fvsc.htm

497K 1 fvsc.htm FOREIGN VALUE SMALL CAP FUND SUMMARY PROSPECTUS 8.1.2012 fvsc.htm

Pear Tree Funds

Summary Prospectus August 1, 2012

Pear Tree Polaris Foreign Value Small Cap Fund Ordinary Shares: QUSOX Institutional Shares: QUSIX

Before you invest, you may want to review the Fund’s prospectus, which contains more informa- tion about the Fund and its risks. You can ﬁnd the Fund’s prospectus and other information about the Fund online at www.pear treefunds.com. You may also obtain this information at no cost by calling 1-800-326-2151 or by sending an email request to info@peartreefunds.com.

The current prospectus and statement of additional information dated August 1, 2012 are incorporated by reference into this summary prospectus.

Investment Objective: Long-term growth of capital and income.

Fee Table and Expenses of Foreign Value Small Cap Fund

This table describes the fees and expenses that you may pay if you buy and hold shares of

Foreign Value Small Cap Fund.


Management Fees	Ordinary Shares 1.00%	Institutional Shares 1.00%
Distribution (12b-1) Fees	0.25%	None
Other Expenses	(0.45)%	(0.43)%
Total Annual Fund Operating Expenses	1.70%	1.43%
Example

Management Fees	Ordinary Shares 1.00%	Institutional Shares 1.00%
Distribution (12b-1) Fees	0.25%	None
Other Expenses	(0.45)%	(0.43)%
Total Annual Fund Operating Expenses	1.70%	1.43%
Example

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

This example is intended to help you compare the cost of investing in Foreign Value Small Cap

Fund with the cost of investing in other mutual funds. The Example assumes that you invest

$10,000 in Foreign Value Small Cap Fund for the time periods indicated and then redeem all of

your shares at the end of those periods. The Example also assumes that your investment has a

5 percent return each year and that Foreign Value Small Cap Fund’s operating expenses remain

the same as set forth in the table above. Although your actual costs may be higher or lower,

based on these assumptions your costs would be:

	1 year	3 years	5 years	10 years
Ordinary Class	$173	$536	$923	$2,009
Institutional Class	$146	$452	$782	$1,713
Portfolio Turnover

Foreign Value Small Cap Fund pays transaction costs, such as commissions, when it buys and

sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate

higher transaction costs and may result in higher taxes when Fund shares are held in a taxable

account. These costs, which are not reﬂected in annual fund operating expenses or in the ex-

ample, affect Foreign Value Small Cap Fund’s performance. During the most recent ﬁscal year,

Foreign Value Small Cap Fund’s portfolio turnover rate was 22 percent of the average value of

its portfolio.

Principal Investment Strategies

Under normal market conditions, Foreign Value Small Cap Fund invests at least 80 percent of its net assets (plus borrowings for investment purposes) in common stock, warrants, and rights derivative of or convertible into common stocks, in each case issued by foreign markets

issuers. Foreign Value Small Cap Fund deﬁnes a foreign markets issuer to be an issuer that derives at least 50 percent of its gross revenues or proﬁts from goods or services produced in non-U.S. markets or from sales made in non-U.S. markets. Foreign Value Small Cap Fund gener- ally will be invested in issuers in ten or more foreign countries. Foreign Value Small Cap Fund considers a small-cap company to be a company having a market capitalization at time of purchase between $50 million to $2 billion.

Foreign Value Small Cap Fund’s sub-adviser uses a three-step investment decision making pro- cess, with the objective to identify companies with the most under valued streams of sustain- able cash ﬂow. First, it employs proprietary quantitative investment technology to evaluate data, such as cash ﬂow and interest rates, to produce a ranking of country and industry sec- tors. Second, it uses traditional valuation criteria to regularly screen a database of more than

16,000 companies worldwide to identify a pool of approximately 250 or more securities with the greatest potential for undervalued streams of sustainable cash ﬂow or assets. Third, the sub-adviser conducts rigorous fundamental research on the pool of companies identiﬁed by the ﬁrst two steps of the investment process. The sub-adviser also maintains a “watch-list” of com- panies which may be used if the valuation of a company held in Foreign Value Small Cap Fund’s portfolio falls below established limits.

