,242,910 | $94,919 | $7,316,457 | $904,635 |
| $2,053,745 | $33,058 | $9,751,501 | $1,681,964 |
| $6,322,680 | $72,304 | $(4,428,371) | $(1,965,570) |
| (114,272) | (9,469) | 35,801 | 6,328 |
| (16,281,790) | 536,705 | 72,965,210 | 6,452,276 |
| 9,527 | (231) | 8,191 | (1,734) |
| (10,063,855) | 599,309 | 68,580,831 | 4,491,300 |
| $(8,010,110) | $632,367 | $78,332,332 | $6,173,264 |
The accompanying notes are an integral part of these financial statements.
PEAR TREE FUNDS
STATEMENT OF CHANGES IN NET ASSETS
| Small Cap | ||
Semi-Annual Ended September 30, 2013 (Unaudited) | Year Ended March 31, 2013 | |
| Increase (Decrease) in Net Assets: | ||
| Operations: | ||
| Net investment income/(loss) | $66,993 | $(141,047) |
| Net realized gain/(loss) on investments | ||
| Foreign denominated assets, liabilities, and currency | 5,646,175 | 10,316,847 |
| Unrealized appreciation/(depreciation) of investments, foreign denominated assets, liabilities, and currency | 9,477,829 | 180,132 |
| Net increase/(decrease) from operations | $15,190,997 | $10,355,932 |
| Distributions to shareholders from: | ||
| Net investment income | ||
| Ordinary shares | $— | $— |
| Institutional shares | — | — |
| Net realized gains | ||
| Ordinary shares | — | — |
| Institutional shares | — | — |
| Total distributions | $— | $— |
| Fund share transactions (Note 8) | (1,922,554) | (3,191,522) |
| Contributions to capital from investment manager/brokers | — | — |
| Increase/(decrease) in net assets | $13,268,443 | $7,164,410 |
| Net assets beginning of period | 109,275,516 | 102,111,106 |
| Net assets end of period* | $122,543,959 | $109,275,516 |
| *Includes undistributed net investment income/(loss) of: | $(266,019) | $(333,012) |
The accompanying notes are an integral part of these financial statements.
PEAR TREE FUNDS
STATEMENT OF CHANGES IN NET ASSETS (continued)
| Quality | ||
Semi-Annual Ended September 30, 2013 (Unaudited) | Year Ended March 31, 2013 | |
| Increase (Decrease) in Net Assets: | ||
| Operations: | ||
| Net investment income/(loss) | $632,510 | $1,066,015 |
Net realized gain/(loss) on investments Foreign denominated assets, liabilities, and currency | 2,765,263 | 4,533,151 |
| Unrealized appreciation/(depreciation) of investments, foreign denominated assets, liabilities, and currency | (101,881) | 4,956,354 |
| Net increase/(decrease) from operations | $3,295,892 | $10,555,520 |
| Distributions to shareholders from: | ||
| Net investment income | ||
| Ordinary shares | $— | $(1,005,173) |
| Institutional shares | — | (35,923) |
| Net realized gains | ||
| Ordinary shares | — | — |
| Institutional shares | — | — |
| Total distributions | $— | $(1,041,096) |
| Fund share transactions (Note 8) | 5,509,341 | (3,020,891) |
Contributions to capital from investment manager/brokers | — | — |
| Increase/(decrease) in net assets | $8,805,233 | $6,493,533 |
| Net assets beginning of period | 101,608,891 | 95,115,358 |
| Net assets end of period* | $110,414,124 | $101,608,891 |
| *Includes undistributed net investment income/(loss) of: | $954,099 | $321,529 |
PEAR TREE FUNDS
STATEMENT OF CHANGES IN NET ASSETS (continued)
| Emerging Markets | ||
Semi-Annual Ended September 30, 2013 (Unaudited) | Year Ended March 31, 2013 | |
| Increase (Decrease) in Net Assets: | ||
| Operations: | ||
| Net investment income/(loss) | $2,053,745 | $2,580,085 |
Net realized gain/(loss) on investments Foreign denominated assets, liabilities, and currency | 6,208,408 | (4,307,016) |
| Unrealized appreciation/(depreciation) of investments, foreign denominated assets, liabilities, and currency | (16,272,263) | 9,498,471 |
| Net increase/(decrease) from operations | $(8,010,110) | $7,771,540 |
| Distributions to shareholders from: | ||
| Net investment income | ||
| Ordinary shares | $— | $(1,974,284) |
| Institutional shares | — | (244,086) |
| Net realized gains | ||
| Ordinary shares | — | — |
| Institutional shares | — | — |
| Total distributions | $— | $(2,218,370) |
| Fund share transactions (Note 8) | (2,367,610) | (10,891,444) |
| Contributions to capital from investment manager/brokers | 136 | 272 |
| Increase/(decrease) in net assets | $(10,377,584) | $(5,338,002) |
| Net assets beginning of period | 155,432,075 | 160,770,077 |
| Net assets end of period* | $145,054,491 | $155,432,075 |
| *Includes undistributed net investment income/(loss) of: | $3,875,092 | $1,821,344 |
PEAR TREE FUNDS
STATEMENT OF CHANGES IN NET ASSETS (continued)
| Risk Parity | ||
Period Ended September 30, 2013 (Unaudited) | Year Ended March 31, 2013 | |
| Increase (Decrease) in Net Assets: | ||
| Operations: | ||
| Net investment income/(loss) | $33,058 | $ — |
| Net realized gain/(loss) on investments | ||
| Foreign denominated assets, liabilities, and currency | 62,835 | — |
| Unrealized appreciation/(depreciation) of investments, foreign denominated assets, liabilities, and currency | 536,474 | — |
| Net increase/(decrease) from operations | $632,367 | $— |
| Distributions to shareholders from: | ||
| Net investment income | ||
| Ordinary shares | $— | $— |
| Institutional shares | — | — |
| Net realized gains | ||
| Ordinary shares | — | — |
| Institutional shares | — | — |
| Total distributions | $— | $— |
| Fund share transactions (Note 8) | 23,640,858 | — |
| Contributions to capital from investment manager/brokers | — | — |
| Increase/(decrease) in net assets | $24,273,225 | $— |
| Net assets beginning of period | — | — |
| Net assets end of period* | $24,273,225 | $— |
| *Includes undistributed net investment income/(loss) of: | $33,058 | $— |
The accompanying notes are an integral part of these financial statements.
PEAR TREE FUNDS
STATEMENT OF CHANGES IN NET ASSETS (continued)
| Foreign Value | ||
Semi-Annual Ended September 30, 2013 (Unaudited) | Year Ended March 31, 2013 | |
| Increase (Decrease) in Net Assets: | ||
| Operations: | ||
| Net investment income/(loss) | $9,751,501 | $6,538,258 |
| Net realized gain/(loss) on investments | ||
| Foreign denominated assets, liabilities, and currency | (4,392,570) | 19,539,318 |
| Unrealized appreciation/(depreciation) of investments, foreign denominated assets, liabilities, and currency | 72,973,401 | 83,694,217 |
| Net increase/(decrease) from operations | $78,332,332 | $109,771,793 |
| Distributions to shareholders from: | ||
| Net investment income | ||
| Ordinary shares | $— | $(2,944,067) |
| Institutional shares | — | (1,288,826) |
| Net realized gains | ||
| Ordinary shares | — | — |
| Institutional shares | — | — |
| Total distributions | $— | $(4,232,893) |
| Fund share transactions (Note 8) | 131,925,157 | 295,815,079 |
| Contributions to capital from investment manager/brokers | 141 | 1,021 |
| Increase/(decrease) in net assets | $210,257,630 | $401,355,000 |
| Net assets beginning of period | 885,474,600 | 484,119,600 |
| Net assets end of period* | $1,095,732,230 | $885,474,600 |
| *Includes undistributed net investment income/(loss) of: | $15,865,232 | $6,113,730 |
The accompanying notes are an integral part of these financial statements.
