The Pear Tree Polaris Foreign Value Small Cap Fund (QUSIX) focuses on investing in undervalued small-cap companies outside of the U.S., primarily in developed markets. The fund aims to capitalize on price inefficiencies in foreign equities, leveraging a disciplined value-oriented investment strategy to identify opportunities.
Business Overview
The fund generates revenue primarily through management fees based on a percentage of AUM, which is typically around 1% annually. This model benefits from economies of scale as AUM increases, allowing for lower relative costs and higher margins.
Fluctuations in foreign equity markets, particularly in Europe and Asia
Changes in investor sentiment towards small-cap stocks
Performance relative to benchmark indices such as the MSCI EAFE Small Cap Index
Regulatory changes affecting foreign investments
Risk Factors
Increased regulatory scrutiny on foreign investments
Currency fluctuations impacting returns
Intensifying competition from other asset management firms
Emergence of low-cost index funds and ETFs
Potential liquidity issues during market downturns
Dependence on market conditions for AUM growth
Macro Sensitivity
high - The fund's performance is closely tied to global economic conditions, as small-cap stocks tend to be more sensitive to economic cycles.
Rising interest rates can lead to increased borrowing costs for companies, potentially impacting their growth and profitability, which in turn affects the fund's performance.
minimal - The fund is not directly dependent on credit markets, but broader credit conditions can impact equity valuations.
Profile
value - The fund appeals to value-oriented investors seeking exposure to undervalued small-cap equities.
moderate - The fund's beta is expected to be around 1.2, reflecting higher volatility compared to large-cap indices.
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