Eventide Small Cap ETF (ESSC) seeks to provide long-term capital appreciation by investing in small-capitalization U.S. companies that align with biblical values and demonstrate strong business fundamentals. This faith-based small-cap equity ETF targets companies with market capitalizations typically between $300 million and $2 billion.
How It Works
ESSC employs an actively managed approach that screens potential investments through both financial and values-based criteria, excluding companies involved in activities contrary to biblical principles such as abortion, pornography, or predatory lending. The fund's portfolio managers conduct fundamental analysis to identify undervalued small-cap companies with strong growth potential, competitive advantages, and ethical business practices. Holdings are typically concentrated in 40-60 positions with quarterly rebalancing based on valuation and conviction levels.
Key Features
- Faith-based investing approach excludes companies involved in activities contrary to biblical values while targeting financial outperformance
- Actively managed small-cap strategy focuses on undervalued companies with strong fundamentals and competitive moats
- Recently launched ETF with concentrated portfolio approach allowing for higher conviction positioning in best ideas
Risks
- This ETF can lose value significantly during small-cap market downturns, potentially declining 40-50% in severe bear markets due to higher volatility
- Values-based screening may limit investment universe and cause performance to lag broad small-cap benchmarks during certain market cycles
- Active management risk means fund performance depends heavily on manager stock selection and may underperform passive small-cap index funds
Who Should Own This
Best suited for faith-based investors with high risk tolerance and 5+ year investment horizons seeking small-cap growth exposure aligned with biblical values. Appropriate as satellite holding representing 5-15% of equity allocation. Requires patience for active management strategy to outperform and comfort with higher volatility typical of small-cap stocks.