Foreign Value Small Cap Fund’s sub-adviser may utilize options. The extent of the sub-adviser’s use of options may vary over time based on the sub-adviser’s assessment of market conditions and other factors. Foreign Value Small Cap Fund may also buy and sell for ward foreign currency exchange contracts in connection with its investments.

Foreign Value Small Cap Fund may invest in other derivatives, that is, a security or instrument whose value is determined by reference to the value or the change in value of one or more secu- rities, currencies, indices or other ﬁnancial instruments. Foreign Value Small Cap Fund also

may lend its securities. Foreign Value Small Cap Fund may hold cash, or it may manage its cash by investing in cash equivalents and money market funds. Foreign Value Small Cap Fund also may take temporary defensive positions that are inconsistent with its principal investment strategies.

Principal Investment Risks

It is possible to lose money by investing in Foreign Value Small Cap Fund. An investment in Foreign Value Small Cap Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Market, Industry and Speciﬁc Holdings. The share price of Foreign Value Small Cap Fund may fall because of weakness in the stock markets, generally, weaknesses with respect to a par- ticular industry in which Foreign Value Small Cap Fund has signiﬁcant holdings, or weaknesses associated with one or more speciﬁc companies in which Foreign Value Small Cap Fund may have substantial investments.

Foreign Investing. Foreign Value Small Cap Fund’s investments in foreign securities (including ADRs) may be adversely affected by political and economic conditions overseas, reduced liquid- ity, or decreases in foreign currency values relative to the U.S. dollar. These risks are especially acute for emerging markets securities.

Value Stock Investing. A value investment style periodically comes into and falls out of favor with investors. Value stocks generally carry the risk that the market will not recognize their intrinsic value or that they are actually appropriately priced at a low level.

Small-Capitalization Securities. Investments in small-capitalization companies typically present greater risks than investments in larger companies and, as a result, the performance of Foreign Value Small Cap Fund may be more volatile than a fund that invests only in large- and mid-cap stocks.

Liquidity Risk. Foreign Value Small Cap Fund may not be able to sell some or all of its securities at desired prices or may be unable to sell the securities at all.

Active Management Risk. The sub-adviser’s judgments about the attractiveness, value, or potential appreciation of Foreign Value Small Cap Fund’s investments may prove to be incorrect.

Non-Diversiﬁcation. Foreign Value Small Cap Fund is “non-diversiﬁed”, which means that it may invest a higher percentage of its assets in a smaller number of issuers. As a result, a decline in the value of the securities of one issuer could have a signiﬁcant negative ef fect on Foreign Value Small Cap Fund.

Sector. Foreign Value Small Cap Fund may have signiﬁcant investments in one or more speciﬁc industry sectors, subjecting it to risks greater than general market risk.

Securities Lending. Securities lending involves two primary risks: investment risk and borrower default risk. Investment risk is the risk that Foreign Value Small Cap Fund will lose money from the investment of the cash collateral received from the borrower. Borrower default risk is the risk that Foreign Value Small Cap Fund will lose money due to the failure of a borrower to return a borrowed security in a timely manner.

Derivatives. Foreign Value Small Cap Fund’s investments in currency futures, options and other derivative instruments are subject to a number of risks, such as counterparty risk, the risk of mispricing or improper valuation, and the risk that the value of the instrument may not increase or decrease as expected.

Please refer to “Fund Objectives, Strategies and Risks” in the Prospectus for further details.

