VICE FUND: DECEMBER 2024 – COMMENTARY LETTER
The Vice Fund ended the month of December with a return of -4.64%.
Market Review
US equities were mostly lower in December on the heels of the best two-year stretch in 2023 and 2024 in 25 years. Financial markets continue to digest the December 18th Federal Reserve meeting, in which commentary was more hawkish than expected on the rate path. Small cap equities had the most challenging month, with the Russell 2000 falling -8.4%.
The Federal Reserve and European Central Bank (ECB) lowered interest rates by 25 basis points (bps). However, the Fed’s Summary of Economic Projections indicated a slower pace of easing in 2025 amid a cautious stance on inflation. ECB President Christine Lagarde signaled a dovish outlook as economic growth and inflation projections weakened. Economic data was mixed with evidence of a strong but cooling labor market and robust consumer spending. Consumer confidence slipped for the first time in three months amid concerns that new tariffs could increase prices.
As markets move into earnings season, the S&P 500’s forward price-to-earnings (P/E) is in the high 20s, which is above the historical average. This reflects investor confidence in sustained earnings growth and favorable economic conditions. As a result of this equity premium, the market may be more susceptible to volatility if earnings fail to meet expectations.
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 (12/31/2024) Fund Inception (8/30/2002)
| 1 Year | 5 Year | 10 Year | Since Inception | |
| VICEX | 1.55% | 0.07% | 3.48% | 7.22% |
| MSCI World Index | 18.01% | 10.58% | 9.79% | 9.27% |
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 1.91% 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, 2025, 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. Professional investors widely use this index as a performance benchmark for large-cap stocks. You cannot invest directly in an index.
SYMBOL: VICEX
