eventide gilead fund - lightpoint portfolios€¦ · portfolio impact highlights eventide gilead...

Portfolio Impact HighlightsEventide Gilead Fund

Weight: 4.37% of portfolioTheme: Evolution to the Cloud

Email is the most important communica-tion channel in the digital world. Account setups, order con�rmations, password resets, shipping noti�cations, and many other important business-to-customer communications are sent by email. Yet, remarkably, 21% of these wanted emails never reach their intended recipients (ReturnPath’s 2015 Email Deliverability Benchmark Report). Email failure happens when inbox service providers, like Gmail and Outlook, mistake wanted emails for spam, and route the messages to junk/bulk folders or block them entirely. When businesses fail to communicate, customers lose trust and walk away, costing businesses an estimated tens of billions of dollars in lost revenue every year. SendGrid is a company that helps businesses ensure wanted emails get successfully delivered to their customers. With just a few lines of code, businesses can plug into SendGrid’s powerful email-sending technology platform and achieve industry-best email delivery rates of 94% and better. Because of their ease of use and superior email delivery, over 78,000 businesses like Uber, Airbnb, and eBay, trust SendGrid to deliver their important emails (more than 45 billion emails per month). SendGrid focuses on just one problem – email delivery – and their commitment to making email simply work better creates value for businesses and their customers. (SendGrid is based in Denver, CO.)

DEVELOP Evolution to the Cloud 13.8 %Consumer Convenience 6.7 %Big Data, Business Intelligence, IoT 6.7 %Infrastructure 4.7 %Beyond Moore's Law 3.9 %Home Renovation 3.4 %Supply Chain E�ciency 2.5 %

SUSTAIN Transport 2.0 5.2 %Renewable Power Production 4.3 %Reduce, Reuse, Recycle 3.8 %Energy E�ciency 3.4 %

Cash/Other 10.0 %

RESTORE Pediatric and Orphan Diseases 15.7 %Cybersecurity 5.9 %Health & Safety 3.9 %Novel Neurology 3.0 %Precision Oncology 1.8 %Women's Health 1.1 %

FUNDTHEMES

For many people, the �rst question they ask about an investment is, “What are

the returns?” But, behind all the sophistication of charts and facts and �gures,

investing is the act of owning companies. For this reason, the �rst and most

basic question of investing should be, “What kind of companies will I own?”

Towards that end, this document is intended to help you better understand the kinds of companies you can own when investing with Eventide.

You’ll learn about some of the big picture themes our companies are a part of, and how these themes are meeting important needs in the world today. These themes include: Cybersecurity, Pediatric and Orphan Diseases, Big Data and Business Intelligence, among others.

You’ll also learn about the companies themselves, and some of the speci�c ways they are working to create value for society, customers, employees, and other key stakeholders.

In all of this, we hope you’ll discover a new appreciation for the connection of investing to business and company ownership. And with this discovery, to desire to invest in companies that are not merely successful, but admirable.

Eventide invites you to join us in investing that makes the world rejoice.®

INVEST IN COMPANIES YOU CAN BE PROUD TO OWN

Holdings percentages are based on net assets as of December 31, 2018, selected based on portfolio weight. The opinions expressed herein are those of the fund’s investment team as of December 31, 2018, and subject to change. Reliance upon the views expressed herein is at the sole discretion of the reader. Holdings can change at any time and should not be considered investment advice. Eventide uses its trademark (“Investing that makes the world rejoice®”) in a �gurative manner to help explain its focus on serving investors by helping to improve the world.

Weight: 3.97% of PortfolioTheme: Pediatric and Orphan Diseases

Children with growth hormone de�ciency (GHD) experience a problem where their bodies do not produce enough growth hormone needed to grow to their full potential. This disorder is detected when they are just infants, as height/-weight trajectories fall below normal ranges. The standard of care for GHD for over 30 years has been to supply children with recombinant (or man-made) growth hormone that is identical to that produced in the body. This allows children with GHD to reach their full potential stature. While e�ective, the treatment requires daily injections for as long as from infancy to puberty

(roughly from age <1 to 17). Because of the pain of the injections and demanding daily schedule, two out of three patients miss more than one dose weekly. And predictably, missing doses is associated with children not reaching their full

potential height. Ascendis Pharma is developing a novel way to make life

better for these children and their parents. By linking the hormone to a

safe organic polymer, they have found a way to extend the release of

the hormone in the body, thereby changing the regime to only once weekly. This makes treatment much more manageable for families, and in early clinical outcomes, has also shown improved growth. (Ascendis Pharma is based in Denmark.)

