STATEMENT OF ADDITIONAL INFORMATION

November 7, 2023

TABLE OF CONTENTS

SAI - 1

FUND HISTORY

The Trust was established in 1983 as a business trust under Massachusetts law. A copy of the Second Amended and Restated Declaration of Trust dated May 25, 2011, as amended, is on file with the Secretary of the Commonwealth of the Commonwealth of Massachusetts. The Trust was originally called “The Quantitative Group of Funds” and it did business under the name “Quant Funds.”

Each Pear Tree Fund identified on the cover page of this SAI is a series of the Trust.

Pear Tree Polaris Small Cap Fund “Small Cap Fund” (formerly Pear Tree Columbia Small Cap Fund)

Pear Tree Essex Environmental Opportunities Fund “Environmental Opportunities Fund”

Pear Tree Polaris International Opportunities Fund “International Opportunities Fund”  (formerly Pear Tree PNC International Small Cap Fund)

Otherwise, terms capitalized in this SAI but not defined herein have the same meanings as in the Prospectus.

SAI - 2

INVESTMENT POLICIES, RISKS AND RESTRICTIONS

(a)

Securities and Other Instruments, Other Than Derivatives

​

Equity Securities

Fixed Income Securities

Interest Rate Risk - the risk that rates will rise causing the value of the instrument to fall, credit risk, that is, the risk that an issuer, guarantor or liquidity provider of an instrument held by the fund will fail to make scheduled interest or principal payments, which may reduce the Pear Tree Fund’s income and the market value of, the instrument.

Credit Risk - The risk that the issuer of the fixed income security, and if guaranteed, the guarantor of the security, will default on its obligation to pay principal, interest or both. Generally, lower rated securities have a higher likelihood of defaulting than a higher rated security.

Prepayment Risk (when repayment of principal occurs before scheduled maturity) and Extension Risk (when rates of repayment of principal are slower than expected) — the risk that the holder may have to invest repayment proceeds in, or continue to hold, lower yielding securities, as the case may be.

SAI - 3

Liquidity Risk - the risk that the Pear Tree 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, because of a lack of demand in the market for such securities, or a liquidity provider defaults on its obligation to purchase the securities when properly tendered by the holder.

U.S. Government Obligations

Convertible Securities

Repurchase Agreements

SAI - 4

Reverse Repurchase Agreements

Investments in Other Collective Investment Funds

Real Estate Investment Trusts

SAI - 5

Section 4(2) Commercial Paper

Asset-Backed Securities

When-Issued Transactions

SAI - 6

Investment in Initial Public Offerings

Short Sales

SAI - 7

Special Situations

Illiquid Securities

(b)

Derivatives

​

Equity Swaps

Total Rate of Return Swaps

Interest Rate Swaps and Other Transactions

SAI - 8

Forward Commitments

Warrants

Options

Exchange Traded Options. 

SAI - 9

Writing Covered Call Options. The Pear Tree Funds are authorized to write (sell) covered call options on the securities in which they may invest and to enter into closing purchase transactions with respect to such options. Writing a call option obligates a Pear Tree Fund to sell or deliver the option’s underlying security, in return for the strike price, upon exercise of the option. By writing a call option, the Pear Tree Fund receives an option premium from the purchaser of the call option. Writing covered call options is generally a profitable strategy if prices remain the same or fall. Through receipt of the option premium, the Pear Tree Fund would seek to mitigate the effects of a price decline. By writing covered call options, however, the Pear Tree Fund gives up the opportunity, while the option is in effect, to profit from any price increase in the underlying security above the option exercise price. In addition, a Pear Tree Fund’s ability to sell the underlying security will be limited while the option is in effect unless the Pear Tree Fund effects a closing purchase transaction.

Purchasing Put Options. The Pear Tree Funds are authorized to purchase put options to hedge against a decline in the market value of their portfolio securities. By buying a put option a Pear Tree Fund has the right (but not the obligation) to sell the underlying security at the exercise price, thus limiting the Pear Tree Funds’ risk of loss through a decline in the market value of the security until the put option expires. The amount of any appreciation in the value of the underlying security will be partially offset by the amount of the premium paid by the Pear Tree Fund for the put option and any related transaction costs. Prior to its expiration, a put option may be sold in a closing sale transaction and profit or loss from the sale will depend on whether the amount received is more or less than the premium paid for the put option plus the related transaction costs. A closing sale transaction cancels out the Pear Tree Fund’s position as the purchaser of an option by means of an offsetting sale of an identical option prior to the expiration of the option it has purchased. The Pear Tree Funds will not purchase put options on securities (including stock index options) if as a result of such purchase, the aggregate cost of all outstanding options on securities held by a Pear Tree Fund would exceed 5% of the market value of its total assets.

Purchasing Call Options. The Pear Tree Funds are also authorized to purchase call options. The features of call options are essentially the same as those of put options, except that the purchaser of a call option obtains the right to purchase, rather than sell, the underlying instrument at the option’s strike price (call options on futures contracts are settled by purchasing the underlying futures contract). A Pear Tree Fund will purchase call options only in connection with “closing purchase transactions.” The Pear Tree Funds will not purchase call options on securities (including stock index options) if as a result of such purchase the aggregate cost of all outstanding options on securities held by a Pear Tree Fund would exceed 5% of the market value of its total assets.

SAI - 10

Restrictions on the Use of Futures Transactions. The purchase or sale of a futures contract differs from the purchase or sale of a security in that no price or premium is paid or received. Instead, an amount of cash or securities acceptable to the broker and the relevant contract market, which varies, but is generally about 5 percent of the contract amount, must be deposited with the broker. This amount is known as “initial margin” and represents a “good faith” deposit assuring the performance of both the purchaser and seller under the futures contract. Subsequent payments to and from the broker, called “variation margin,” are required to be made on a daily basis as the price of the futures contract fluctuates making the long and short positions in the futures contracts more or less valuable, a process known as “marking to market.” At any time prior to the settlement date of the futures contract, the position may be closed out by taking an opposite position which will operate to terminate the position in the futures contract. A final determination of variation margin is then made, additional cash is required to be paid to or released by the broker and the purchaser realizes a loss or gain. In addition, a nominal commission is paid on each completed sale transaction.

