What is the Vice Fund
The Vice Fund is a mutual fund managed by USA Mutuals which focuses its investments on vice industries considered by many to be socially irresponsible investments or "sin stocks.”
BREAKING DOWN Vice Fund
The Vice Fund primarily invests in stocks generating the majority of their revenue from the alcohol, tobacco, gaming and defense industries. This encompasses casino operators, gaming equipment manufacturers, defense equipment manufacturers, alcohol producers and tobacco producers. The fund invests in both domestic and foreign-based equities, with its holdings ranging from small cap to mega cap companies. It has been in operation since 2002. From July 2014 to October 2016 the Fund was known as the Barrier Fund.
The Fund seeks high-quality dividend-paying stocks in the vice industries and believes these industries have significant barriers to entry, which make successful companies a source of reliable stock returns. The Fund also believes that its investments are generally market neutral, meaning that they do well in both down and up markets because of a steady demand for vice industry goods through all market cycles. The Fund is also broadly diversified internationally, which helps it to avoid broad market volatility. Additionally, it maintains an emphasis on dividend-paying companies with positive cash flow, which provides for income payouts to investors.
Investing in the Vice Fund
The Fund is structured as an open-end mutual fund with four share classes. Its share classes include A, C and investor shares as well as institutional shares. It has a management fee of 0.95% with total annual fund operating expenses ranging from 1.24% to 2.24%.
The Fund can be traded through both full-service and discount brokerages. Its institutional and investor classes require no sales loads. A-shares charge a front-end load of 5.75% and back-end load of 1% through full-service intermediaries. The C-shares charge only a contingent deferred 1% back-end load in the 12 months following an initial purchase.
The Fund has reported steady annual total returns over the last 10 years through February 7, 2018, with dividends consistently contributing to the Fund’s overall return. It has a one-year return of 22.55%, a three-year annualized return of 11.31%, five-year annualized return of 12.61% and a 10-year annualized return of 7.72%. Through December 31, 2017, it reports a cumulative return since inception of 375.5% versus the return of 229.49% for the S&P 500. For the trailing 12 months, it has a dividend yield of 0.89%.
As of December 31, 2017, the Vice Fund had total assets under management of $238.83 million. Top holdings in the Fund included Altria Group, British American Tobacco and Wynn Resorts.