Portfolio Impact Highlights: Eventide Gilead Fund 2

Weight: 3.20% of PortfolioTheme: Cybersecurity

When it comes to cybersecurity, gone are the days of simple network �rewalls and anti-virus software. Cyberattacks and data breaches are sharply on the rise. As a result, cybersecurity is now viewed as a matter of defense, not just compliance. Further, as companies have embraced cloud computing and mobile devices, the complexities of cybersecurity have multiplied – as have their vulnerabilities to attack. Palo Alto Networks o�ers an all-in-one cybersecurity platform to help modern businesses meet these challenges and protect their valuable data, apps, and infrastructure. With their deep domain expertise in cybersecurity and focus on innovation, Palo Alto Networks has become the global leader in cyberse-curity. Fortune Magazine named them one of the Top 50 Companies Changing the World (September 2017) and a Future 50 company (October 2017), and among their 56,500 customers are leaders in our digital age, including Google and Amazon Web Services. Impressively, they consistently post the highest Net Promoter Scores in the cybersecurity industry (a measure of customer delight) and ranked #1 as the “best place to work” in the San Francisco Bay Area by the SF Business Times (2016). (Palo Alto Networks is based in Santa Clara, CA.)

Weight: 3.34% of PortfolioTheme: Big Data, Business Intelligence, IoT

Businesses today have so much data at their disposal. These data hold the answers to what’s working and what’s not. By understanding their data, compa-nies can be nimble and dynamic; they can be smarter and more strategic. The problem is wrangling this data and interpreting it. ‘Machine data’ (data that’s produced by software and electronic devices) is growing at a rate 50X that of traditional business data. In the aggregate, this can become what is known as ‘big data’ (on the order of terabytes, even petabytes of data). How can companies make sense of all of it?

Splunk is working on just that. Their name derives from ‘spelunking’ – the term for cave exploration – which o�ers a helpful metaphor. Their machine data software platform lets companies collect and then

visualize these data so they can – like cave explorers – dive into the data to

discover what’s there. Splunk is thus helping companies transition

away from outmoded business decision-making based on gut, to

modern data-driven decision-making that can lead to competitive advantage. Splunk's platform interprets big data for business intelligence and is trusted by 90 of the Fortune 100 companies. (Splunk is based in San Francisco, CA.)

Mutual funds involve risk including the possible loss of principal. Past performance does not guarantee future results. The fund can invest in smaller-sized companies which may experience higher failure rates than larger companies and normally have a lower trading volume than larger companies. The fund’s ethical values screening criteria could cause it to under perform similar funds that do not have such screening criteria. The fund can have risk associated with the biotechnology and pharmaceutical industry in which these companies may be heavily dependent on clinical trials with uncertain outcomes and decisions made by the U.S. Food and Drug Administration. Companies in the technology industries have di�erent risks including but not limited to products

becoming obsolete, and entrance of competing products. Companies in the Industrials sector carry various risks including, but not limited to, risk related to debt loads and intense competition. The fund can have risk related to option investing. There are special risks associated with investments in foreign companies including exposure to currency �uctuations, less e�cient trading markets, political instability and di�ering auditing and legal standards. The fund can invest in private companies. Private investments include various risks including but not limited to lack of liquidity, capital commitment risk, and valuation risk. Private companies may not be �nancially pro�table and have uncertain futures, subjecting them to additional risks.

An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the prospectus, which can be obtained at www.eventidefunds.com or by calling 1-877-771-EVEN (3836). Please read the prospectus carefully before investing. Eventide Mutual Funds are distributed by Northern Lights Distributors, LLC, Member FINRA, which is not a�liated with Eventide Asset Management, LLC.

Weight: 3.15% of portfolioTheme: Consumer Convenience

Advertising �lls the critical role of helping customers and companies �nd one another. But traditional approaches to advertising are �awed. Many people �nd advertising irksome; it interrupts the ‘regularly scheduled program-ming’ of our lives to bring us good news of some product or service we don’t need. Companies don’t enjoy this reality any more than customers do. It wastes valuable resources that could be better spent elsewhere. The problem with advertising today is not its function, but its relevance. When relevant, advertising connects customers who have real needs with companies who o�er the perfect

solutions to those needs. In other words, it has the ability to be mutually bene�cial for both parties. The Trade Desk is working to make advertising better. They have developed an advertising buying platform for companies and ad agencies built on

�nding those bene�cial connections to customers. It lets companies assess the likelihood of ROI before invest-ment, then tracks actual ad e�ective-ness from initial customer impres-

sions through to customer purchases. This means companies can spend money wisely. It also means customers can �nd solutions to their needs. And because it makes this connection more e�cient, advertising becomes value creating. (The Trade Desk is based in Ventura, CA.)