PEAR TREE FUNDS
STATEMENT OF CHANGES IN NET ASSETS (continued)
Foreign Value Small Cap | ||
Semi-Annual Ended September 30, 2013 (Unaudited) | Year Ended March 31, 2013 | |
| Increase (Decrease) in Net Assets: | ||
| Operations: | ||
| Net investment income/(loss) | $1,681,964 | $1,557,296 |
| Net realized gain/(loss) on investments | ||
| Foreign denominated assets, liabilities, and currency | (1,959,242) | 1,232,152 |
| Unrealized appreciation/(depreciation) of investments, foreign denominated assets, liabilities, and currency | 6,450,542 | 14,366,873 |
| Net increase/(decrease) from operations | $6,173,264 | $17,156,321 |
| Distributions to shareholders from: | ||
| Net investment income | ||
| Ordinary shares | $— | $(1,309,405) |
| Institutional shares | — | (367,559) |
| Net realized gains | ||
| Ordinary shares | — | — |
| Institutional shares | — | — |
| Total distributions | $— | $(1,676,964) |
| Fund share transactions (Note 8) | 378,882 | 6,481,643 |
| Contributions to capital from investment manager/brokers | — | — |
| Increase/(decrease) in net assets | $6,552,146 | $21,961,000 |
| Net assets beginning of period | 115,265,361 | 93,304,361 |
| Net assets end of period* | $121,817,507 | $115,265,361 |
| *Includes undistributed net investment income/(loss) of: | $2,876,744 | $1,194,780 |
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 | ||||||
For the six months ended September 30, | Years Ended March 31, | |||||
| 2013 | 2013 | 2012 | 2011 | 2010 | 2009 | |
| (unaudited) | ||||||
| Net Asset Value, Beginning of Period | $22.50 | $20.36 | $19.92 | $16.45 | $10.22 | $19.45 |
| Income from Investment Operations: | ||||||
| Net investment income (loss) (a)(b) | 0.01 | (0.03) | (0.08) | 0.04 | 0.11 | 0.06 |
| Net realized and unrealized gain/(loss) on securities | 3.12 | 2.17 | 0.57 | 3.52 | 6.15 | (9.23) |
| Total from Investment Operations | 3.13 | 2.14 | 0.49 | 3.56 | 6.26 | (9.17) |
| Less Distributions: | ||||||
| Dividends from net investment income | — | — | (0.05) | (0.09) | (0.03) | — |
| Distributions from realized capital gains | — | — | — | — | — | (0.06) |
| Total Distributions | — | — | (0.05) | (0.09) | (0.03) | (0.06) |
| Net Asset Value, End of Period | $25.63 | $22.50 | $20.36 | $19.92 | $16.45 | $10.22 |
| Total Return | 13.91% | 10.51% | 2.48% | 21.69% | 61.27% | (47.11)%(c) |
| Net Assets, End of Period (000’s) | $113,610 | $101,275 | $95,870 | $113,675 | $99,444 | $61,943 |
| Ratios and Supplemental Data: | ||||||
| Ratios of expenses to average net assets: (d) | ||||||
| Gross | 1.51% | 1.63% | 1.67% | 1.64% | 1.65% | 1.64% |
| Net | 1.51% | 1.63% | 1.67% | 1.64% | 1.65% | 1.64% |
| Ratio of net investment income (loss) to average net assets (b) | 0.10% | (0.16)% | (0.44)% | 0.23% | 0.81% | 0.31% |
| Portfolio Turnover | 35% | 54% | 53% | 71% | 50% | 72% |
The accompanying notes are an integral part of these financial statements.
| Instutional Shares | ||||||
For the six months ended September 30, | Years Ended March 31, | |||||
| 2013 | 2013 | 2012 | 2011 | 2010 | 2009 | |
| (unaudited) | ||||||
| Net Asset Value, Beginning of Period | $25.48 | $23.00 | $22.50 | $18.56 | $11.51 | $21.86 |
| Income from Investment Operations: | ||||||
| Net investment income (loss) (a)(b) | 0.05 | 0.02 | (0.04) | 0.09 | 0.20 | 0.10 |
| Net realized and unrealized gain/(loss) on securities | 3.54 | 2.46 | 0.63 | 3.98 | 6.91 | (10.39) |
| Total from Investment Operations | 3.59 | 2.48 | 0.59 | 4.07 | 7.11 | (10.29) |
| Less Distributions: | ||||||
| Dividends from net investment income | — | — | (0.09) | (0.13) | (0.06) | — |
| Distributions from realized capital gains | — | — | — | — | — | (0.06) |
| Total Distributions | — | — | (0.09) | (0.13) | (0.06) | (0.06) |
| Net Asset Value, End of Period | $29.07 | $25.48 | $23.00 | $22.50 | $18.56 | $11.51 |
| Total Return | 14.09% | 10.78% | 2.69% | 21.98% | 61.83% | (47.04)%(c) |
| Net Assets, End of Period (000’s) | $8,934 | $8,000 | $6,242 | $7,806 | $7,146 | $7,281 |
| Ratios and Supplemental Data: | ||||||
| Ratios of expenses to average net assets: (d) | ||||||
| Gross | 1.26% | 1.38% | 1.42% | 1.39% | 1.41% | 1.42% |
| Net | 1.26% | 1.38% | 1.42% | 1.39% | 1.41% | 1.42% |
| Ratio of net investment income (loss) to average net assets (b) | 0.35% | 0.07% | (0.19)% | 0.48% | 1.35% | 0.48% |
| Portfolio Turnover | 35% | 54% | 53% | 71% | 50% | 72% |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | 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 tax purposes. |
| (c) | 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. |
| (d) | 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 | ||||||
For the six months ended September 30, | Years Ended March 31, | |||||
| 2013 | 2013 | 2012 | 2011 | 2010 | 2009 | |
| (unaudited) | ||||||
| Net Asset Value, Beginning of Period | $15.85 | $14.33 | $12.36 | $11.37 | $8.24 | $14.07 |
| Income from Investment Operations: | ||||||
| Net investment income (loss) (a)(c) | 0.10(b) | 0.16(b) | 0.17(b) | 0.09(b) | 0.05 | (0.04) |
| Net realized and unrealized gain/(loss) on securities | 0.42 | 1.52 | 1.92 | 1.01 | 3.10 | (5.78) |
| Total from Investment Operations | 0.52 | 1.68 | 2.09 | 1.10 | 3.15 | (5.82) |
| Less Distributions: | ||||||
| Dividends from net investment income | — | (0.16) | (0.12) | (0.11) | (0.02) | (0.01) |
| Distributions from realized capital gains | — | — | — | — | — | — |
| Total Distributions | — | (0.16) | (0.12) | (0.11) | (0.02) | (0.01) |
| Net Asset Value, End of Period | $16.37 | $15.85 | $14.33 | $12.36 | $11.37 | $8.24 |
| Total Return | 3.28% | 11.85% | 16.99% | 9.78%(d) | 38.30%(d) | (41.36)%(d) |
| Net Assets, End of Period (000’s) | $102,137 | $98,033 | $92,557 | $62,920 | $54,213 | $43,014 |
| Ratios and Supplemental Data: | ||||||
| Ratios of expenses to average net assets: (e) | ||||||
| Gross | 1.54% | 1.62% | 1.66% | 1.93% | 2.10% | 2.71% |
| Net including dividend and interest expense for securities sold short | 1.29% | 1.46% | 1.51% | 1.89% | 2.10% | 2.71% |
| Net excluding dividend and interest expense for securities sold short | 1.29% | 1.46% | 1.51% | 1.85% | 1.92% | 1.98% |
| Ratio of net investment income (loss) to average net assets (c) | 1.15% | 1.11% | 1.28% | 0.84% | 0.50% | (0.38)% |
| Portfolio Turnover Excluding Short Positions | 14% | 40% | 68% | 283%(f) | 191%(f) | 207%(f) |
Note: This fund changed its investment strategy on January 27, 2011.
