VICE FUND: JUNE 2024 – COMMENTARY LETTER
The Vice Fund ended the month of June with a return of -3.86%.
Market Review
In June, equity markets continued higher and closed out the first half of 2024 as they started the year in a bull market—led primarily by large technology growth stocks. The breadth of the rally was limited, with only five of the eleven sectors showing positive returns. Gains were largely isolated in technology, consumer discretionary, and communication services stocks.
Treasury yields dropped across the board with the exception of short-dated T-Bills. Bond funds benefitted from the lower yields. We believe the yield moves were driven by a weaker jobs report and data that indicated inflation was being tamed in line with expectations.
The unemployment rate has steadily risen for the last twelve months, which may be cause for concern despite raising rate cut expectations in the near term. While the Federal Reserve may be using this strategy to control inflation in the short term, the end game is unclear.
The Fund’s core four vice categories have continued to lag the growth-heavy major stock indices. While these top-heavy market-weighted indices have been a short-term boon for investors, we believe overconcentration risk in the top names may cause more volatility than expected if these stocks sell off.
The Vice Fund remains committed to its core belief that certain stocks are undervalued because certain factions of society deem them morally questionable. Our core holdings remain military defense, casino, alcohol, and tobacco stocks because they typically have an inelastic customer base that is unlikely to be swayed by whether the product price rises or falls.
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 (6/30/2024) Fund Inception (08/30/2002)
| 1 Year | 5 Year | 10 Year | Since Inception | |
| VICEX | -4.94% | 0.66% | 2.83% | 7.25% |
| MSCI World Index | 19.92% | 11.28% | 8.99% | 9.21% |
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 are 1.98% and 1.73%. The Fund’s adviser, USA Mutuals Advisors, Inc. (the “Adviser”), has contractually agreed to reduce its fees and/or absorb expenses of the Fund, until July 31, 2024, to ensure that total annual fund operating expenses after fee waiver and reimbursement will not exceed 1.48% of the Fund’s average daily net assets for each share class.
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.
The S&P 500 Index: An unmanaged composite of 500 large capitalization companies. This index is widely used by professional investors as a performance benchmark for large-cap stocks. You cannot invest directly in an index.
Volatility – The degree of variation of a trading price series over time, usually measured by the standard deviation of logarithmic returns.
SYMBOL: VICEX
