Vice Fund Explained: What It Is, How It Operates, and Investment Insights
Explore the Vice Fund, a unique mutual fund by USA Mutuals that targets investments in vice industries often labeled as 'sin stocks,' including alcohol, tobacco, gaming, and defense sectors.
What Is the Vice Fund?
The Vice Fund, previously known as the Vitium Global Fund, is a specialized mutual fund managed by USA Mutuals. It focuses on investing in industries commonly viewed as socially controversial or 'sin stocks,' such as alcohol, tobacco, gaming, and defense.
Initially, the term 'vice fund' was colloquially used to describe any fund heavily invested in sin stocks before this formal fund was created.
The fund was renamed to Vitium Global Fund on May 23, 2019, but reverted to its original name, Vice Fund, on August 4, 2021.
Key Highlights
- The Vice Fund targets companies generating most of their revenue from vice-related industries including alcohol, tobacco, gaming, and defense.
- It invests in a diverse range of stocks from small-cap to mega-cap firms, both domestically and internationally.
- The fund has undergone name changes from Vice Fund to Vitium Global Fund and back to Vice Fund within recent years.
Understanding the Vice Fund's Investment Approach
The Vice Fund focuses on companies primarily engaged in alcohol, tobacco, gaming, and defense sectors. This includes casino operators, gaming equipment manufacturers, defense contractors, and producers of alcohol and tobacco products.
Operating since 2002 and briefly known as the Barrier Fund from 2014 to 2016, the fund invests across a global spectrum of equities, emphasizing dividend-paying stocks with strong cash flow.
The fund believes vice industries have high barriers to entry, making their leading companies reliable sources of consistent stock returns.
Moreover, the Vice Fund aims to maintain market neutrality, performing well in both bullish and bearish markets due to consistent demand for vice products regardless of economic cycles.
Its international diversification strategy helps mitigate broad market volatility, while focusing on dividend-paying firms ensures steady income for investors.
How to Invest in the Vice Fund
The Vice Fund is an open-end mutual fund offering four share classes: A, C, investor, and institutional shares. Management fees stand at 0.95%, with total annual operating expenses ranging between 1.24% and 2.24% (net expense ratio).
Shares can be purchased through full-service or discount brokerages. Institutional and investor shares have no sales loads, A-shares carry a 5.75% front-end load and a 1% back-end load via full-service brokers, while C-shares impose a 1% contingent deferred back-end load within 12 months of purchase.
The fund has delivered relatively steady returns, with dividends playing a key role. As of June 30, 2022, the Investor Class reported a five-year annualized return of 0.74% and a ten-year annualized return of 6.79%.
Since its inception, the fund’s annualized return through June 30, 2022, was 7.82%, compared to the MSCI All Country World Index benchmark of 8.32%. Its dividend yield stood at 0% as of September 9, 2022.
By September 9, 2022, the Vice Fund managed assets totaling $79.2 million, with top holdings including Galaxy Entertainment, Northrop Grumman, Raytheon Technologies, and Philip Morris International.
Explore useful articles in Mutual Funds as of 16-09-2022. The article titled " Vice Fund Explained: What It Is, How It Operates, and Investment Insights " offers in-depth analysis and practical advice in the Mutual Funds field. Each article is carefully crafted by experts to provide maximum value to readers.
The " Vice Fund Explained: What It Is, How It Operates, and Investment Insights " article expands your knowledge in Mutual Funds, keeps you informed about the latest developments, and helps you make well-informed decisions. Each article is based on unique content, ensuring originality and quality.