Hennessy Stance ESG ETF

Hennessy Stance ESG ETF (STNC) is an actively managed fund that holds a focused group of at least 30 large US companies. Its sub-adviser, Stance Capital, picks them using an ESG (environmental, social and governance) screen and a machine learning model. It is a semi-transparent ETF, so it does not publish its exact daily holdings. Its 0.85% expense ratio is about double the 0.41% average of similar funds.

• Over the year to Oct 27, 2026, STNC returned +10.2%, 6th of 7 among similar funds.
• Its 5-year annualized return was +6.7%.
• Its worst full calendar year was 2022 (-13.1%); its best was 2023 (+11.5%).
• The deepest fall in its price history was 22.3% (Dec 29, 2021 to Jun 16, 2022), recovered by Feb 22, 2024.

As of Nov 30, 2022, the fund held 38 securities; the ten largest made up 36.55% of assets.

By sector

• Over the three months to Nov 30, 2022, investors added a net $2.9M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -5.66%, +9.61%, +4.90%.

Hennessy Advisors runs the fund, and Stance Capital chooses the stocks. At least 80% of net assets goes into large US companies, meaning those in the Russell 1000 and S&P 500 indexes, that meet Stance's ESG standards. Selection has three steps. First, a rules-based ESG screen keeps the top half of each industry. It drops companies that work mainly in weapons, tobacco or thermal coal. It scores the rest on up to 21 measures, such as carbon intensity, water use and CEO-to-worker pay. The main data source is Corporate Knights Research, based in Toronto.

Second, a machine learning model uses financial and risk factors to pick the companies it rates most likely to outperform over the next quarter. Third, the portfolio is set up to reduce tail risk (the chance of rare, large losses) and to spread money widely. Holdings are rebalanced quarterly. Each sector is capped at twice its S&P 500 weight, and any one industry stays under 25%. Turnover was 180% according to the prospectus. That trading has costs that are not included in the expense ratio.

Because the fund is semi-transparent, it publishes a "Portfolio Reference Basket" instead of its actual portfolio. The basket holds the same stocks with different weights and must overlap the real weights by at least 90% at the start of each trading day. A published "Guardrail Amount" caps how far any one weight can differ.

• STNC charges 0.85% a year, versus an average of 0.41% for the similar funds below (7th of 7, cheapest first).
• Of that, 0.95% is the management fee; the rest covers other fund expenses.
• The fee includes a 0.1% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $87 in the first year and $— over 10 years (assuming a 5% annual return).

It is a concentrated, high-turnover active fund with a short record and an above-average fee, so it fits better as a small values-based slice than as a core holding.

STNC could add an ESG-screened slice of US large-cap stocks that has moved less than the broad market. Its beta was 0.78 over the year to October 27, 2026. It launched in March 2021, so it has no record from the 2008 or 2020 crashes. Its deepest drop was 22.3%, from December 29, 2021 to June 16, 2022, and it took about 20 months to recover, in February 2024. Its worst calendar year was 2022, at -13.1%. Anyone who had to sell shares in mid-2022 would have locked in much of that loss. Income is small: the trailing yield was 0.92% as of October 27, 2026, paid once a year. Under the SEC's standard example, $10,000 would cost about $87 in fees in the first year and $293 over three years. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).