SAI - 11

Tree Fund will treat as illiquid such amount of the underlying securities as is equal to the repurchase price less the amount by which the option is “in-the-money” ​(current market value of the underlying security minus the option’s strike price). The repurchase price with primary dealers is typically a formula price which is generally based on a multiple of the premium received for the option plus the amount by which the option is “in-the-money.”

Risk Factors in Options, Futures and Forward Transactions. The use of options and futures involves the risk of imperfect correlation in movements in the price of options and futures and movements in the price of securities which are the subject of the hedge. If the price of the options or futures moves more or less than the price of hedged securities, a Pear Tree Fund will experience a gain or loss which will not be completely offset by movements in the price of the subject of the hedge. The successful use of options and futures also depends on the Sub-Adviser’s ability to correctly predict price movements in the market involved in a particular options or futures transaction. To compensate for imperfect correlations, a Pear Tree Fund may purchase or sell stock index options or futures contracts in a greater dollar amount than the hedged securities if the volatility of the hedged securities is historically greater than the volatility of the stock index options or futures contracts. Conversely, a Pear Tree Fund may purchase or sell fewer stock index options or futures contracts, if the historical price volatility of the hedged securities is less than that of the stock index options or futures contracts. The risk of imperfect correlation generally tends to diminish as the maturity date of the stock index option or futures contract approaches. Options are also subject to the risks of an illiquid secondary market, particularly in strategies involving writing options, which a Pear Tree Fund cannot terminate by exercise. In general, options whose strike prices are close to their underlying instruments’ current value will have the highest trading volume, while options whose strike prices are further away may be less liquid.

Certain Regulatory Aspects of Use of Futures and Options on Futures. Pear Tree Funds are operated by a person who has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act, as amended (“CEA”), and, therefore, is not subject to registration or regulation as a pool operator under the CEA.

SAI - 12

Regulation of Derivatives. SEC Rule 18f-4 (“Rule 18f-4” or the “Derivatives Rule”) regulates the ability of a Pear Tree Fund to enter into derivative transactions and other leveraged transactions. The Derivatives Rule defines the term “derivatives” to include short sales and forward contracts, such as TBA transactions, in addition to instruments traditionally classified as derivatives, such as swaps, futures, and options. Rule 18f-4 also regulates other types of leveraged transactions, such as reverse repurchase transactions and transactions deemed to be “similar to” reverse repurchase transactions, such as certain securities lending transactions in connection with which a Fund obtains leverage. Among other things, under Rule 18f-4, a mutual fund such as a Pear Tree Fund is prohibited from entering into these derivatives transactions except in reliance on the provisions of the Derivatives Rule. The Derivatives Rule establishes limits on the derivatives transactions that a mutual fund may enter into based on the value-at-risk (“VaR”) of the Fund inclusive of derivatives. A mutual fund will generally satisfy the limits under the Rule if the VaR of its portfolio (inclusive of derivatives transactions) does not exceed 200 percent of the VaR of its “designated reference portfolio.” The “designated reference portfolio” is a representative unleveraged index or a Fund’s own portfolio absent derivatives holdings, as determined by such mutual fund’s derivatives risk manager.

In addition, among other requirements, Rule 18f-4 requires a mutual fund relying on the Derivatives Rule to establish a derivatives risk management program, appoint a derivatives risk manager, and carry out enhanced reporting to the mutual fund’s board of directors, the SEC and the public regarding the mutual fund’s derivatives activities. These new requirements apply unless a mutual fund qualifies as a “limited derivatives user,” which the Derivatives Rule defines as a mutual fund that limits its derivatives exposure to 10 percent of its net assets, or does not use any derivatives. It is possible that the limits and compliance costs imposed by the Derivatives Rule may adversely affect a Pear Tree Fund’s performance, efficiency in implementing its strategy, liquidity and/or ability to pursue its investment objectives and may increase the cost of such Fund’s investments and cost of doing business, which could adversely affect investors. Currently, none of the Pear Tree Funds relies on the Derivatives Rule.

(c)

Foreign Securities, Instruments, Currencies and Transactions and Specific Risks

​

Participatory Notes

Each of Foreign Value Fund, Foreign Value Small Cap Fund, and International Opportunities Fund may invest in participatory notes. Participatory notes are offshore derivative instruments issued to foreign investors against underlying Indian securities which are not registered with the Securities and Exchange Board of India. The risks of investing in participatory notes are similar to those risks of investing in foreign securities in general. See “Principal Investment Risks” for each Fund in the Prospectus for a discussion of the risks of investing in foreign securities. Participatory notes function similarly to depositary receipts except that brokers, not U.S. banks, are depositories for Indian-based securities on behalf of foreign investors. Brokers buy Indian-based securities and then issue participatory notes to foreign investors. Any dividends or capital gains collected from the underlying securities are remitted to the foreign investors. However, unlike depositary receipts, participatory notes are subject to credit risk based on the uncertainty of the counterparty’s (i.e., the broker’s) ability to meet its obligations.

Opals

Depository Receipts

SAI - 13

Foreign Currency Transactions

Since investments in foreign companies will usually involve currencies of foreign countries, and since each of Foreign Value Fund, Foreign Value Small Cap Fund, and International Opportunities Fund may temporarily hold funds in bank deposits in foreign currencies during the completion of investment programs, the value of the assets of these Pear Tree Funds as measured in U.S. dollars may be affected favorably or unfavorably by changes in foreign currency exchange rates and exchange control regulations, and the Pear Tree Funds may incur costs in connection with conversions between various currencies. Each of Foreign Value Fund, Foreign Value Small Cap Fund, and International Opportunities Fund will conduct foreign currency exchange transactions either on a spot (i.e., cash) basis at the spot rate prevailing in the foreign currency exchange market, or through entering into forward contracts to purchase or sell foreign currencies. Each of Foreign Value Fund, Foreign Value Small Cap Fund, and International Opportunities Fund will generally not enter into a forward contract with a term of greater than one year.

