Pear Tree PanAgora Risk Parity Emerging Markets Fund

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(RPEMX/ EMRPX)

Portfolio Management
The Fund is subadvised by PanAgora Asset Management, Inc., a Boston-based firm that manages assets for pension plans, endowments, foundations, unions and financial service providers around the globe. The firm also manages partnerships in Europe and Asia. PanAgora was founded in 1989. Eddie Qian, Ph.D., CFA, who is credited with coining the term “Risk Parity”, serves as the co-manager on the strategy along with Brian Belton, CFA.

Investment Philosophy
The investment 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 diversification. By avoiding concentration of risk, in any individual country, sector, or stock, investors can build portfolios that are expected to generate more stable returns with better downside protection than other more traditional approaches to emerging market equity investing.

Portfolio Construction
The process of managing the portfolio begins with regularly estimating risk and creating a covariance matrix for all securities in the MSCI Emerging Market Index. Using proprietary algorithms, the portfolio management team builds country portfolios for all twenty three countries in the benchmark, while simultaneously balancing risk across sectors and stocks within each country. Step three involves weighting countries such that each country contributes equally to the risk at the aggregate portfolio level. Finally, monitoring and rebalancing the portfolio regularly to keep weights in line with expectations. The portfolio will generally hold 500-550 securities and invest in all twenty three countries that comprise the MSCI Emerging Market Index.

 

Disclosure
- Foreign and Emerging Market Risk. 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 from the U.S. market. Emerging markets can be subject to greater social, economic, regulatory, and political uncertainties and can be extremely volatile.
- Pear Tree PanAgora Risk Parity Emerging Markets Fund is not available to residents in all states. Please call (800) 326-2151 for fund availability in your state or jurisdiction.