The accompanying notes are an integral part of these financial statements.
| Institutional Shares | ||||||
For the six months ended September 30, | Years Ended March 31, | |||||
| 2013 | 2013 | 2012 | 2011 | 2010 | 2009 | |
| (unaudited) | ||||||
| Net Asset Value, Beginning of Period | $16.58 | $14.95 | $12.85 | $11.80 | $8.54 | $14.71 |
| Income from Investment Operations: | ||||||
| Net investment income (loss) (a)(c) | 0.12(b) | 0.24(b) | 0.25(b) | 0.12(b) | 0.08 | (0.10) |
| Net realized and unrealized gain/(loss) on securities | 0.45 | 1.59 | 1.99 | 1.06 | 3.22 | (6.02) |
| Total from Investment Operations | 0.57 | 1.83 | 2.24 | 1.18 | 3.30 | (6.12) |
| Less Distributions: | ||||||
| Dividends from net investment income | — | (0.20) | (0.14) | (0.13) | (0.04) | (0.05) |
| Distributions from realized capital gains | — | — | — | — | — | — |
| Total Distributions | — | (0.20) | (0.14) | (0.13) | (0.04) | (0.05) |
| Net Asset Value, End of Period | $17.15 | $16.58 | $14.95 | $12.85 | $11.80 | $8.54 |
| Total Return | 3.44% | 12.37% | 17.57% | 10.07%(d) | 38.71%(d) | (41.66)%(d) |
| Net Assets, End of Period (000’s) | $8,277 | $3,576 | $2,558 | $809 | $591 | $584 |
| Ratios and Supplemental Data: | ||||||
| Ratios of expenses to average net assets: (e) | ||||||
| Gross | 1.28% | 1.35% | 1.41% | 1.71% | 1.81% | 3.19% |
| Net including dividend and interest expense for securities sold short | 0.97% | 1.01% | 1.00% | 1.67% | 1.81% | 3.19% |
| Net excluding dividend and interest expense for securities sold short | 0.97% | 1.01% | 1.00% | 1.63% | 1.63% | 2.46% |
| Ratio of net investment income (loss) to average net assets (c) | 1.40% | 1.58% | 1.85% | 1.08% | 0.75% | (0.86)% |
| Portfolio Turnover Excluding Short Positions | 14% | 40% | 68% | 283%(f) | 191%(f) | 207%(f) |
Note: This Fund changed its investment strategy on January 27, 2011.
| (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 tax purposes. |
| (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 | ||||||
For the six months ended September 30, | Years Ended March 31, | |||||
| 2013 | 2013 | 2012 | 2011 | 2010 | 2009 | |
| (unaudited) | ||||||
| Net Asset Value, Beginning of Period | $23.56 | $22.67 | $25.18 | $21.23 | $12.06 | $27.04 |
| Income from Investment Operations: | ||||||
| Net investment income (loss) (a)(b) | 0.31 | 0.37 | 0.41 | 0.24 | 0.18 | 0.33 |
| Net realized and unrealized gain/(loss) on securities | (1.52) | 0.85 | (2.44) | 3.96 | 9.05 | (14.76) |
| Total from Investment Operations | (1.21) | 1.22 | (2.03) | 4.20 | 9.23 | (14.43) |
| Less Distributions: | ||||||
| Dividends from net investment income | — | (0.33) | (0.48) | (0.25) | (0.06) | (0.43) |
| Distributions from realized capital gains | — | — | — | — | — | (0.12) |
| Total Distributions | — | (0.33) | (0.48) | (0.25) | (0.06) | (0.55) |
| Net Asset Value, End of Period | $22.35 | $23.56 | $22.67 | $25.18 | $21.23 | $12.06 |
| Total Return | (5.14)% | 5.41% | (7.80)% | 19.86% | 76.56% | (53.27)%(c) |
| Net Assets, End of Period (000’s) | $130,767 | $140,267 | $145,201 | $176,386 | $205,727 | $164,133 |
| Ratios and Supplemental Data: | ||||||
| Ratios of expenses to average net assets: (d) | ||||||
| Gross | 1.74% | 1.76% | 1.76% | 1.77% | 1.74% | 1.67% |
| Net | 1.74% | 1.76% | 1.76% | 1.77% | 1.74% | 1.67% |
| Ratio of net investment income (loss) to average net assets (b) | 2.80% | 1.66% | 1.80% | 1.05% | 0.99% | 1.66% |
| Portfolio Turnover | 37% | 25% | 56% | 68% | 120% | 67% |
The accompanying notes are an integral part of these financial statements.
| Institutional Shares | ||||||
For the six months ended September 30, | Years Ended March 31, | |||||
| 2013 | 2013 | 2012 | 2011 | 2010 | 2009 | |
| (unaudited) | ||||||
| Net Asset Value, Beginning of Period | $23.88 | $22.97 | $25.53 | $21.48 | $12.19 | $27.46 |
| Income from Investment Operations: | ||||||
| Net investment income (loss) (a)(b) | 0.35 | 0.43 | 0.41 | 0.42 | 0.27 | 0.34 |
| Net realized and unrealized gain/(loss) on securities | (1.55) | 0.87 | (2.42) | 3.89 | 9.11 | (14.98) |
| Total from Investment Operations | (1.20) | 1.30 | (2.01) | 4.31 | 9.38 | (14.64) |
| Less Distributions: | ||||||
| Dividends from net investment income | — | (0.39) | (0.55) | (0.26) | (0.09) | (0.51) |
| Distributions from realized capital gains | — | — | — | — | — | (0.12) |
| Total Distributions | — | (0.39) | (0.55) | (0.26) | (0.09) | (0.63) |
| Net Asset Value, End of Period | $22.68 | $23.88 | $22.97 | $25.53 | $21.48 | $12.19 |
| Total Return | (5.03)% | 5.69% | (7.56)% | 20.14% | 77.02% | (53.17)% |
| Net Assets, End of Period (000’s) | $14,288 | $15,165 | $15,569 | $11,267 | $26,247 | $25,664 |
| Ratios and Supplemental Data: | ||||||
| Ratios of expenses to average net assets: (d) | ||||||
| Gross | 1.48% | 1.49% | 1.52% | 1.51% | 1.50% | 1.48% |
| Net | 1.48% | 1.49% | 1.52% | 1.51% | 1.50% | 1.48% |
| Ratio of net investment income (loss) to average net assets (b) | 3.05% | 1.92% | 1.81% | 1.94% | 1.48% | 1.82% |
| Portfolio Turnover | 37% | 25% | 56% | 68% | 120% | 67% |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | 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 tax purposes. |
| (c) | 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. |
| (d) | 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 PANAGORA RISK PARITY EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
| Ordinary Shares | |
For the period ended September 30, 2013* | |
| (unaudited) | |
| Net Asset Value, Beginning of Period | $10.00 |
| Income from Investment Operations: | |
| Net investment income (loss) (a)(b) | — |
| Net realized and unrealized gain/(loss) on securities | 0.33 |
| Total from Investment Operations | 0.33 |
| Less Distributions: | |
| Dividends from net investment income | — |
| Distributions from realized capital gains | — |
| Total Distributions | — |
| Net Asset Value, End of Period | $10.33 |
| Total Return | 3.30%* |
| Net Assets, End of Period (000’s) | $16 |
| Ratios and Supplemental Data: | |
| Ratios of expenses to average net assets: (d) | |
| Gross | 1.92%** |
| Net | 1.92%** |
| Ratio of net investment income (loss) to average net assets (b) | 0.35%** |
| Portfolio Turnover | 6% |
The accompanying notes are an integral part of these financial statements.