SAI - 14

Eurodollar Certificates of Deposit (ECDs), Eurodollar Time Deposits (ETDs) and Yankee Certificates of Deposit (YCDs)

Events Causing Significant Market Volatility

SAI - 15

In addition, relatively high market volatility and reduced liquidity in credit and fixed-income markets may adversely affect many issuers worldwide. Actions taken by the U.S. Federal Reserve or foreign central banks to stimulate or stabilize economic growth, such as interventions in currency markets, could cause high volatility in the equity and fixed-income markets. Reduced liquidity may result in less money being available to purchase raw materials, goods, and services from emerging markets, which may, in turn, bring down the prices of these economic staples. It may also result in emerging-market issuers having more difficulty obtaining financing, which may, in turn, cause a decline in their securities prices.

Uncertainties surrounding the sovereign debt of a number of EU countries and the viability of the EU have disrupted and may in the future disrupt markets in the U.S. and around the world. If one or more countries leave the EU or the EU dissolves, the world’s securities markets likely will be significantly disrupted. On January 31, 2020, the UK left the EU, commonly referred to as “Brexit,” and there commenced a transition period during which the EU and UK will negotiate and agree on the nature of their future relationship. There is significant market uncertainty regarding Brexit’s ramifications, and the range and potential implications of possible political, regulatory, economic, and market outcomes are difficult to predict. This uncertainty may affect other countries in the EU and elsewhere, and may cause volatility within the EU, triggering prolonged economic downturns in certain countries within the EU. In addition, Brexit may create additional and substantial economic stresses for the UK, including a contraction of the UK economy and price volatility in UK stocks, decreased trade, capital outflows, devaluation of the British pound, wider corporate bond spreads due to uncertainty and declines in business and consumer spending as well as foreign direct investment. Brexit may also adversely affect UK-based financial firms that have counterparties in the EU or participate in market infrastructure (trading venues, clearing houses, settlement facilities) based in the EU. These events and the resulting market volatility may have an adverse effect on the performance of a Pear Tree Fund.

SAI - 16

(d)

Defensive Strategies & Liquidity

​

Each Pear Tree Fund may invest in cash, cash equivalents, and short-term debt obligations for defensive purposes, as well as for liquidity purposes (e.g., for redemption of shares, to pay expenses or pending other investments). Short-term debt obligations may include obligations of the U.S. government and (in the case of Foreign Value Fund, Foreign Value Small Cap Fund, and International Opportunities Fund securities of foreign governments). Short-term debt obligations may also include certificates of deposit and bankers’ acceptances issued by U.S. banks (and, in the case of Foreign Value Fund, Foreign Value Small Cap Fund, and International Opportunities Fund foreign banks) having deposits in excess of $2 billion, commercial paper, short-term corporate bonds, debentures and notes and repurchase agreements, all with one year or less to maturity. Investments in commercial paper are limited to obligations (i) rated Prime-1 by Moody’s Investors Service, Inc. (“Moody’s”) or A-1 by S&P, or in the case of any instrument that is not rated, of comparable quality as determined by the Manager or the Pear Tree Fund’s Sub-Adviser, or (ii) issued by companies having an outstanding debt issue currently rated Aaa or Aa by Moody’s or AAA or AA by S&P. Investments in other corporate obligations are limited to those having maturity of one year or less and rated Aaa or Aa by Moody’s or AAA or AA by S&P. The value of fixed-income securities may fluctuate inversely in relation to the direction of interest rate changes.

(e)

Portfolio Turnover

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*

Portfolio turnover rate for the fiscal period September 1, 2021 - March 31, 2022

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(f)

Description of Benchmark Indices.

​

SAI - 17

2000 Index is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set. Russell 2000 Index and Russell 3000 Index are registered trademarks of FTSE Russell.

Quality Fund measures its performance against the S&P 500 Index®. The S&P 500 includes 500 leading companies in leading industries of the U.S. economy. Although the S&P 500 focuses on the large cap segment of the market, with approximately 75 percent coverage of U.S. equities, it is serves as a proxy for the total market. The S&P 500 is part of a series of S&P U.S. indices that have been used as building blocks for portfolio construction. S&P 500 is maintained by the S&P Index Committee, a team of Standard & Poor’s economists and index analysts, who meet on a regular basis. The Index Committee also monitors constituent liquidity to ensure efficient portfolio trading while keeping index turnover to a minimum. S&P 500 Index is a registered trademark of Standard & Poor’s Financial Services LLC or its subsidiaries.

Environmental Opportunities Fund measures its performance against the MSCI World Index®. The MSCI World Index is free float-adjusted market capitalization index that is designed to measure equity market performance of large- and mid-cap equity across 23 developed markets countries. As of June 30, 2023, the countries represented in the MSCI World Index were Austria, Australia, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, Norway, New Zealand, Portugal, Singapore, Spain, Sweden, Switzerland, United Kingdom, and the United States.

Foreign Value Fund measures its performance against the MSCI EAFE® Index. The MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. As of June 30, 2023, the countries represented in the MSCI EAFE Index were Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the United Kingdom.

Foreign Value Small Cap Fund measures its performance against the MSCI ACWI® ex USA Small Cap Index, which captures small-cap representation across 22 developed markets and 24 emerging market countries, and covers approximately 14 percent of the global equity opportunity set outside of the U.S. As of June 30, 2023, countries with developed markets represented in the MSCI ACWI ex USA Small Cap were Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the United Kingdom, and countries with emerging markets represented were Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.

International Opportunities Fund measures its performance against the MSCI ACWI® ex USA Index, which captures large- and mid-cap representation across 22 of the 23 developed markets (i.e., it does not include the U.S.) and 24 emerging markets countries. The index purposes to cover approximately 85 percent of the global equity opportunity set outside of the U.S. As of June 30, 2023, countries with developed markets represented in the MSCI ACWI ex USA Index were Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the United Kingdom, and countries with emerging markets represented were Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.

MSCI Emerging Markets Index, MSCI EAFE Index, MSCI World Index and MSCI ACWI Index are registered trademarks or service marks of MSCI Inc. or its subsidiaries.

