“Eventide Funds is a socially-responsible investing fund that looks for companies that are creating value in the world.”
It’s one heck of a pitch—one that’s tough to ignore.
“They seek to invest in companies that are not just working for the bottom line but to make the world better for customers, employees and communities,” the background material for the Boston-based mutual fund company said in preparation for an interview at the Morningstar Investment Conference in Chicago at the end of June.
“When evaluating companies, we look at asset creation versus asset extraction, which focuses on both internal and external factors,” Robin John, CEO and managing partner, explained. “It’s about companies adding value versus generating profit from exploitation.”
The internal factors, according to John, involve customers, employees and the supply chain, while external factors are the local community, the environment and society at large.
Lest one think they have to sacrifice performance for conscience, he noted the Eventide Gilead Fund is five-star rated and is the No. 1 performing fund in its category according to Lipper. It is in the top 1% of its peers in 2014 and 2015 and was in the top 15% the year before.
The Wall Street Journal also recognized the Eventide Gilead Fund for 2014 performance, naming it a “Category King” in the Midcap Growth category – an award honoring the top 10 mutual funds in each equity category in one-year total performance. The Gilead Fund was ranked No. 1 out of 421 midcap growth funds by WSJ for the one-year period ending December 31, 2014.
“We had $100 million in assets at the end of 2012 and now we recently passed the $2 billion-mark in the Gilead Fund,” John added.
In addition to faith-based filters—pornography and abortion, as well as tobacco, gambling and alcohol, to name a few—researches and managers spend most of their time on two screens; the customer side (how likely they are to recommend a particular company to friends and family) and the employee side (turnover should be low to lower corresponding costs).
“Top holdings include Tesla, because they are building innovative, energy-efficient cars and Domtar, which is a sustainable paper company,” John said. “We also like bio-tech companies, because they’re figuring out solutions to problems that might not have even arisen yet. But their risk-profile are tied to FDA action rather than the economy at large.”
The bio-tech slant is reflected in the Eventide Healthcare & Life Sciences Fund, a health sector fund. With a median market cap of just $1.22 billion and 71.33% percent of the net assets invested in the Biotech & Pharma Industry (as of December 31, 2014), the fund focuses on I”nvesting in high innovation, small, early-development stage biotechnology companies with the potential to appreciate in value as positive data is released regarding clinical trials and FDA feedback, and market acceptance of products.”
That fund finished its 2014 year in the top one-third of its Morningstar peer group, the Health Category, ranked by total return, out of 126 funds.
As for the near-future? Eventide is readying the launch of its multi-asset income fund strategy this summer.
“We want to diversify the risk profile of our shareholders,” John concluded, noting it would be of particular interest to 401(k) retirement plan advisors.
See Also:
- How Many Investment Options Should 401ks Offer?
- World Bank Pension Problem Illustrates Difficulty of SRI Investing
- 401(k) Target Date Allocations: Potential Problems for Retirement Plan Advisors
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
