VICE FUND: FEBRUARY 2023 – COMMENTARY LETTER
The Vice Fund ended the month of February with a return of -1.38%.
Market Review
January’s equity rally was fueled by the perception of a less hawkish Fed. February was a return to expectations that rates will remain higher for longer. Economic data came in hot to start the month with the nonfarm job payrolls and producer price index higher than expected.
Earnings data reported mostly in line with expectations – however, positive, and negative earnings surprises were rewarded and punished with above average moves post earnings. Technology stocks, in particular, benefited from the lowered earnings expectations coming into the month. Technology stocks outperformed most other sectors.
March will have several economic announcements that may move markets. The Federal Open Market Committee decision on March 22nd may offer insights into the rate path in 2023. Although the bond market expects at least another 25bps hike in March, there were some Fed members in favor of a larger 50bps hike in February. Any change to expectations may cause market turmoil with the onset of a fractured Fed.
Alcohol stocks have been a laggard in the Vice fund portfolio thus far in 2023. We believe profit margins will remain high at the largest of the few largest companies that dominate the industry. However, the smaller peers in the group continue to struggle with consolidation in brands outside their main brewing operations. Military defense and casinos continue to reward over the last year. For casinos, the next several months will be telling as Macau casinos continue the reopening process.
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.
Standardized performance as of (12/31/2022) Fund Inception (02/01/2002)
| 1 Year | 5 Year | 10 Year | Since Inception | |
| VICEX | -3.25% | 0.07% | 6.55% | 7.99% |
| MSCI World Index | -17.96% | 5.75% | 8.54% | 8.23% |
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 1.64% and 1.49%. Contractual fee waivers through 07/31/2023.
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