(g)

Diversification Policy

​

SAI - 18

Environmental Opportunities Fund is classified as a diversified company. Each of the other Pear Tree Funds is a non-diversified company. If a Pear Tree Fund that is a diversified company sought to change its classification to a non-diversified company, the 1940 Act requires that that Pear Tree Fund’s shareholders approve such reclassification.

SAI - 19

INVESTMENT RESTRICTIONS OF THE PEAR TREE FUNDS

Fundamental Investment Restrictions.

67 percent or more of the shares represented at a meeting, if the holders of more than 50 percent of the outstanding shares are present in person or by proxy, or

More than 50 percent of the outstanding shares of the Pear Tree Fund.

Pear Tree Quality Fund and Pear Tree Polaris Foreign Value Small Cap Fund

Issue senior securities, except to the extent permitted by applicable law, as amended and interpreted or modified from time to time by any regulatory authority having jurisdiction;

Borrow money, except on a temporary basis and except to the extent permitted by applicable law, as amended and interpreted or modified from time to time by any regulatory authority having jurisdiction;

Act as an underwriter, except insofar as the Fund technically may be deemed to be an underwriter in connection with the purchase or sale of its portfolio securities;

Make loans, except that the Fund may (i) lend portfolio securities in accordance with the Fund’s investment policies, (ii) enter into repurchase agreements, (iii) purchase all or a portion of an issue of publicly distributed debt securities, bank loan participation interests, bank certificates of deposit, bankers’ acceptances, debentures or other securities, whether or not the purchase is made upon the original issuance of the securities, (iv) participate in a credit facility whereby the Fund may directly lend to and borrow money from other affiliated Funds to the extent permitted under the 1940 Act or an exemption therefrom, and (v) make loans in any other manner consistent with applicable law, as amended and interpreted or modified from time to time by any regulatory authority having jurisdiction;

Invest in commodities or commodity contracts, except that the Fund may invest in currency instruments and currency contracts and financial instruments and financial contracts that might be deemed to be commodities and commodity contracts in accordance with applicable law.

SAI - 20

Pear Tree Essex Environmental Opportunities Fund

Borrow money, except (a) from a bank, provided that immediately after such borrowing there is an asset coverage of 300 percent for all borrowings of Environmental Opportunities Fund; or (b) from a bank or other persons for temporary purposes only, provided that such temporary borrowings are in an amount not exceeding 5 percent of Environmental Opportunities Fund’s total assets at the time when the borrowing is made. This limitation does not preclude Environmental Opportunities Fund from entering into reverse repurchase transactions, provided that Environmental Opportunities Fund has an asset coverage of 300 percent for all borrowings and repurchase commitments of Environmental Opportunities Fund pursuant to reverse repurchase transactions.

Issue senior securities. This limitation is not applicable to activities that may be deemed to involve the issuance or sale of a senior security by Environmental Opportunities Fund, provided that Environmental Opportunities Fund’s engagement in such activities is consistent with or permitted by the Investment Company Act of 1940, the rules and regulations promulgated thereunder or interpretations of the SEC or its staff.

Act as underwriter of securities issued by other persons. This limitation is not applicable to the extent that, in connection with the disposition of portfolio securities (including restricted securities), Environmental Opportunities Fund may be deemed an underwriter under certain federal securities laws.

Purchase or sell commodities unless acquired as a result of ownership of securities or other investments. This limitation does not preclude Environmental Opportunities Fund from purchasing or selling options or futures contracts, including commodities futures contracts, from investing in securities or other instruments backed by commodities or from investing in companies which are engaged in a commodities business or have a significant portion of their assets in commodities.

SAI - 21

Pear Tree Polaris Small Cap Fund and Pear Tree Polaris Foreign Value Fund

Purchase any security if as a result a Fund would then hold more than 10 percent of any class of securities of an issuer (taking all common stock issues of an issuer as a single class, all preferred stock issues as a single class, and all debt issues as a single class) or more than 10 percent of the outstanding voting securities of an issuer;

Purchase any security if as a result any Fund would then have more than 10 percent of the value of its net assets (taken at current value) invested in any of the following types of investment vehicles: in securities of companies (including predecessors) less than three years old, in securities which are not readily marketable, in securities which are subject to legal or contractual restrictions on resale (“restricted securities”) and in repurchase agreements which have a maturity longer than seven (7) days, provided, however, that no Fund may invest more than 15 percent of its assets in illiquid securities;

Make short sales of securities or maintain a short position unless at all times when a short position is open the particular Fund owns an equal amount of such securities or securities convertible into, or exchangeable without payment of any further consideration for, securities of the same issue as, and equal in amount to, the securities sold short, and unless not more than 10 percent of the Fund’s net assets (taken at current value) is held as collateral for such sales at any one time. Such sales of securities subject to outstanding options would not be made. A Fund may maintain short positions in a stock index by selling futures contracts on that index;

Issue senior securities, borrow money or pledge its assets except that a Fund may borrow from a bank for temporary or emergency purposes in amounts not exceeding 10 percent (taken at the lower of cost or current value) of its total assets (not including the amount borrowed) and pledge its assets to secure such borrowings. A Fund will not purchase any additional portfolio securities so long as its borrowings amount to more than 5 percent of its total assets;

Purchase or retain securities of any company if, to the knowledge of the Funds, officers and Trustees of the Funds or of the Manager or of the Sub-Adviser of the particular Funds who individually own more than ½ of 1 percent of the securities of that company together own beneficially more than 5 percent of such securities;

Buy or sell real estate or interests in real estate, although it may purchase and sell securities which are secured by real estate and securities of companies which invest or deal in real estate;

Participate on a joint or joint and several basis in any trading account in securities;

Write, purchase, or sell puts, calls or combinations thereof, except that the Fund may (i) write covered call options with respect to all of its portfolio securities; (ii) purchase put options and call options on widely recognized securities indices, common stock of individual companies or baskets of individual companies in a particular industry or sector; (iii) purchase and write call options on stock index futures and on stock indices; (iv) sell and purchase such options to terminate existing positions;

Make loans, except (i) through the purchase of bonds, debentures, commercial paper, corporate notes and similar evidences of indebtedness of a type commonly sold privately to financial institutions, (ii) through repurchase agreements and loans of portfolio securities (limited to 30 percent of the value of a Fund’s total assets). The purchase of a portion of an issue of such securities distributed publicly, whether or not such purchase is made on the original issuance, is not considered the making of a loan;

Invest in commodities or commodity contracts or in puts, calls, or combinations of both, except interest rate futures contracts, options on securities, securities indices, currency and other financial instruments, futures contracts on securities, securities indices, currency and other financial instruments and options on such futures contracts, forward foreign currency exchange contracts, forward commitments, securities index put or call warrants and repurchase agreements entered into in accordance with the fund’s investment policies.