| Institutional Shares | |
For the period ended September 30, 2013* | |
| (unaudited) | |
| Net Asset Value, Beginning of Period | $10.00 |
| Income from Investment Operations: | |
| Net investment income (loss) (a)(b) | 0.01 |
| Net realized and unrealized gain/(loss) on securities | 0.32 |
| Total from Investment Operations | 0.33 |
| Less Distributions: | |
| Dividends from net investment income | — |
| Distributions from realized capital gains | — |
| Total Distributions | — |
| Net Asset Value, End of Period | $10.33 |
| Total Return | 3.30%* |
| Net Assets, End of Period (000’s) | $24,257 |
| Ratios and Supplemental Data: | |
| Ratios of expenses to average net assets: (d) | |
| Gross | 1.68%** |
| Net | 1.68%** |
| Ratio of net investment income (loss) to average net assets (b) | 0.58%** |
| Portfolio Turnover | 6% |
| * | Fund commenced operations June 27, 2013. |
| ** | Annualized. |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | 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 tax purposes. |
| (c) | 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. |
| (d) | 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 | ||||||
For the six months ended September 30, | Years Ended March 31, | |||||
| 2013 | 2013 | 2012 | 2011 | 2010 | 2009 | |
| (unaudited) | ||||||
| Net Asset Value, Beginning of Period | $15.83 | $13.64 | $14.68 | $12.45 | $6.97 | $19.87 |
| Income from Investment Operations: | ||||||
| Net investment income (loss) (a)(b) | 0.16 | 0.15 | 0.12 | 0.07 | 0.13 | 0.35 |
| Net realized and unrealized gain/(loss) on securities | 1.15 | 2.12 | (1.09) | 2.31 | 5.71 | (11.53) |
| Total from Investment Operations | 1.31 | 2.27 | (0.97) | 2.38 | 5.84 | (11.18) |
| Less Distributions: | ||||||
| Dividends from net investment income | — | (0.08) | (0.07) | (0.15) | (0.36) | (0.11) |
| Distributions from realized capital gains | — | — | — | — | — | (1.61) |
| Total Distributions | — | (0.08) | (0.07) | (0.15) | (0.36) | (1.72) |
| Net Asset Value, End of Period | $17.14 | $15.83 | $13.64 | $14.68 | $12.45 | $6.97 |
| Total Return | 8.28% | 16.73% | (6.55)% | 19.17%(c) | 84.05%(c) | (55.95)%(c) |
| Net Assets, End of Period (000’s) | $887,047 | $705,210 | $386,011 | $369,550 | $369,626 | $193,798 |
| Ratios and Supplemental Data: | ||||||
| Ratios of expenses to average net assets: (d) | ||||||
| Gross | 1.54% | 1.59% | 1.64% | 1.62% | 1.62% | 1.62% |
| Net | 1.54% | 1.59% | 1.64% | 1.62% | 1.62% | 1.62% |
| Ratio of net investment income (loss) to average net assets (b) | 1.92% | 1.04% | 0.93% | 0.56% | 1.17% | 2.49% |
| Portfolio Turnover | 0% | 10% | 18% | 9% | 24% | 20% |
The accompanying notes are an integral part of these financial statements.
| Institutional Shares | |||||||
For the six months ended September 30, | Years Ended March 31, | ||||||
| 2013 | 2013 | 2012 | 2011 | 2010 | 2009 | ||
| (unaudited) | |||||||
| Net Asset Value, Beginning of Period | $15.83 | $13.63 | $14.68 | $12.45 | $6.98 | $19.98 | |
| Income from Investment Operations: | |||||||
| Net investment income (loss) (a)(b) | 0.19 | 0.17 | 0.14 | 0.10 | 0.14 | 0.38 | |
| Net realized and unrealized gain/(loss) on securities | 1.13 | 2.15 | (1.09) | 2.31 | 5.71 | (11.60) | |
| Total from Investment Operations | 1.32 | 2.32 | (0.95) | 2.41 | 5.85 | (11.22) | |
| Less Distributions: | |||||||
| Dividends from net investment income | — | (0.12) | (0.10) | (0.18) | (0.38) | (0.17) | |
| Distributions from realized capital gains | — | — | — | — | — | (1.61) | |
| Total Distributions | — | (0.12) | (0.10) | (0.18) | (0.38) | (1.78) | |
| Net Asset Value, End of Period | $17.15 | $15.83 | $13.63 | $14.68 | $12.45 | $6.98 | |
| Total Return | 8.34% | 17.07% | (6.34)% | 19.48%(c) | 84.12%(c) | (55.85)%(c) | |
| Net Assets, End of Period (000’s) | $208,685 | $180,265 | $98,109 | $78,790 | $68,067 | $47,090 | |
| Ratios and Supplemental Data: | |||||||
| Ratios of expenses to average net assets: (d) | |||||||
| Gross | 1.29% | 1.33% | 1.39% | 1.37% | 1.37% | 1.38% | |
| Net | 1.29% | 1.33% | 1.39% | 1.37% | 1.37% | 1.38% | |
| Ratio of net investment income (loss) to average net assets (b) | 2.25% | 1.22% | 1.07% | 0.79% | 1.29% | 2.77% | |
| Portfolio Turnover | 0% | 10% | 18% | 9% | 24% | 20% | |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | 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 tax purposes. |
| (c) | 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. |
| (d) | 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 | |||||||
For the six months ended September 30, | Years Ended March 31, | ||||||
| 2013 | 2013 | 2012 | 2011 | 2010 | 2009* | ||
| (unaudited) | |||||||
| Net Asset Value, Beginning of Period | $10.50 | $9.02 | $11.19 | $10.28 | $4.82 | $10.00 | |
| Income from Investment Operations: | |||||||
| Net investment income (loss) (a)(c) | 0.15 | 0.14 | 0.21 | 0.09 | 0.07 | 0.03 | (b) |
| Net realized and unrealized gain/(loss) on securities | 0.41 | 1.50 | (1.29) | 1.25 | 5.42 | (5.15) | |
| Total from Investment Operations | 0.56 | 1.64 | (1.08) | 1.34 | 5.49 | (5.12) | |
| Less Distributions: | |||||||
| Dividends from net investment income | — | (0.16) | (0.10) | (0.08) | (0.03) | (0.04) | |
| Distributions from realized capital gains | — | — | (0.99) | (0.35) | — | (0.02) | |
| Total Distributions | — | (0.16) | (1.09) | (0.43) | (0.03) | (0.06) | |
| Net Asset Value, End of Period* | $11.06 | $10.50 | $9.02 | $11.19 | $10.28 | $4.82 | |
| Total Return | 5.33% | 18.34% | (8.20)% | 13.12%(d) | 114.00%(d) | (51.25)%(d) | |
| Net Assets, End of Period (000’s) | $96,126 | $92,806 | $72,737 | $78,307 | $124,971 | $18,978 | |
| Ratios and Supplemental Data: | |||||||
| Ratios of expenses to average net assets: (e) | |||||||
| Gross | 1.60% | 1.66% | 1.70% | 1.69% | 1.64% | 2.00%** | |
| Net | 1.60% | 1.66% | 1.70% | 1.69% | 1.64% | 1.97%** | |
| Ratio of net investment income (loss) to average net assets (c) | 2.84% | 1.55% | 2.14% | 0.82% | 0.82% | 0.66%** | |
| Portfolio Turnover | 2% | 9% | 22% | 54% | 14% | 10% | |
The accompanying notes are an integral part of these financial statements.
