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USA Mutuals Vice Fund 2017-10-19T15:12:47+00:00

Portfolio Managers

Jordan C. Waldrep, CFA
Jordan C. Waldrep, CFA

Jordan Waldrep has been a portfolio manager of the Vice Fund since 2017.  Previously, Mr. Waldrep was a founder and principal at Blackfin Capital acting as the portfolio manager of two equity portfolios.  He has also served as a principal at Hourglass Capital where he oversaw research and trading responsibilities for a long/short hedge fund and several equity portfolios.  Mr. Waldrep received his MBA from the University of Texas, McCombs School of Business in 2004 and his bachelor’s degree from Texas A&M University in 1999.  Mr. Waldrep is also a Chartered Financial Analyst.

Firm Description

With a history spanning three decades, Dallas based USA Mutuals has long been a provider of alternative investment strategies to both the institutional and retail marketplaces. Founded in 1994, the company launched with a simple mandate: Create an environment in which the company’s goals and expectations are truly aligned with our investors.

Our stable of fund offerings has been methodically assembled in concert with that mandate. It contains carefully selected Proprietary and Sub-Advised strategies that have historically demonstrated the ability to navigate a variety of market cycles, including the most difficult ones. Armed with a thorough understanding of the performance expectations for each of these investment philosophies, we work diligently to correctly pair them with the portfolio needs of our clients. This alignment of expectations is vital to all aspects of our approach. We firmly believe that the success of USA Mutuals is rooted in the satisfaction of the thousands of investors we’ve had the privilege to serve.

Strategy

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.

HOW TO INVEST

Performance At A Glance

QUARTER-END PERFORMANCE AS OF 9/30/2017
1 Year 3 Years 5 Years 10 Years Since Inception*
USA Mutuals Vice Fund Class A w/ Load 8.17% 7.32% 11.43% 12.97%
USA Mutuals Vice Fund Class A w/o Load 14.78% 9.47% 12.76% 14.13%
USA Mutuals Vice Fund Class C w/ Load 12.96% 8.63% 11.90% 13.28%
USA Mutuals Vice Fund Class C w/o Load 13.91% 8.63% 11.90% 13.28%
USA Mutuals Vice Fund Inst. Class 15.06% 9.72% 7.73%
USA Mutuals Vice Fund Investor Class 14.75% 9.46% 12.75% 5.93% 10.33%
S&P 500 TR Index 18.61% 10.81% 14.22% 7.44% 9.15%
TOP TEN HOLDINGS AS OF 9/30/2017
Industry/Company Portfolio Weight
ALTRIA GROUP INC 5.79%
BRITISH AMERN TOB PLC 5.21%
PHILIP MORRIS INTL INC 4.94%
IMPERIAL BRANDS PLC 4.93%
RAYTHEON CO 4.86%
WYNN RESORTS LTD 4.85%
CONSTELLATION BRANDS INC 4.50%
LAS VEGAS SANDS CORP 4.49%
MGM RESORTS INTERNATIONAL 4.29%
GALAXY ENTERTAINME 3.98%

*Inception: 8/30/2002 (Investor), 12/08/2011 (Class A & C), 4/1/2014 (Institutional)

Gross expense ratio Vice : Inst – 1.27%, Investor- 1.49%, A – 1.49%, C- 2.24%

Net Expense Ratio Vice: Inst – 1.24%, Investor – 1.49%, A – 1.49%, C-2.24%

Contractual fee waivers through 7/31/18.

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.