VICE FUND: SEPTEMBER 2021 – COMMENTARY LETTER
For the month of September, the Fund was -8.76%.
Market Review
September global equity markets were down as several risk factors weighed on the rally. The political and regulatory risk environment in China spread beyond technology stocks. China proposed greater oversight of the casino stocks in Macau which were down sharply mid-month. This put a damper on potential Western investment in China with an uncertain outcome. Further, China’s Evergrande developer crisis raised concerns of potential contagion to other frothy real estate markets around the world. In short, markets were weighed by concerns about whether the risks were mainly regional or widespread.
In the United States, politicians continued to debate whether to raise the debt ceiling. This created fear of a default. Congress did pass a stopgap spending bill that will keep the government open until December 3rd. This extension is occurring with ongoing debate around President Biden’s stimulus initiatives, and implied volatility for November is higher than near-term volatility as a result.
On the economic front, Federal Reserve Chair Jerome Powell said the tapering could begin as soon as the next meeting and did not refer to the recent inflationary pressures as “transitory”. This added further headwinds to an uncertain equities market and sent the 10 Year Yield higher.
The Fund suffered mainly due to the *potential* for shorter Macau casino licensing terms than the current 20-year term due to expire June 26, 2022. The China technology collapse this summer demonstrated that selling first and asking questions later was a strategy taken by many managers in reaction to Chinese regulation. As the Macau government has moved through the first of four consultation sessions with the public through October, Macau casino names have stabilized. We believe staying diversified in the Fund and the casino sector globally is key to long-term returns. While volatility may run high, the Chinese government likely understands the risk to Western investment if concessions are not made to big casino operators. We believe the risk versus reward is potentially in our favor at current stock levels in those names.
Sincerely yours,
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 (9/30/2021) Fund Inception (02/01/2002)
| 1 Year | 5 Year | 10 Year | Since Inception | |
| VICEX | 10.07% | 3.69% | 9.55% | 8.33% |
| MSCI World Index | 27.98% | 13.77% | 12.50% | 9.56% |
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