| Institutional Shares | |||||||
For the six months ended September 30, | Years Ended March 31, | ||||||
| 2013 | 2013 | 2012 | 2011 | 2010 | 2009* | ||
| (unaudited) | |||||||
| Net Asset Value, Beginning of Period | $10.51 | $9.03 | $11.21 | $10.30 | $4.82 | $10.00 | |
| Income from Investment Operations: | |||||||
| Net investment income (loss) (a)(c) | 0.16 | 0.17 | 0.24 | 0.09 | 0.11 | 0.07 | (b) |
| Net realized and unrealized gain/(loss) on securities | 0.42 | 1.49 | (1.30) | 1.28 | 5.41 | (5.19) | |
| Total from Investment Operations | 0.58 | 1.66 | (1.06) | 1.37 | 5.52 | (5.12) | |
| Less Distributions: | |||||||
| Dividends from net investment income | — | (0.18) | (0.13) | (0.11) | (0.04) | (0.04) | |
| Distributions from realized capital gains | — | — | (0.99) | (0.35) | — | (0.02) | |
| Total Distributions | — | (0.18) | (1.12) | (0.46) | (0.04) | (0.06) | |
| Net Asset Value, End of Period* | $11.09 | $10.51 | $9.03 | $11.21 | $10.30 | $4.82 | |
| Total Return | 5.52% | 18.59% | (7.99)% | 13.40%(d) | 114.55%(d) | (51.20)%(d) | |
| Net Assets, End of Period (000’s) | $25,692 | $22,459 | $20,567 | $23,973 | $8,103 | $3,592 | |
| Ratios and Supplemental Data: | |||||||
| Ratios of expenses to average net assets: (e) | |||||||
| Gross | 1.35% | 1.41% | 1.43% | 1.44% | 1.43% | 1.88%** | |
| Net | 1.35% | 1.41% | 1.43% | 1.44% | 1.43% | 1.85%** | |
| Ratio of net investment income (loss) to average net assets (c) | 3.06% | 1.88% | 2.45% | 0.92% | 1.27% | 1.10%** | |
| Portfolio Turnover | 2% | 9% | 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 tax purposes. |
| (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 FUNDS
NOTES TO FINANCIAL STATEMENTS
September 30, 2013 (unaudited)
1. Organization of the Trust
Pear Tree 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 an 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 Quality Fund (“Quality”) seeks long-term growth of capital.
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.
Pear Tree PanAgora Dynamic Emerging Markets Fund (“Emerging Markets”) seeks long-term growth of capital.
Pear Tree PanAgora Risk Parity Emerging Markets Fund (“Risk Parity”) seeks long-term growth of capital.
Each of the Funds is a “non-diversified company,” within the meaning of the 1940 Act, other than Emerging Markets, which is a “diversified company”.
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 (except as noted in the following sentence), 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 Funds’ prospectus. Please refer to the Funds’ prospectus 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 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’ 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 net asset value. Because foreign markets may be open at different times than when the New York Stock Exchange is open for regular trading, 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 Funds’ Valuation Procedures include 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 a 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 a 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 September 30, 2013:
Quoted Prices In Active Markets | Significant Other Observable Inputs | Significant Unobservable Inputs | Market Value at September 30, 2013 | |
| Level 1 | Level 2 | Level 3 | Total | |
| Small Cap | ||||
| Common Stock* | $ 106,942,325 | $— | $— | $ 106,942,325 |
| Depository Receipts | 1,775,476 | — | — | 1,775,476 |
| Real Estate Inv. Trusts | 12,488,607 | — | — | 12,488,607 |
| Short Term Investments | 7,215,449 | 2,087,920 | — | 9,303,369 |
| Total | $128,421,857 | $2,087,920 | $— | $130,509,777 |
| Quality | ||||
| Common Stock* | $96,107,492 | $— | $— | $96,107,492 |
| Depository Receipts | 13,454,534 | — | — | 13,454,534 |
| Short Term Investments | 1,060,214 | 726,159 | — | 1,786,373 |
| Total | $110,622,240 | $726,159 | $— | $111,348,399 |
| Emerging Markets | ||||
| Common Stock* | $97,628,275 | $3,770,658 | $— | $101,398,933 |
| Common Stock Units | 954,373 | — | — | 954,373 |
| Depository Receipts | 12,939,243 | — | — | 12,939,243 |
| Mutual Funds** | 24,159,734 | — | — | 24,159,734 |
| Preferred Stock | 3,644,380 | — | — | 3,644,380 |
| Real Estate Inv. Trusts | 363,133 | — | — | 363,133 |
| Short Term Investments | 7,149,823 | 1,110,748 | — | 8,260,571 |
| Total | $146,838,961 | $4,881,406 | $— | $151,720,367 |
| Risk Parity | ||||
| Common Stock* | $16,551,995 | $1,585,696 | $— | $18,137,691 |
| Common Stock Units | 71,528 | — | — | 71,528 |
| Depository Receipts | 2,463,973 | — | — | 2,463,973 |
| Exchange Traded Funds | 1,709,998 | — | — | 1,709,998 |
| Exchange Traded Notes | 1,153,149 | — | — | 1,153,149 |
| Preferred Stock | 552,063 | — | — | 552,063 |
| Real Estate Inv. Trusts | 105,867 | — | — | 105,867 |
| Rights | — | — | 1,297 | 1,297 |
| Short Term Investments | 227,202 | 16,934 | — | 244,136 |
| Total | $22,835,775 | $1,602,630 | $1,297 | $24,439,702 |
| Foreign Value | ||||
| Common Stock* | $925,160,524 | $25,931,744 | $— | $951,092,268 |
| Depository Receipts | 75,418,559 | — | — | 75,418,559 |
| Short Term Investments | 84,689,028 | — | — | 84,689,028 |
| Total | $1,085,268,111 | $25,931,744 | $— | $1,111,199,855 |
| Foreign Value Small Cap | ||||
| Common Stock* | $105,700,729 | $4,809,774 | $81,747 | $110,592,250 |
| Preferred Stock | 2,155,808 | — | — | 2,155,808 |
| Short Term Investments | 7,511,914 | — | — | 7,511,914 |
| P-Notes* | — | 3,578,035 | — | 3,578,035 |
| Total | $115,368,451 | $8,387,809 | $81,747 | $123,838,007 |
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 | Emerging Markets Common Stock | Risk Parity Rights | |
| Balances as of 3/31/2013 | $82,689 | $839,179 | $— |
| Realized gain (loss) | $— | $— | $— |
| Changed in unrealized appreciation (depreciation) | $(942) | $(223,438) | $1,297 |
| Net purchases (sales) | $— | $(615,741) | $— |
| Transfer into Level 3 | $— | $— | $— |
| Balances as of 9/30/2013 | $81,747 | $— | $1,297 |
| * | Refer to Schedule of Investments for breakout by industry or country. |
| * | Transfers between levels are recognized at the end of the reporting period. |
| * | Level 3 for Risk Parity in the amount of $1,297 is from security being halted due to a rights offering. |
| * | Common stock and P-Notes labeled as Level 2 balance consists of the market value of the associated Level 2 investments in the following industries: |
| ** | Price is NAV as reported. |
| Foreign Value | Foreign Value Small Cap | Emerging Markets | Risk Parity | |
| Banks | $— | $801,900 | $1,040,990 | $147,143 |
| Chemicals | — | — | 888,141 | 215,962 |
| Commercial Services & Supplies | — | — | — | 118,830 |
| Diversified Financials | — | 614,172 | 440,629 | — |
| Diversified Telecommunications | — | — | — | 69,150 |
| Electric Utilities | — | 1,950,128 | 208,830 | 127,663 |
| Electronic Equipment & Instruments | — | 1,520,612 | — | — |
| Food and Drug Retailing | — | — | — | 108,261 |
| Food Products | — | 1,993,340 | — | — |
| Hotels, Restaurants & Leisure | — | — | — | 92,220 |
| Industrial Conglomerates | — | — | — | 45,716 |
| Media | — | — | — | 93,797 |
| Metals & Mining | — | 275,867 | — | — |
| Multiline Retail | — | — | 1,192,068 | 84,744 |
| Oil & Gas | 25,931,744 | — | — | 150,607 |
| Real Estate | — | — | — | 60,767 |
| Software & Services | — | 1,231,790 | — | — |
| Specialty Retail | — | — | — | 72,623 |
| Transportation Infrastructure | — | — | — | 75,930 |
| Wireless Telecommunication Services | — | — | — | 122,283 |
| $25,931,744 | $8,387,809 | $3,770,658 | $1,585,696 |
* Common stock labeled as Level 3 balance consists of the market value of the associated Level 3 investments in the following industries:
| Foreign Value | Foreign Value Small Cap | Emerging Markets | Risk Parity | |
| Leisure Equipment & Products | $— | $81,747 | $— | $— |
| Oil & Gas | — | — | — | 1,297 |
| $— | $81,747 | $— | $1,297 |
The following table presents additional information about valuation methodologies and inputs used for investments that are measured at fair value and categorized within Level 3 as of September 30, 2013;
Common Stock | Fair Value Sept. 30, 2013 | Valuation Methodologies | Unobservable Input (1) | Range | Impact to Valuation from a Decrease in Input (2) |
| Foreign Value Small Cap | $81,747 | Company Specific | Company Specific | 100% | Decrease |
| Rights | Fair Value Sept. 30, 2013 | Valuation Methodologies | Unobservable Input (1) | Range | Impact to Valuation from a Decrease in Input (2) |
| Risk Parity | $ 1,297 | Company Specific | Company Specific | 100% | Decrease |
| 1. | In determining certain of these inputs, management evaluates a variety of factors including economic conditions, industry and market developments, and company specific developments. |
| 2. | This column represents the directional change in the fair value of the level 3 investments that would result from a decrease to the corresponding unobservable input. An increase to the observable input would have the opposite effect. |
In January 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-01 Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. This update gives additional clarification to the FASB ASU No. 2011-11 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. The Fund is currently evaluating the impact ASU 2013-01 will have on the financial statements disclosures.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. 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. The Funds’ 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 minimal.
