The Eventide Gilead Class C Has A Great Degree Of Susceptibility

| About: Eventide Gilead (ETCGX)

Summary

The Eventide Gilead Class C's performance has dropped significantly within the past year and in comparison to its 3-year and 5-year ratios.

The fund's advantage in small-cap stocks and micro-cap stocks increases its vulnerability to downside risk.

Within its first fifteen holdings, the fund is clearly weighed down by key holdings in the technology sector.

The Eventide Gilead Fund C's (MUTF:ETCGX) performance this year can be considered the exact opposite of the performances of Aaron Gordon and Zach Lavine during NBA All-Star Saturday Night in Toronto.

Recent performance ratios within the past year has shown this fund to be highly susceptible to the current downward spiral of the stock market. This fund was ranked third and sixth in its Morningstar Midcap Growth category in its 3-year and 5-year ratios respectively. Since then, this fund's fortunes has taken three giant steps downward.

At present, the fund is ranked in the mid to high nineties within its category in terms of monthly return and YTD return ratios. As you can see in the chart below, the numbers are not pretty.

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It is worth noting that the fund has garnered this negative performance in spite of the fact that it has nearly 18% in term of cash assets. By comparison, the Morningstar Midcap Growth category average for cash assets was 2.81%.

In terms of market capitalization, the Eventide Gilead Class C's weighting in terms of market capitalization is indicative of a fund that is highly susceptible to the downside. In the chart below, one can see that the fund has a significant deficit when it comes to large-cap and mid-cap weighted stocks. Yet, the fund has a decided advantage when it comes to riskier small-cap stocks and micro-cap stocks.

While the percentage of small-cap and micro-cap stock weighting in the Eventide Gilead Class C's is over 35%, the benchmark and category average's totals are 5% and 16%.

Size

% of Portfolio

Benchmark

Category Avg.

Giant

9.22

0.00

1.10

Large

14.14

30.31

20.58

Medium

41.40

64.22

61.63

Small

29.35

5.38

16.02

Micro

5.89

0.09

0.6

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In terms of sector weighting, it is worth noting that the fund is heavily concentrated in the technology sector. The fund's decided advantage in the technology sector can be seen below.

Sector

% of Stocks

Benchmark

Category Average

Technology

37.83

16.74

19.39

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The performances of the Technology Select Sector SPDR ETF (NYSEARCA:XLK) and the PowerShares S&P SmallCap Information Technology Portfolio (NASDAQ:PSCT) are a combined -6.7% AND -6.3%.

The fund is also greatly weighted during the health-care sector. The Health Care Select Sect SPDR ETF (NYSEARCA:XLV) is the 2nd worst performing U.S Sector ETF with a total of -8.9%. In terms of U.S Sector Small-Cap ETFs, the PowerShares S&P SmallCap Health Care Portfolio ETF (NASDAQ:PSCH) is the second worst performer with a -16.5% YTD Return.

Sector

% of Stocks

Benchmark

Category Average

HealthCare

20.18

11.74

15.51

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When one looks at the top 15 holdings in this fund, one can see that this fund is being held down by the technology sector. Out of the top 15 holdings, seven holdings have earned a negative YTD Return.

Company Name

Portfolio Weight

YTD Return

Palo Alto Networks (NYSE:PANW)

3.55%

-27.48%

Red Hat, Inc (NYSE:RHT)

2.78%

-22.91%

Lam Research Company (NASDAQ:LRCX)

2.45%

-14.91%

Mobileye (NYSE:MBLY)

2.26%

-35.03%

CyberArk Software Ltd (NASDAQ:CYBR)

2.24%

-23.64%

Qlik Technologies Inc. (NASDAQ:QLIK)

2.03%

-41.22%

Splunk Inc. (NASDAQ:SPLK)

1.99%

-45.18%

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When one factors the fund's increasing inability to limit losses as well as its above-average expense ratio, one cannot help but see this fund as one to avoid entirely. This can be seen in the following charts: The Eventide Gilead Glass C's difficulty in limiting losses in downward markets has taken a sharp turn for the worst over the past year.

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BOTTOM LINE:

At this point, there does not seem to be anything attractive regarding this fund. The Eventide Gilead Class C's YTD performance are indicative of a fund that is clearly vulnerable to the bear market. Clearly, the fund's weight advantage in micro-cap and small-cap stocks is playing a major role in the fund's decline. It is also apparent that the fund is being weighed down by poorly performing holdings in the technology sector.

And while I would have not recommended this fund if it were cheaper than average, the fund's above-average expense ratio is just another reason to say no to the Eventide Gilead Class C Fund.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.