SAI - 22

Pear Tree Polaris International Opportunities Fund

Issue senior securities, except to the extent permitted by applicable law, as amended and interpreted or modified from time to time by any regulatory authority having jurisdiction;

Borrow money, except on a temporary basis and except to the extent permitted by applicable law, as amended and interpreted or modified from time to time by any regulatory authority having jurisdiction;

Act as an underwriter, except insofar as International Opportunities Fund technically may be deemed to be an underwriter in connection with the purchase or sale of its portfolio securities;

Make loans, except that International Opportunities Fund may (i) lend portfolio securities in accordance with the Fund’s investment policies, (ii) enter into repurchase agreements, (iii) purchase all or a portion of an issue of publicly distributed debt securities, bank loan participation interests, bank certificates of deposit, bankers’ acceptances, debentures or other securities, whether or not the purchase is made upon the original issuance of the securities, (iv) participate in a credit facility whereby International Opportunities Fund may directly lend to and borrow money from other affiliated Funds to the extent permitted under the 1940 Act or an exemption therefrom, and (v) make loans in any other manner consistent with applicable law, as amended and interpreted or modified from time to time by any regulatory authority having jurisdiction;

Invest in commodities or commodity contracts, except that International Opportunities Fund may invest in currency instruments and currency contracts and financial instruments and financial contracts that might be deemed to be commodities and commodity contracts in accordance with applicable law.

The following statements are not part of the investment restriction.

SAI - 23

TRUSTEES AND OFFICERS OF THE TRUST; FUND GOVERNANCE

Trustees who are not Interested Persons of the Trust

Trustees and Officers who are Interested Persons of the Trust

SAI - 24

SAI - 25

Notes:

Mr. Umphrey is an “interested person” ​(as defined in the 1940 Act) of the Trust. Mr. Umphrey has been determined to be an “Interested Trustee” by virtue of, among other things, his affiliation with the Manager and the Pear Tree Funds’ distributor, U.S. Boston Capital Corporation (“Distributor”).

Leadership Structure, Qualifications and Responsibilities of the Trustees of the Trust

Leadership Structure and the Board of Trustees.  

The Trustees have determined that there are to be five Trustees, although the Trustees are authorized to increase or decrease such number. Currently, the Trust has four Trustees and one vacancy. Of the four current Trustees, three Trustees are not “interested persons” of any Pear Tree Fund, as that term is defined in the 1940 Act (each, an “Independent Trustee”). The other Trustee is affiliated with each of the Manager and the Distributor. The vacancy is as a result of the retirement of one Trustee, which took effect as of December 31, 2022.

SAI - 26

Oversight of Risk.  

Audit Committee.  

The purpose of the Audit Committee is to oversee generally the Trust’s accounting and financial reporting policies and practices, internal controls and, as appropriate, the internal controls of certain service providers; to oversee generally the quality and objectivity of financial statements and the independent audit thereof; recommend to the Trustees the appointment and/or replacement of the independent registered public accounting firm (the “Auditor”) for the Trust; and to act as a liaison between the Auditor and all of the Trustees. The Audit Committee comprises all of the Independent Trustees. Mr. Marshall is the Chairman of the Audit Committee. In performing its oversight function the Audit Committee has, among other things, specific power and responsibility to: (a) oversee the Trust’s accounting and financial reporting policies and practices, internal control over the Trust’s financial reporting and, as appropriate, the internal control over financial reporting of service providers; (b) oversee the quality and objectivity of the Trust’s financial statements and the independent audit thereof; (c) approve the terms of the engagement of the Trust’s independent auditors and, in connection therewith, to review and evaluate the qualifications, independence and performance of the Trust’s independent registered public accounting firm; and (d) act as a liaison between the Auditor and the Trustees.

Trustees’ Qualifications and Experience.  

SAI - 27

John M. Bulbrook. Mr. Bulbrook has served as a Trustee since 1985. He serves as the current Lead Independent Trustee. Mr. Bulbrook has more than 30 years of experience in the insurance and risk management industry, including serving as chief executive officer of a distributor of insurance products.

Clinton S. Marshall. Mr. Marshall has served as a Trustee since 2003. He currently serves as the Chairman of the Audit Committee. Mr. Marshall has over 30 years of business and financial experience, including time as Chief Financial Officer. Through his company Mr. Marshall serves as the chief financial officer and in other financial capacities for a number of startup and more established businesses throughout northern New England. Additionally, Mr. Marshall has also served on the board of directors of other corporations.

Willard L. Umphrey. Mr. Umphrey has served as a Trustee since 1985. He is the President of the Manager and a director of the Distributor.

Trustee Compensation

SAI - 28

COMPENSATION TABLE

for the fiscal year ended March 31, 2023

*

Mr. Armstrong retired as of December 31, 2022.

​

At June 30, 2023, the Trustees and officers as a group owned in the aggregate the following percentages of outstanding Ordinary Shares, Institutional Shares and R6 Shares.

SAI - 29

TRUSTEE SHARE OWNERSHIP TABLE

For the Calendar Year ended December 31, 2022

INDEPENDENT TRUSTEES:

*

Mr. Armstrong retired as of December 31, 2022.

​

INTERESTED TRUSTEE:

SAI - 30

PRINCIPAL SHAREHOLDERS

SAI - 31

SAI - 32

SAI - 33

SAI - 34

SAI - 35

THE MANAGER AND THE SUB-ADVISERS

The Manager

The Management Contract

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As compensation for services rendered, each Pear Tree Fund, other than Small Cap Fund, Environmental Opportunities Fund, and International Opportunities Fund, pays the Manager a monthly management fee at the annual rate of 1.00 percent of the average daily net assets. As compensation for services rendered, Small Cap Fund pays the Manager a monthly management fee at an annual rate of 0.80 percent of average daily net assets and Environmental Opportunities Fund and International Opportunities Fund pays the Manager a monthly management fee at an annual rate of 0.90 percent of average daily net assets.