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. 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 confirm 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.
Counterparty Credit Risk
Some transactions in which a Fund may engage involve instruments that are not traded on an exchange. Rather, these instruments are traded between counterparties based on contractual relationships. As a result, a Fund is subject to the risk that the counterparty will not perform obligations under the related contract. Although a Fund expects to enter into transactions only with counterparties believed by the Fund’s investment manager or Sub-Advisor to be creditworthy, there can be no assurance that a counterparty will not default and that the Fund will not sustain a loss on a transaction as a result.
The purchase of participatory notes involves risk that is in addition to the risks normally associated with a direct investment in the underlying securities. A Fund is subject to the risk that the issuer of the participatory note (i.e., the issuing bank or broker-dealer), which is the only responsible party under the note, is unable or refuses to perform under the terms of the participatory note.
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 a Fund as an unrealized gain or loss. When the contract is closed, a Fund records a realized gain or loss equal to the difference between the value of the contract at the time it is opened and the value at the time it is closed. In addition to the risks of financial investments mentioned above, risks arise from unanticipated movements in currency values.
There were no open foreign currency contracts held by any Fund at September 30, 2013.
Securities Lending
To generate additional income, each of Small Cap, Quality, Emerging Markets and Risk Parity use Securities Finance Trust Company (“eSecLending”) as lending agent. Small Cap, Quality, Emerging Markets and Risk Parity may each lend up to 30 percent of its assets pursuant to certain agreements (“Securities Lending Agreements”) requiring that the loan be continuously secured by cash or securities. Securities loaned are arranged by eSecLending with certain pre-approved borrowers, typically broker-dealers acting on behalf of their clients. The borrowers are required to provide cash or securities as collateral against loaned securities in the amount of 105 percent of the market value of borrowings for Emerging Markets and Risk Parity, and 102 percent of the borrowings for the Small Cap and Quality. Collateral is marked-to-market daily. Cash collateral is invested in a registered money market fund.
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 via highly rated third party insurers to cover these potential risks.
At September 30, 2013, the following Funds had collateral and loans outstanding of:
| Value of Collateral | Value of Loaned Securities | |
| Small Cap | $ 7,215,449 | 7,059,795 |
| Quality | 1,060,214 | 1,038,292 |
| Emerging Markets | 7,149,823 | 6,686,621 |
| Risk Parity | 227,202 | 218,996 |
Credit Facility
State Street made available to the Trust an uncommitted unsecured demand line of credit in the amount of $15 million. State Street looked solely to the assets of the Fund for the enforcement of any claim against that Fund. For the six months ended September 30, 2013, the average interest rate on the outstanding principal amount was 1.39%. During six months ended September 30, 2013 Small Cap and Emerging Markets had an outstanding average daily loan balance of $6,335 and $221,109 respectively. The maximum amount outstanding for the current lending agreement during the period was $ 430,807 for Small Cap and $4,844,162 for Emerging Markets. Interest expense amounted to $33 and $1,028 respectively. As of September 4, 2013, the Trust did not renew this credit facility. Thus, at September 30, 2013 there 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 (12b-1) 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 (12b-1) 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 distribution (12b-1) 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 percent of the average daily total net assets of each of the Funds except for Risk Parity an annual rate 0.60 percent of the average daily total net assets.
Effective December 1, 2013, the Manager has agreed until July 31, 2014 to waive 0.25 percent of its management fee if the Quality Fund’s average daily net assets are up to $125 million and 0.50 percent of its management fee if the Fund’s average daily net assets are $125 million or more. Beginning on January 27, 2011, the Manager had agreed until July 31, 2014 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. The Trustees have the right to terminate this arrangements in their 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 Fund to the extent that the total expenses of this Fund individually exceeds 2 percent 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 six months ended September 30, 2013, aggregate management fees exclusive of fee waivers and Fund reimbursements, from all Funds were $7,313,898.
The Manager has entered into sub-advisory contracts with the following subadvisors (collectively the “Sub-Advisers”) to provide investment sub-advisory services to the following Funds: Columbia Partners, L.L.C., Investment Management (Small Cap and Quality), PanAgora Asset Management, Inc. (Emerging Markets and Risk Parity), and Polaris Capital Management, LLC (Foreign Value and Foreign Value Small Cap).
For services rendered, the Manager pays to the Sub-Advisers 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 Sub-Advisers of the Funds are as follows:
| Small 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 | |
| Risk Parity | 0.25% of the first $300 million and |
| 0.30% of amounts in excess of $300 million but less than $600 million and | |
| 0.35% of amounts in excess of $600 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. |
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 receives the distribution (12b-1) fees, that is, 0.25percent of the average daily net asset value of the Ordinary Shares of the Funds, payable monthly.
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 six months ended September 30, 2013 the aggregate distribution fees of the Funds were $1,530,984.
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 0.16percent 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 six months ended September 30, 2013, the aggregate fees of the Funds were $1,207,145.
Pursuant to an Administration Agreement, the Manager provides certain administrative services to the Funds. During the six months ended September 30, 2013, fees paid pursuant to this agreement were $210,995.
The Trustees have approved reimbursement to the Manager for a percentage of the compensation paid by the Manager to the Trust’s Chief Compliance Officer. For the six months ended September 30, 2013, the Trust reimbursed the Manager for the Chief Compliance Officer’s compensation in the amount of $96,397.
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 six months ended September 30, 2013, each Trustee who was not an “interested person” of the Trust, as that term is defined in the 1940 Act, received a fee for serving in that role of $28,000, 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 six months ended September 30, 2013, purchases of investment securities other than U.S. Government obligations and short-term investments for Small Cap, Quality, Emerging Markets , Risk Parity, Foreign Value, and Foreign Value Small Cap, were $40,042,977, $20,461,463, $53,145,965, $25,319,856 ,$209,382,485, and $12,821,373 respectively. Sales of such securities for the Funds were $41,600,472, $14,653,848, $54,158,747, $1,734,557, $3,610,057, and $1,699,621 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 percent 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 and Risk Parity 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 each Fund’s investments and the income they generate, as well as each 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, 2013. The accumulated capital losses noted in the table may be available to offset future realized capital gains and thereby reduce future taxable gain distributions.
| March 31, 2013 | ||||||
| Portfolio | Capital Loss Expires March 31, 2017 | Capital Loss Expires 2018 | Capital Loss Expires 2019 | Capital Loss No Expiration Short Term | Capital Loss No Expiration Long Term | Total Capital Loss |
| Small Cap | $— | $9,745,323 | $— | $— | $— | $9,745,323 |
| Quality | — | 4,390,352 | — | — | — | 4,390,352 |
| Emerging Markets | — | 23,648,614 | — | 3,903,257 | 2,207,358 | 29,759,229 |
| Foreign Value | 73,956,485 | 131,156,114 | 10,547,106 | — | 26,927,583 | 242,587,288 |
| Foreign Value Small Cap | — | — | — | 1,085,262 | 140,282 | 1,225,544 |
* Risk Parity Fund commenced operations on June 27, 2013 and thus had no Capital Loss carryovers at March 31, 2013.
