The Vice Fund invests in strong businesses with significant barriers to entry which should result in more predictable market correlations. We believe that fundamentally sound equities of alcohol, tobacco, gaming, and defense companies offer these characteristics to investors and deliver results that are less dependent upon the economic climate. In general, management believes that these equities should offer investors more stability than the overall market in recessionary environments as a result of steady businesses and inelastic demand from end users, potentially delivering predictable results. In more expansionary economic times, these equities may offer lower volatility than the overall market as strong underlying businesses continue to perform. It is our belief that a core of any diversified equity portfolio should be geared towards this style of company for long term stability, predictability, and return potential.
In practice, the Vice Fund primarily invests in, but is not limited to, the Aerospace/Defense, Gaming, Tobacco, and Alcohol sectors in both domestic and foreign markets. Our view is that these ‘vice’ industries and companies should experience more predictable demand from end market consumers while limiting competition via wide economic moats. Any equity that the fund invests in will ideally have several of the following characteristics:
- Natural barriers to new competition demonstrated by sustained returns over time
- Steady consumer demand regardless of economic conditions
- Operate in the Global Marketplace and not be limited to the U.S. economy
- Offer a history of high and durable profit margins
- Generate excess cash flow to pay and increase dividends
- Opportunities to reinvest in the business at high rates of return
We believe that there are numerous investment opportunities available that meet our criteria. In our estimation, many of these equities are regularly undervalued by the market in the short-term for a variety of reasons and offer attractive long-term investment potential the fund. By actively pursuing undervalued investment opportunities with these characteristics, management believes the fund offers our investors the potential for superior risk adjusted returns over the long term while limiting volatility in a manner that provides stability that is unavailable in other equity based investments.
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-866-264-8783. In addition, performance for Class A shares may reflect a CDSC of 1.00% if certain conditions apply. Please see the fund prospectus for further details. Performance shown including load reflects the Class A Maximum Sales Charge of 5.75% and Class C Maximum Sales Charge of 1.00% as a on shares redeemed within 12 months of purchase.
Fund holdings are subject to change and should no be considered a recommendation to buy or sell any security. The top 10 holdings exclude cash or cash instruments.
S&P 500 Index is considered to be generally representative of the U.S. large capitalization stock market as a whole. You cannot invest directly in an index. Unmanaged index returns do not reflect fees, expenses or sales charges.