(1)

Includes waiver by the Manager of its management fee in the amount of $476,341 for fiscal year 2021, $727,253 for fiscal year 2022, and $577,153 for the fiscal year 2023.

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(2)

Includes waiver by the Manager of its management fee in the amount of $41,227 for the fiscal period (September 1, 2021- March 31, 2022) and $71,020 for fiscal year 2023.

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(3)

Includes waiver by the Manager of its management fee in the aggregate amount of $3,311,391 for fiscal year 2021, $4,334,611 for fiscal year 2022, and $3,498,963 for the fiscal year 2023

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(4)

Includes waiver by the Manager of its management fee in the aggregate amount of $724,985 for fiscal year 2021, $1,174,666 for fiscal year 2022, and $1,021,414 for the fiscal year 2023.

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Fee Waivers/Expense Limitations.

Pear Tree Quality Fund  

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Pear Tree Essex Environmental Opportunities Fund 

The Manager has contractually agreed until July 31, 2024 to reimburse such portion of the expenses of the Essex Environmental Opportunities Fund attributable to Ordinary Shares such that “Total Annual Fund Operating Expenses after Fee Waiver and/or Expense Reimbursement” with respect to Ordinary Shares, Institutional Shares and R6 Shares, excluding AFFE and extraordinary expenses, is not greater than 1.24 percent of the Fund’s net assets attributable to Ordinary Shares, 0.99 percent of the Fund’s net assets attributable to Institutional Shares, and 0.95 percent of the Fund’s net assets attributable to R6 Shares.

Pear Tree Polaris Small Cap Fund  

The Manager is contractually obligated to assume expenses of Pear Tree Polaris Small Cap Fund, if necessary, in order to reduce its total expenses to no more than 2.00 percent of average daily net assets for any fiscal year. This agreement limits expenses at the fund level and not at the individual share class level. Accordingly, the fees of any individual class may be higher than the expense limitation because the expense limit calculation adds the expenses of the different classes together and then divides that number by the total average net assets of the Pear Tree Fund. Expenses eligible for reimbursement under all applicable expense limitations do not include interest, taxes, brokerage commissions or extraordinary expenses. As a result, and as indicated above, total expenses may be higher than the expense limitation applicable for the Pear Tree Fund. No such reductions in compensation were necessary for the fiscal year ended March 31, 2023.

Pear Tree Polaris Foreign Value Fund; Pear Tree Polaris Foreign Value Small Cap Fund  

For the fiscal year ended March 31, 2023, the Manager waived its management fee and reimbursed Foreign Value Fund and Foreign Value Small Cap Fund for its expenses in the aggregate amount of $3,908,440 and $1,021,414, respectively.

Pear Tree Polaris Foreign Value Fund 

The Manager has contractually agreed until July 31, 2024 to reimburse such portion of the expenses of Foreign Value Fund attributable to R6 Shares such that “Total Annual Fund Operating Expenses after Fee Waiver and/or Expense Reimbursement” with respect to R6 Shares, other than extraordinary expenses, is not greater than 0.94 percent of Foreign Value Fund’s net assets attributable to R6 Shares. This expense reimbursement agreement only may be terminated with the approval of the Trustees.

Pear Tree Polaris International Opportunities Fund 

The Manager has contractually agreed until September 30, 2024 to waive such portion of the management fees that it would otherwise receive under its agreement with Pear Tree Funds for serving as investment manager to International Opportunities Fund such that the aggregate management fee that the Manager would receive during the waiver period for serving as the investment manager of International Opportunities Fund would be calculated using an annual rate of 0.80 percent of International Opportunities Fund’s net assets. This fee waiver only may be terminated with the approval of the Trustees.

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Expenses” attributable to Institutional Shares for that year, Adjusted “Annual Fund Operating Expenses” for a year means all International Opportunities Fund operating expenses for the year, other than management fees, distribution and services fees, AFFE and extraordinary expenses. This fee waiver only may be terminated with the approval of the Trustees.

The Manager has contractually agreed until September 30, 2024 to reimburse such portion of the expenses of International Opportunities Fund attributable to R6 Shares such that “Total Annual Fund Operating Expenses after Fee Waiver and/or Expense Reimbursement” with respect to R6 Shares, other than extraordinary expenses, is not greater than 0.99 percent of International Opportunities Fund’s net assets attributable to R6 Shares. This expense reimbursement agreement does not permit the Manager to recoup any amounts reimbursed by the Manager, and it only may be terminated with the approval of the Trustees.

Each of these waiver/expense reimbursement agreements took effect on August 1, 2023. As a result, the Manager did not waive any fees under these agreements during the fiscal year ended 2023.

All Funds 

For the fiscal year ended March 31, 2023, with respect to all Pear Tree Funds currently offering and selling shares, the Manager waived fees in the aggregate amount of $3,982,844, and with respect to all Pear Tree Funds that offered and sold shares during such fiscal year (that is, including Emerging Markets Fund), the Manager waived fees in the aggregate amount of $3,989,093.

No Recoupment 

With respect to each expense reimbursement or fee waiver agreement described above, the Manager does not have a right to recoup from the applicable Pear Tree Fund, with the exception of Pear Tree Essex Environmental Opportunities Fund, amounts that it has waived or reimbursed under that agreement.