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 Act. During the fiscal year ending March 31, 2013, capital loss carryovers in the amount of $10,192,224, $4,545,152, $0, $0 and $0 were utilized by Small 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 2010-2012, or expected to be taken in the Funds’ 2013 tax returns. The Funds identify their major tax jurisdictions as U.S. Federal and Massachusetts State; 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 six 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.
At September 30, 2013, the Funds’ aggregate security unrealized gains and losses based on cost for U.S. federal income tax purposes was as follows:
| Portfolio | Tax Cost | Gross Unrealized Gain | Gross Unrealized Loss | Net Unrealized Gain (Loss) |
| Small Cap | $88,987,830 | $35,785,002 | $(1,478,504) | $34,306,498 |
| Quality | 95,816,687 | 14,704,546 | (233,048) | 14,471,498 |
| Emerging Markets | 139,484,492 | 19,977,108 | (14,891,056) | 5,086,052 |
| Risk Parity | 23,691,341 | 1,302,963 | (781,803) | 521,160 |
| Foreign Value | 934,565,694 | 202,709,790 | (26,075,628) | 176,634,162 |
| Foreign Value Small Cap | 91,858,077 | 37,115,957 | (5,136,027) | 31,979,930 |
8. Transactions in Shares of Beneficial Interest
Transactions in shares of beneficial interest were as follows:
Six months ended September 30, 2013 | Year ended March 31, 2013 | |||
| Shares | Dollars | Shares | Dollars | |
| Small Cap | ||||
| Ordinary Shares | ||||
| Shares sold | 104,345 | $2,459,831 | 397,277 | $8,042,906 |
| Shares issued in reinvestment of distributions | — | — | — | — |
| Shares redeemed | (174,098) | (4,204,315) | (604,482) | (12,206,925) |
| Net Change | (69,753) | (1,744,484) | (207,205) | (4,164,019) |
| Institutional Shares | ||||
| Shares sold | 1,480 | $40,383 | 110,070 | $2,615,413 |
| Shares issued in reinvestment of distributions | — | — | — | — |
| Shares redeemed | (8,140) | (218,453) | (67,472) | (1,642,916) |
| Net Change | (6,660) | (178,070) | 42,598 | 972,497 |
| Total Net Change For Fund | $(1,922,554) | $(3,191,522) | ||
| Quality | ||||
| Ordinary Shares | ||||
| Shares sold | 264,913 | $4,339,423 | 1,087,154 | $15,630,714 |
| Shares issued in reinvestment of distributions | — | — | 66,925 | 969,079 |
| Shares redeemed | (209,724) | (3,445,138) | (1,428,820) | (20,306,550) |
| Net Change | 55,189 | 894,285 | (274,741) | (3,706,757) |
| Institutional Shares | ||||
| Shares sold | 285,319 | $4,932,478 | 94,140 | $1,452,652 |
| Shares issued in reinvestment of distributions | — | — | 2,284 | 34,560 |
| Shares redeemed | (18,380) | (317,422) | (51,833) | (801,346) |
| Net Change | 266,939 | 4,615,056 | 44,591 | 685,866 |
| Total Net Change For Fund | $5,509,341 | $(3,020,891) | ||
| Emerging Markets | ||||
| Ordinary Shares | ||||
| Shares sold | 461,030 | $10,281,804 | 1,084,432 | $24,063,148 |
| Shares issued in reinvestment of distributions | — | — | 79,817 | 1,831,797 |
| Shares redeemed | (563,978) | (12,532,490) | (1,616,028) | (35,835,496) |
| Net Change | (102,948) | (2,250,686) | (451,779) | (9,940,551) |
| Institutional Shares | ||||
| Shares sold | 58,190 | $1,313,029 | 171,805 | $3,943,602 |
| Shares issued in reinvestment of distributions | — | — | 10,116 | 235,107 |
| Shares redeemed | (60,340) | (1,429,953) | (224,737) | (5,129,602) |
| Net Change | (5,150) | (116,924) | (42,816) | (950,893) |
| Total Net Change For Fund | $(2,367,610) | $(10,891,444) | ||
| Risk Parity | ||||
| Ordinary Shares | ||||
| Shares sold | 1,580 | $ 15,824 | ||
| Shares issued in reinvestment of distributions | — | — | ||
| Shares redeemed | — | — | ||
| Net Change | 1,580 | 15,824 | ||
| Institutional Shares | ||||
| Shares sold | 2,347,543 | $23,625,034 | ||
| Shares issued in reinvestment of distributions | — | — | ||
| Shares redeemed | — | — | ||
| Net Change | 2,347,543 | 23,625,034 | ||
| Total Net Change For Fund | $23,640,858 | |||
| Foreign Value | ||||
| Ordinary Shares | ||||
| Shares sold | 10,116,867 | $166,412,841 | 20,220,091 | $294,062,327 |
| Shares issued in reinvestment of distributions | — | — | 198,468 | 2,881,757 |
| Shares redeemed | (2,902,736) | (47,719,048) | (4,177,814) | (58,836,804) |
| Net Change | 7,214,131 | 118,693,793 | 16,240,745 | 238,107,280 |
| Institutional Shares | ||||
| Shares sold | 1,244,641 | $20,922,844 | 5,147,715 | $71,138,617 |
| Shares issued in reinvestment of distributions | — | — | 79,411 | 1,152,265 |
| Shares redeemed | (469,361) | (7,691,480) | (1,034,703) | (14,583,083) |
| Net Change | 775,280 | 13,231,364 | 4,192,423 | 57,707,799 |
| Total Net Change For Fund | $131,925,157 | $295,815,079 | ||
| Foreign Value Small Cap | ||||
| Ordinary Shares | ||||
| Shares sold | 427,631 | $4,555,059 | 1,422,737 | $13,550,210 |
| Shares issued in reinvestment of distributions | — | — | 135,381 | 1,288,830 |
| Shares redeemed | (573,313) | (6,130,398) | (784,949) | (7,360,895) |
| Net Change | (145,682) | (1,575,339) | 773,169 | 7,478,145 |
| Institutional Shares | ||||
| Shares sold | 296,397 | $3,177,745 | 748,064 | $7,209,029 |
| Shares issued in reinvestment of distributions | — | — | 21,654 | 206,143 |
| Shares redeemed | (115,094) | (1,223,524) | (911,896) | (8,411,674) |
| Net Change | 181,303 | 1,954,221 | (142,178) | (996,502) |
| Total Net Change for Fund | $378,882 | $6,481,643 |
PEAR TREE FUNDS
INFORMATION FOR SHAREHOLDERS (unaudited)
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, 2013 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)
The Trustees, including the Independent Trustees, oversee the management of each Fund and, as required by law, determine annually whether to continue the Management Contract with respect to each Fund and the Subadvisory Contract for each Fund.
In connection with their most recent consideration of those agreements for each Fund (with the exception of the Risk Parity Fund, which is new), the Trustees received and reviewed information provided by the Manager and the Subadvisers in response to requests of the Independent Trustees and their independent legal counsel. Throughout their consideration of the agreements, the Independent Trustees were advised by their independent legal counsel. The Trustees met with management to consider the agreements, and the Independent Trustees also met separately in executive session with their independent legal counsel.
