If You Invested in Eventide Small Cap ETF (ESSC)

Eventide Small Cap ETF (ESSC) is one of the systematic exchange-traded funds managed by Eventide Asset Management, LLC, an investment adviser based in Boston, Massachusetts. ESSC trades on NYSE Arca and is described as the Eventide Small Cap ETF. According to Eventide, this fund is part of a group of systematic ETFs that are intended to broaden the firm’s investment solutions for investors seeking broad market exposure while incorporating a specific values-based investment approach.

ESSC’s stated benchmark is the Bloomberg US 2000 Total Return Index, which is described as a float market-cap-weighted benchmark made up of the lower 2,000 companies, ranked by market capitalization, within the Bloomberg US 3000 Index. Eventide notes that investors cannot invest directly in an index, and that unmanaged index returns do not reflect any fees, expenses, or sales charges. ESSC is not an index fund, and Eventide is not required to purchase any particular securities or any amount of securities that are included in the fund’s benchmark.

Investment approach and philosophy

Eventide states that its systematic ETFs, including ESSC, are built around an adherence to faith-based values while seeking to provide some of the benefits associated with a passive investment style within an active strategy. The firm explains that it does this by filtering potential investments through its proprietary Business 360® methodology. This framework is described as combining data and human discernment to evaluate both a company’s long-term competitive advantage and its impact on human flourishing.

Under this approach, Eventide reviews the products a company offers and assesses its business practices. Companies that meet Eventide’s standards are said to form a distilled investable universe. From that universe, Eventide applies quantitative risk modeling and testing with the goal of aligning portfolio characteristics with benchmark factors such as beta (market sensitivity), style, and sector, while only selecting from the refined universe that has passed the Business 360® screens.

Role within Eventide’s ETF lineup

ESSC is launched alongside the Eventide Large Cap Growth ETF (ESLG) and the Eventide Large Cap Value ETF (ESLV), and follows the earlier introduction of the Eventide US Market ETF (ESUM). Eventide describes these funds collectively as systematic ETFs that offer access to its values-based investment process at competitive fees, with risk and returns that seek to track each fund’s stated benchmark. ESSC’s role within this lineup is to provide small-cap exposure using the same systematic, values-focused framework.

Eventide identifies the use of its Business 360® methodology as a key differentiator in its investment process. The framework is characterized as a 360-degree assessment of value creation and value extraction, considering both financial characteristics and the broader impact of a company’s activities. References to Business 360® in Eventide’s materials are described as illustrative of the general principles that inform the firm’s research process.

Management and oversight

Eventide indicates that ESSC, along with ESLG and ESLV, is managed by Chris Grogan, CFA, and Tyler Frugia. In Eventide’s description, Chris Grogan is identified as Director of Asset Allocation Services and a co-portfolio manager for the systematic ETFs, and is credited as an important contributor to the development of Eventide’s systematic framework. Tyler Frugia is described as Head of Portfolio Analytics and as having helped develop key components of the Business 360® process.

Eventide Asset Management, LLC is identified as the investment adviser to the ETFs, while Foreside Fund Services, LLC is named as the distributor of the Eventide ETFs. Foreside is described as a separate entity that is not affiliated with Eventide.

Risk considerations and disclosures

Eventide’s disclosure materials emphasize that investing in securities involves risk, including the possible loss of principal, and that there is no guarantee any investment strategy will achieve its objective, generate profits, or avoid losses. The firm notes that its values-based approach may not produce the results some investors expect and could lead to underperformance relative to other investments. Eventide also notes that the ETFs are new and have a limited history of operation for investors to evaluate.

In its communications, Eventide states that the phrase “Investing that makes the world rejoice®” is used in a figurative manner to describe its focus on serving investors while aiming to improve the world. The firm also highlights that investors should carefully consider the investment objectives, risks, charges, and expenses of the funds before investing, and that these details are contained in each fund’s prospectus, summary prospectus, and statement of additional information.

Historical ticker context

The symbol ESSC has also been associated with East Stone Acquisition Corporation, which is described as a blank check company incorporated as a British Virgin Islands business company. East Stone was formed for the purpose of effecting a business combination, such as a share exchange, share reconstruction, amalgamation, asset purchase, contractual arrangements, or similar transaction with one or more businesses or entities. East Stone’s public communications describe it as a special purpose acquisition company (SPAC) and note that it entered into a business combination agreement with ICONIQ Holding Limited, under a new holding company named NWTN Inc.

In those materials, East Stone states that it was not limited to a particular industry or geographic region for purposes of its initial business combination, but that it believed it was well-positioned to pursue opportunities in the financial technology space in North America and the Asia-Pacific region. Subsequent announcements describe steps toward a business combination with NWTN, a smart electric vehicle company. These historical references to East Stone Acquisition Corporation relate to the prior use of the ESSC ticker and provide context for users researching legacy information tied to the symbol.

How ESSC may be used by investors

Based on Eventide’s descriptions, ESSC is intended for investors who seek small-cap equity exposure while incorporating Eventide’s Business 360® values-based screening. The fund’s benchmark association with the Bloomberg US 2000 Total Return Index provides a reference point for the segment of the market it is designed to reflect, while the active, systematic process and values screens distinguish it from traditional index-tracking products.

Eventide emphasizes that investors should review the fund’s offering documents to understand its specific investment objective, strategies, and risks. Because ESSC and the related ETFs are described as new with limited operating history, Eventide’s disclosures highlight the importance of considering that track record limitation as part of an investor’s due diligence.