VICE FUND: DECEMBER 2021 – COMMENTARY LETTER
For the month of December, the Fund was +6.03%.
Market Review
Global equity markets continued their 2021 rally into December. We believe the emergence of the Omicron variant in late November led to a spike in equity market volatility. However, it is our opinion that ongoing strength in corporate earnings lead to the rise in stock prices in December. There is no guarantee 2022 will have the same Fed low rate “easy money” policy that we believe served as a tailwind to the rally.
Rising inflation is evident in CPI data and we believe this may lead to central bank policy normalization and rising interest rates. We believe the velocity of rising rates is a real risk factor to the equity bull market. Moreover, it is our opinion that today’s short-term rates near zero could potentially force central banks to act more quickly than markets expect.
The Vice Fund benefited from what we believe are signs of potential Chinese government concessions to Macau casino stocks. This comes after heightened fears of Chinese regulators delaying or removing these concessions altogether. It is our opinion that these Macau casino stocks had large sell-offs in 2021 stemming from these fears. We believe the latest news of possible concessions is a positive development in relations.
Moreover, the so-called “Big Tobacco” stocks also gained in December. Many of these companies have begun the transition from burning tobacco to either heat or vapor alternatives. Smoke-free products account for the fastest-growing portion of the market. We believe that brand loyalty is strong in the space and will reward stocks that are diversified from purely combustible cigarettes.
Sincerely yours,
Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call 1-800-MUTUALS or visit our website at www.USAMutuals.com. Read the prospectus or summary prospectus carefully before investing.
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Share prices and investment returns fluctuate and an investor’s shares may be worth more or less than original cost upon redemption. For performance data as of the most recent month-end please call 1-866-264-8783.
Standardized performance as of (12/31/2021) Fund Inception (02/01/2002)
| 1 Year | 5 Year | 10 Year | Since Inception | |
| VICEX | -1.30% | 4.09% | 8.27% | 8.24% |
| MSCI World Index | 19.04% | 14.79% | 12.44% | 9.80% |
Investor Class performance data quoted represents past performance; past performance 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. Returns over one year are annualized. The Gross and Net expense 1.67% and 1.49%. Contractual fee waivers through 07/31/2022.
DEFINITIONS:
The MSCI All Country World Index Total Return (“MSCI ACWI TR”) captures large and mid-cap representation across 23 Developed Markets (DM) and 26 Emerging Markets (EM) countries.
SYMBOL: VICEX