At a meeting held on May 16, 2013, based on the Trustees��� evaluation of the information provided by the Manager and the Subadvisers, as well as other information, the Trustees, including all of the Independent Trustees, determined that the overall arrangements with respect to each Fund and the Manager and each Subadviser, as applicable, were fair and reasonable in light of the nature, extent and quality of the services provided by the Manager, its affiliates and the Subadvisers, the fees charged for those services, and other matters that the Trustees considered relevant in the exercise of their business judgment. At that meeting, the Trustees, including the Independent Trustees, unanimously approved the continuation of the Management Contract and the Subadvisory Contract with respect to each Fund for an additional one-year period, subject to earlier termination as provided for in each agreement.
In considering the continuation of those agreements, the Trustees reviewed and analyzed various factors that they determined were relevant, including the factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Trustees’ determination to approve the continuation of the agreements are discussed separately below.
Nature, Extent and Quality of Services
The Trustees reviewed the nature, extent and quality of the services provided by the Manager and the Subadvisers to the Funds, taking into account the investment objective and strategy of each Fund and the knowledge the Trustees gained from their regular meetings with management on at least a quarterly basis and their ongoing review of information related to the Funds. In addition, the Trustees reviewed the resources and key personnel of the Manager and each Subadviser, particularly noting those employees who provide investment and risk management services to the Funds. The Trustees also considered other services provided to the Funds by the Manager or the Subadvisers, such as managing the execution of portfolio transactions and the selection of broker-dealers for those transactions. The Trustees considered the Manager’s role as administrator to the Funds, noting the Manager the fees that it receives for its services. The Trustees considered the role of the Manager in monitoring adherence to the Funds’ investment restrictions, providing support services for the Trustees and Trustee committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various policies and procedures of the Funds and with applicable securities laws and regulations.
The Trustees, including the Independent Trustees, concluded that the nature, extent and quality of the services provided by the Manager and the Subadviser to each Fund were appropriate and consistent with the terms of the Management Contract and the Subadvisory Contracts, and that, taking into account steps taken to address each Fund whose performance lagged that of its peers for certain periods, the quality of those services had been consistent with or superior to quality norms in the industry and the Funds were likely to benefit from the continued provision of those services. They also concluded that the Manager and each Subadviser had sufficient personnel, with the appropriate education and experience, to serve the Funds effectively and had demonstrated its continuing ability to attract well-qualified personnel.
Management Fees and Expenses
The Trustees reviewed the contractual investment advisory and subadvisory fee rates payable by each Fund and the Manager, respectively, as well as actual fees paid by each Fund, net of waivers. As part of its review, the Trustees considered each Fund’s management fee, subadvisory fee payable by the Manager, and total expense ratio (both before and after giving effect to any expense caps), as compared to a group of similarly managed funds selected by an independent data provider. The Trustees noted that the Manager did not have any clients other than the Funds, and thus they could not consider the comparability of the fees charged and the services provided to each Fund by the Manager and services provided to other clients of the Manager. In addition, the Trustees considered the willingness of the Manager to provide undertakings from time to time to waive fees or pay expenses of various Funds to limit the total expenses borne by shareholders of such Funds.
On the basis of the foregoing and other relevant information, and in light of the nature, extent and quality of the services provided by the Manager and the Subadvisers, the Trustees, including the Independent Trustees, concluded that the fees and the expense ratio of each Fund compare favorably to the fees and expenses of similar mutual funds and are reasonable in relation to the services provided.
Profitability
The Trustees reviewed the level of profits realized by the Manager and its affiliates in providing investment advisory and other services to each Fund and to all Funds as a group. The Trustees considered other direct and indirect benefits received by the Manager and its affiliates in connection with their relationships with the Funds.
The Trustees, including the Independent Trustees, concluded that the profitability of the Manager with respect to each of the Funds, and the profitability range of each of the Manager’s affiliates with respect to its services to the Funds, were reasonable in relation to the services provided.
Performance of the Funds
The Trustees considered the performance results of each Fund over various time periods. They reviewed information comparing each Fund’s performance with the performance of comparable funds and peer groups identified by independent data providers, and with the Fund’s benchmark index. In this regard, the Trustees noted that certain Funds had some recent performance challenges, but performance has recently been improving. The Trustees, including the Independent Trustees, concluded that the performance of certain Funds was good or very good under current market conditions. They also concluded that, although the performance of other Funds lagged that of their peers for certain periods, the Manager had taken or was taking appropriate steps to address those instances of under-performance.
Economies of Scale
The Trustees considered information about the potential for the Manager to realize economies of scale as the assets of the Funds increase. They noted that, although many Funds pay advisory fees at a base fixed rate as a percentage of net assets, the actual management fee rate paid by some of the Funds, after fee waivers and contractual expense limitations, was closer to the mean management fee rate of the Fund’s peer group identified by independent data providers. They noted that for those Funds whose expenses are being reduced by fee waivers and contractual expense limitations of the Manager, the Manager is subsidizing the Funds because they have not reached adequate scale. The Trustees also noted that the Funds share directly in economies of scale through the lower charges of third-party service providers that are based in part on the combined scale of all of the Funds. Based on all of the information they reviewed, the Trustees, including the Independent Trustees, concluded that the current fee structure of each Fund was reasonable and that the current rates of fees reflect a sharing between the Manager and the Fund of economies of scale at the current asset level of the Fund.
Other Benefits to the Manager
The Trustees also considered benefits that accrue to the Manager and its affiliates from their relationships with the Funds. They recognized that two affiliates of the Manager separately serve the Funds as transfer agent and distributor, respectively, and each receives compensation directly from the Funds for services provided. The Trustees, including the Independent Trustees, concluded that, other than the services provided by the Manager and its affiliates pursuant to the agreements and the fees to be paid by each Fund therefore, the Funds and the Manager may potentially benefit from their relationship with each other in other ways. They also concluded that, among other things, success of any Fund could attract other business to the Manager, and that the success of the Manager could enhance the Manager’s ability to serve the Funds.
* * *
After full consideration of the above factors, as well as other factors, the Trustees, including the Independent Trustees, concluded at their May 16, 2013 meeting that the proposed continuation of the Management Contract and the Subadvisory Contract with respect to each Fund for another year was in the best interest of the respective Funds and their shareholders.
PEAR TREE FUNDS
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PEAR TREE FUNDS
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PEAR TREE FUNDS
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PEAR TREE FUNDS
SERVICE PROVIDERS
| Manager | Pear Tree Advisors, Inc., 55 Old Bedford Road, Suite 202, Lincoln, MA 01772 |
| Subadvisers | Columbia Partners, L.L.C., Investment Management, 5425 Wisconsin Avenue, Suite 700, Chevy Chase, MD 20815 PanAgora Asset Management, Inc., 121 High Street, 2nd Floor, Boston, MA 02110 Polaris Capital Management, LLC, 125 Summer Street, Boston, MA 02210 |
| Distributor | U.S. Boston Capital Corporation, 55 Old Bedford Road, Suite 202, Lincoln, MA 01773 |
| Custodian | State Street Bank and Trust Company, One Lincoln Street, Boston, MA 02111 |
| Fund Accountant | State Street Bank and Trust Company, One Lincoln Street, Boston, MA 02111 |
| Transfer Agent | Pear Tree Institutional Services, 55 Old Bedford Road, Suite 202, Lincoln, MA 01773 |
Independent Registered Public Accounting Firm | Tait, Weller & Baker LLP, 1818 Market Street, Suite 2400 Philadelphia, PA 19103 |
| Legal Counsel | Nutter, McClennen & Fish, Seaport West, 155 Seaport Boulevard, Boston, MA 02210 |
| 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 |
ITEM 2. Code of Ethics
Not applicable for report period.
ITEM 3. Audit Committee Financial Expert
Not applicable for report period.
ITEM 4. Principal Accountant Fees and Services
Not applicable for report period.
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 | Purchases 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) 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: November 29, 2013
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: November 29, 2013
By /s/ Leon Okurowski
Leon Okurowski, Treasurer
Date: November 29, 2013