Weight: 3.01% of portfolioTheme: Novel Neurology

Sage Therapeutics is seeking to bene�cial-ly address a huge problem: depression. Their story began in 2015 with the development of a therapy to treat women su�ering from postpartum depression (PPD). During pregnancy, women have very high levels of allopregnanolone, a naturally occurring steroid in the body. The high levels of this steroid may contribute to oft-remarked ‘glow’ of expectant mothers, as it has a central nervous system e�ect of feeling happy. At birth, the levels of this steroid crash, which results in about one in four women experiencing some form of PPD (colloquially, ‘the baby blues’). Sage developed a treatment for PPD that intravenously delivers back this steroid with a more gradual taper, thereby alleviating the depression. Since then, Sage has embarked on drug discovery to �nd a way to treat depression more broadly. By studying the way the PPD treatment worked, and how it binds to neurological receptors, Sage has found a small molecule which can be taken orally that uses the same mechanism of action with the same potential therapeutic bene�t – but for depression of all kinds. Their new treatment is in clinical develop-ment. If successful, it would be the �rst major innovation in the treatment of depression since the 1990s. (Sage Thera-peutics is based in Cambridge, MA.)

Weight: 3.11% of portfolioTheme: Pediatric and Orphan Diseases

Duchenne Muscular Dystrophy (DMD) is a rare genetic disorder that causes progres-sive muscle degeneration. The disorder is caused by a genetic mutation where the body is unable to produce a protein called dystrophin. Dystro-phin is the largest protein in the body and acts like a ‘shock absorb-er’ in the muscles. Without this shock absorber dampening the movements of the muscles, the muscles tear, degrade, and die. The e�ects of DMD are heart-breaking: as the muscles degrade, patients lose the ability to walk, and eventually breath and pump blood. As a result,

patients with DMD typically die in their 20s and 30s. Sarepta Therapeutics is working to restore the lives of patients with DMD. Using gene therapy, Sarepta has found a way to deliver a healthy gene to their cells,

enabling these patients to start producing a micro-form of dystro-

phin. This achievement was perhaps the biggest breakthrough in biotech-

nology in 2018. The promise of the therapy goes beyond halting the

negative e�ects of the disease – to actually reversing its course and restoring muscle function once again. (Sarepta Therapeutics is based in Cambridge, MA.)




Weight: 2.94% of portfolioTheme: Home Renovation

One of the biggest themes in housing today is home renovation. The main reason for this is practical: cities are simply running space for new housing. As a result, home buyers are increasingly purchasing existing, older homes. Or, instead of moving, others are choosing to stay in their homes. In both cases, rather than building their dream home, many today are looking to make an existing home their dream home through home renovation. The internet has also contributed to this trend. Through blogs and YouTube, home renovation is no longer viewed as formidable; many people

are actually inspired and excited to make a space their own by taking on home improvement projects, such as rebuilding a deck or retiling a bathroom. Lowe’s is one of the leading companies in this accelerating theme of home renovation.

With over 2,390 stores in the US, Canada, and Mexico, Lowe’s supplies home owners with the

materials and knowledge for tackling home improvement

projects. Lowe’s leads the space in customer delight, boasting the highest Net Promoter Scores, and with a capable new management team, they are poised to build on this strong service foundation with even better execution. (Lowe’s is based in Mooresville, NC.)


Weight: 2.54% of portfolioTheme: Supply Chain E�ciency

Online shopping de�nes commerce today. With the click of a button, goods magically arrive to our homes within days, some-times hours. But consider the challenges of delivery for businesses: packages big and small, of all shapes, originating everywhere and destined everywhere, must traverse the country rapidly and e�ciently. For businesses, shipping is a huge math problem akin to the videogame Tetris, clearing blocks of various shapes and sizes around the country. XPO Logistics is a technology company disguised as a shipping company. They have built a sophisticated shipping logistics technology platform to modern-ize the shipping industry in this age of internet shopping. Businesses today partner with XPO to solve the shipping equation and delight customers. XPO is also making trucking more professional. On the employee side, they’ve created many career advancement opportunities, such as for dock workers to become drivers. On the customer side, they focus on service, such as ‘last mile delivery’ to customer homes where professionalism is paramount. More than simply delivering goods – through their next-level shipping logistics technology platform and service ethic inside and out, XPO is delivering value. (XPO Logistics is based in Green-wich, CT.)

Weight: 2.62% of portfolioTheme: Consumer Convenience

When it comes to buying furniture, one of the biggest questions is, “How’s this going to look in my space?” In the past, answering this question required a vivid imagination or amateur skills in Photoshop. Wayfair is an online store for furniture and home décor, and they’re using technology to take the doubt and guesswork out of the experi-ence of buying furniture. Their mobile app lets you easily hone in on a promising item based on your tastes, place a highly convincing 3D simulacra of the item in your space using your mobile device camera, and even walk around it (using your camera in augmented reality) to

scrutinize it from every angle. This is just one way that Wayfair is making furniture shopping easier and more delightful. Other ways include intuitive search, detailed product descriptions/photos,

extensive peer reviews on products, free shipping, and customer service that goes beyond the call of duty. Through the use of technology and by solving for the customer experi-

ence, Wayfair is changing the way people buy for their homes. And, as a result, they are one of the fastest growing companies in e-commerce today. (Wayfair is based in Boston, MA.)




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