Recoupment 

The Manager has the right to recoup from Environmental Opportunities Fund amounts for certain expenses reimbursed by the Sub-adviser for the benefit of Environmental Opportunities Fund’s predecessor fund. Pursuant to Environmental Opportunities Fund’s expense reimbursement agreement, if the actual amount of Environmental Opportunities Fund expenses attributable to Institutional Shares and/or R6 Shares, determined as a percentage of Environmental Opportunities Fund’s net assets attributable to such share class, are less than the amount of Environmental Opportunities Fund expenses determined using the percentage reimbursement caps applicable to the Fund share classes, the Manager may recoup an amount up to the amount of such difference, provided that the amount of recoupment may not exceed the recoupment amounts due to the Sub-adviser from the predecessor fund, and the amount of recoupment does not cause Environmental Opportunities Fund’s expenses to exceed the percentage reimbursement caps applicable to the Fund share classes. In addition, the Manager shall not be entitled to any recoupment of reimbursed expenses at any time three years after such expenses had been reimbursed, and the Manager assigns its right to recoupment under Environmental Opportunities Fund’s expense reimbursement agreement to the Sub-adviser. The maximum amount that may be recouped by the Manager through August 31, 2023 is $195,335, and through August 31, 2024 is $145,592. No amounts were recouped by the Manager in the fiscal year ended March 31, 2023.

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The Sub-Advisers

Pear Tree Quality Fund  

Pear Tree Essex Environmental Opportunities Fund  

Essex Investment Management Company, LLC, located at 125 High Street, 18th Floor, Boston, MA 02110. The Adviser is controlled by Joseph C. McNay, Managing Member and Chairman of the Sub-Adviser.

Pear Tree Polaris Small Cap Fund, Pear Tree Polaris Foreign Value Fund, Pear Tree Polaris Foreign Value Small Cap Fund & Pear Tree Polaris International Opportunities Fund 

Polaris Capital Management, LLC. (“Polaris”), 121 High Street, Boston, Massachusetts 02110 serves as Sub-Adviser to each of Small Cap Fund, Foreign Value Fund, Foreign Value Small Cap Fund, and International Opportunities Fund. Bernard R. Horn, Jr. is the majority owner and is thus a control person of Polaris. On January 1, 2015, Polaris replaced Columbia as the sub-adviser to Small Cap Fund. On November 15, 2019, Polaris replaced PNC Capital Advisors LLC ("PNC Capital") as sub-adviser to International Opportunities Fund.

Advisory Contracts

For services rendered, the Manager pays to the Sub-Adviser of the Pear Tree Fund a fee based on a percentage of the average daily total net assets of the Pear Tree Fund. The fee for each Pear Tree Fund is determined separately.

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*

Until July 31, 2024, or the Trustees terminate the management fee waiver with respect to Foreign Value Fund, the Sub-Adviser has agreed to waive its fees such that the annual advisory fee rates are as follows: 0.30 percent of the first $35 million; 0.35 percent of amounts in excess of $35 million but less than $200 million; and 0.45 percent of assets in excess of $200 million of average daily total net assets.

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**

Until July 31, 2024, or the Trustees terminate the management fee waiver with respect to Foreign Value Small Cap Fund, the Sub-Adviser has agreed to waive its fees such that the annual advisory fee rates are as follows: 0.30 percent of the first $35 million; 0.35 percent of amounts in excess of $35 million but less than $200 million; and 0.45 percent of assets in excess of $200 million of average daily total net assets.

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***

Until September 30, 2024, or the Trustees terminate the management fee waiver with respect to International Opportunities Fund, the Sub-Adviser has agreed to waive its fees such that the annual advisory fee rates are as follows: 0.25 percent of the first $35 million; 0.30 percent of amounts in excess of $35 million but less than $200 million; and 0.40 percent of assets in excess of $200 million of average daily total net assets.

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(1)

Amounts presented represent gross sub-advisory feed paid to Polaris. Of such gross amount, Polaris waived sub-advisory fees in the annual aggregate amount as follows: $1,655,696 in 2021, $2,167,306 in 2022 and $1,749,482 in 2023.

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(2)

Amounts presented represent gross sub-advisory fees paid to Polaris. Of such gross amount, Polaris waived sub-advisory fees in the annual aggregate amount as follows: $362,492 in 2021, $587,333 in 2022 and $510,707 in 2023.

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(3)

Amounts presented represent gross sub-advisory fees paid to Essex during the fiscal period September 1, 2021 to March 31, 2022.

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(4)

Amounts presented represent gross sub-advisory fees paid to Essex by the Predecessor Fund. Of such gross amount, Essex waived sub-advisory fees in the annual aggregate amount as $145,592 in the fiscal year ended August 31, 2021.

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(5)

Amounts presented represent gross sub-advisory fees paid to Polaris. None of the current fee waiver/expense reimbursement agreements was in effect prior to August 1, 2023.

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SAI - 41

Portfolio Managers  

Pear Tree Polaris Small Cap Fund — Polaris (as of March 31, 2023)

*

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Pear Tree Quality Fund — Chartwell (as of March 31, 2023)

*

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SAI - 42

*

For registered investment companies, assets represent net assets of all open-end investment companies and gross assets of all closed-end investment companies.

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*

For registered investment companies, assets represent net assets of all open-end investment companies and gross assets of all closed-end investment companies excluding the Pear Tree Funds.

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Pear Tree Polaris International Opportunities Fund — Polaris (as of March 31, 2023)

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*

For registered investment companies, assets represent net assets of all open-end investment companies and gross assets of all closed-end investment companies excluding the Pear Tree Funds.

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The following table shows the dollar range of shares of a Pear Tree Fund that were beneficially owned by each portfolio manager as of March 31, 2023.

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Conflicts of Interest

Sub-Adviser Compensation Structure and Method Used to Determine Compensation

Chartwell 

The compensation paid to a Chartwell portfolio manager and analyst consists of base salary, annual bonus, and an annual profit-sharing contribution to the firm’s retirement plan.

A portfolio manager’s and analyst’s base salary is determined by Chartwell’s Compensation Committee and is reviewed at least annually. A portfolio manager’s and analyst’s experience, historical performance, and role in firm or product team management are the primary considerations in determining the base salary. Industry benchmarking is utilized by the Compensation Committee on an annual basis.