Performance

The following bar charts and tables indicate some of the risks of investing in Foreign Value Small Cap Fund by showing changes in Foreign Value Small Cap Fund’s performance over time (Foreign Value Small Cap Fund commenced operations on May 1, 2008, therefore only two calendar years of performance is reported). The tables also compare Foreign Value Small Cap Fund’s performance to a broad measure of market performance that reﬂects the type of securities in which Foreign Value Small Cap Fund invests. Of course, past performance does not necessarily indicate how Foreign Value Small Cap Fund will perform (before and after taxes) in the future. Updated performance information is available at www.peartreefunds.com.

Annual Return Ordinary Class (Calendar year ended December 31) Returns for Institutional Shares will dif fer from the Ordinary Share returns due to differences in expenses between the classes.

2009	2010	2011
83.13%	20.70%	-20.02%

Calendar year-to-date return of the Ordinary Shares of Foreign Value Small Cap Fund as of

6/30/2012 is 8.17%

Best Quarter:	Q2 2009	53.73
Worst Quarter:	Q4 2008	–28.49

Average Annual Total Returns for the periods ended December 31, 2011

Life of the Fund

1 Year

Since May 1, 2008

Ordinary Shares Before Taxes (20.02)% (1.66)% Ordinary Shares After Taxes on Distributions (21.30)% (2.29)% Ordinary Shares After Taxes on Distributions

and Sale of Fund Shares (10.87)% (1.32)%

Institutional Shares Before Taxes (19.86)% (1.46)% S&P EPAC Index (14.38)% (5.50)%

After-tax returns. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reﬂect the impact of state or local taxes. Actual after-tax returns may dif fer depending on your individual circumstances and may dif fer from those shown. The after-tax returns shown are not relevant if you hold your shares in a retire- ment account or in another tax-deferred arrangement. After-tax returns are shown only for Ordinary Shares and after-tax returns for Institutional Shares may vary. Actual after-tax returns may dif fer depending on your individual circumstances.

Management

Foreign Value Small Cap Fund is managed by Pear Tree Advisors, Inc. Foreign Value Small Cap Fund is sub-advised by Polaris Capital Management, LLC (“Polaris”). The following employees of Polaris serve as the portfolio managers of Foreign Value Small Cap Fund:

Investment Team Position at Polaris

Manager of the

Fund Since

Bernard R. Horn, Jr. President and Chief Investment Ofﬁcer2008

Sumanta Biswas, CFA Vice President and Assistant Portfolio Manager2008

Bin Xiao, CFA Assistant Portfolio Manager 2012

Buying and Selling Fund Shares

You may buy or sell shares of Foreign Value Small Cap Fund on any business day by contacting the Pear Tree Funds, through mail or by phone, or through your broker or ﬁnancial intermediary. Generally, purchase and redemption orders with respect to Fund shares are processed at the net asset value next calculated after an order is received.

Initial Investment Minimum Contact Information

Ordinary Class: $2,500 or

Ordinary Class Retirement Accounts: $1,000

Institutional Class: $1,000,000

Ongoing Investment Minimum

Both Classes: 50 shares

Tax Information

Mail: Pear Tree Funds

Attention: Transfer Agent

55 Old Bedford Road, Suite 202

Lincoln, MA 01773

Telephone: 1-800-326-2151

Website: www.pear treefunds.com

Foreign Value Small Cap Fund’s distributions may be taxable as ordinary income or capital gains, except when your investments is through an IRA, 401(k) or other tax-advantaged invest- ment plan. These tax-advantaged plans may be taxed at a later date based upon your individual circumstances.

Payments to Broker-Dealers and other Financial Intermediaries

If you purchase shares of Foreign Value Small Cap Fund through a broker-dealer or other ﬁnan- cial intermediary (such as a bank), Foreign Value Small Cap Fund and its related companies my pay the intermediary for the sale of Fund shares and related services. These payments may create a conﬂict of interest by inﬂuencing the broker-dealer or other intermediary and your salesperson to recommend Foreign Value Small Cap Fund over another investment. Ask your salesperson or visit your ﬁnancial intermediary’s internet site for more information.