Annual bonuses are determined by the Compensation Committee based on a number of factors. The primary factor is a performance-based compensation schedule that is applied to all accounts managed by a portfolio manager within a particular investment product and is not specific to any one account. The bonus is calibrated based on the gross composite performance of such accounts versus the appropriate benchmark and peer group rankings. Portfolio construction, sector and security weighting, and performance are reviewed by the Compliance Committee and Compensation Committee to prevent a manager from taking undue risks. Additional factors used to determine the annual bonus include the portfolio manager’s contribution as an analyst, product team management, and contribution to the strategic planning and development of the investment group as well as the firm. For employee retention purposes, if an individual employee’s bonus exceeds $50,000 for a given year, an amount equal to 25% of the bonus is deferred and paid 3 years after the initial pay date.

Chartwell also provides a profit sharing and 401(k) plan for all employees. The annual profit-sharing contribution and/or matching contribution from Chartwell is discretionary and based solely on the profitability of the firm.

Essex  

Finally, Essex is committed to using a fundamental team approach and culture that encourages continuity among its investment professionals and makes a conscious effort to reward its team members accordingly.

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Polaris  

All cash flow earned by the firm is distributed to personnel annually in the form of a salary, bonus, retirement plan contribution or equity compensation. Each employee receives a salary and possible discretionary year-end bonus depending on the overall performance and profitability of the firm. Cash flow in excess of operating expenses earned by the firm is distributed to personnel annually. At the senior level, bonuses range from 0 percent to unlimited upside as base salary is kept at a minimum. A typical bonus at this level may be more than 75 percent of base salary. The recognition and retention of firm personnel is supported by the fact that the bonus is based on annual firm profits, which are a function of assets under management, and therefore, performance. There is no formal split between specific performance targets and subjective criteria. The firm seeks to attract best-of-breed personnel and expects compensation of employees to be better than that of peer groups over time. In addition to base salary and bonuses, the firm offers additional incentives for staff, which may include equity ownership or equity-based compensation.

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DISTRIBUTOR AND DISTRIBUTION PLAN

Distributor

Distribution Plan

For the fiscal year ended March 31, 2023, the Pear Tree Funds paid to the Distributor fees pursuant to the 12b-1 Plan in the following amounts:

For the fiscal year ended March 31, 2023, the Distributor also received fees pursuant to the 12b-1 Plan with respect to sales of Pear Tree Axiom Emerging Markets World Equity Fund-Ordinary Shares in an aggregate amount of $173,509.

Rule 12b-1 provides that any payments made by an investment company to a distributor must be made pursuant to a written plan describing all material aspects of the proposed financing of distributions and that all agreements with any person relating to implementation of the 12b-1 Plan must be in writing. Continuance of the 12b-1 Plan and the Distribution Agreement is subject to annual approval by a vote of the Trustees, including a majority of the Trustees who are not “interested persons” of the Pear Tree Funds and have no direct or indirect financial interest in the operation of the plan or related agreements (“Qualified Trustees”), cast in person at a meeting called for the purpose. The 12b-1 Plan may be terminated as to a Pear Tree Fund by the vote of a majority of the Qualified Trustees, or by the vote of a majority of the outstanding voting securities of the Pear Tree Fund. All material amendments to the 12b-1 Plan as they relate to a Pear Tree Fund must be approved by the Qualified Trustees and any amendment to increase materially the amount to be spent pursuant to the 12b-1 Plan must be approved by the vote of a majority of the outstanding voting securities of the Pear Tree Fund. The Trustees review quarterly a written report of the amounts so expended and the purposes for which such expenditures were made. The 12b-1 Plans also terminate automatically upon assignment.

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Marketing and Intermediary Support Payments/Revenue Sharing Arrangements.

Administrative and Processing Support Payments.

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Ameriprise Financial

Ascensus/EFC Financial Services

BNY Mellon

Charles Schwab & Co., Inc.

Edward Jones

Fidelity Institutional Operations Co

Goldman, Sachs & Co

LPL Financial LLC

Merrill Lynch

MSCS Financial Services

Nationwide Financial Services

Trust Company of America/TC Advisors Network

SEI Private Trust

UBS Financial Services

U.S. Bank N.A.

Voya Retirement Insurance and Annuity Company

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Please contact your financial intermediary for details about any payment it receives from Pear Tree Affiliates or the Pear Tree Funds, as well as about fees and/or commissions it charges.

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Other service providers to the PEAR TREE FundS

Custodian

UMB Bank n.a. (the “Custodian”) is the custodian of the Pear Tree Funds’ securities and cash. The Custodian is not affiliated with the Manager. The Custodian’s responsibilities include safekeeping and controlling the Pear Tree Funds’ cash and securities, handling the receipt and delivery of securities, determining income and collecting interest and dividends on the Pear Tree Funds’ investments, maintaining books of original entry for portfolio and fund accounting and other required books and accounts, and calculating the daily net asset value of each class of shares of each Pear Tree Fund. The Custodian does not determine the investment policies of any Pear Tree Fund or decide which securities a Pear Tree Fund will buy or sell. The Pear Tree Funds may, however, invest in securities of the Custodian and may deal with the Custodian as principal in securities transactions. Custodial services are performed at the Custodian’s office at 928 Grand Boulevard, 5th Floor, Kansas City, Missouri 64106.

Co-Administrators

Pear Tree Advisors, Inc. (the “PT CO-Administrator”) serves as a co-administrator to the Pear Tree Funds and provides certain administrative services to the Pear Tree Funds under an Administration Agreement. Pursuant to the Administration Agreement, each Pear Tree Fund shall pay to the PT CO-Administrator an annual fee of 0.03% of net assets for which the manager acts as a co-administrator. For the fiscal year ended March 31, 2023, the PT CO-Administrator has received fees in the amount of $1,518,869. Fund administration services are performed at the PO CO-Administrator’s offices at 55 Old Bedford Road, Suite 202, Lincoln, Massachusetts 01773.

Transfer Agent

Further, subject to the approval of the Trustees, the Transfer Agent or the Pear Tree Funds may from time to time appoint a sub-transfer agent for the receipt of purchase and sale orders and funds from certain investors.

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Independent Registered Public Accounting Firm

The Pear Tree Funds’ financial statements for the fiscal year ended March 31, 2023, and report of the independent registered public accounting firm in the Pear Tree Funds’ Annual Report are incorporated herein by reference.

Counsel to the Independent Trustees and the Funds