Home » sin stocks » Sin Stocks Report: Summer Of Sin #21 — Are There Any Sin Stock Mutual Funds

Sin Stocks

While some investors want to invest in individual sin stocks, not everyone does. For some people, it’s easier to invest in a basket of stocks, or ones that are managed in some way. That’s why you may be asking, “Are there any sin stock mutual funds?

Are There Any Sin Stock Mutual Funds?

Not every investor wants to build a sin stock portfolio of individual stocks. Maybe you just don’t want to spend your time researching each stock before you buy or watching them once you do.

For those hands-off investors, a sin stock fund might be an option worth looking into. Funds are managed and researched by capable experts, which means you may gain an advantage because someone is always optimizing the fund’s holdings. Typically, the fund buys the investments, you buy shares in the fund, and then benefit when the underlying investments improve. (You should be aware, though, that some funds have high fees so make sure you do your due diligence before investing to ensure that the higher fees you pay are offset by the greater advantages of managed money.)

Mutual fund investors will love to know that there’s a sin stock fund available. It has changed names from time to time and is currently called USA Mutuals Vice Fund with the very appropriate symbol, VICEX. You can find more about it here: http://www.usamutuals.com/products

The fund has been a sin stock fund for a while, but its name was “The Barrier Fund” for a while, partly because it’s not always popular to invest in sin stocks but also because the whole advantage of sin stocks is that they present a barrier to entry for competitors. (This is a theme you’ll learn about later.)

The fund invests in companies that have these characteristics:

Natural barriers to new competition; Steady demand regardless of economic condition; Global Marketplace – not limited to the U.S. economy; Potentially high profit margins; Ability to generate excess cash flow and pay and increase dividends

… and that describes well the advantage of sin stocks.

So, what stocks does the fund hold?

Funds are managed and therefore their holdings change. You can check out the holdings of the Vice fund here: http://portfolios.morningstar.com/fund/holdings?t=VICEX

At the time of this writing, the fund holds many stocks, all of which are sin stocks. In order of their weight in the fund, here are the top 10 holdings…

  1. Altria (MO)
  2. MGM Resorts (MGM)
  3. Philip Morris International (PM)
  4. Reynolds American (RAI)
  5. American Outdoor Brands (AOBC)
  6. Las Vegas Sands (LVS)
  7. Imperial Brands (IMB)
  8. Wynn Resorts (WYNN)
  9. Raytheon (RTN)
  10. Constellation Brands (STZ)

There are many other sin stocks in the fund as well.

At the time of this writing, this is the only strictly sin stock fund. However, many other funds may own one or more sin stocks as part of their holdings.

DISCLAIMER

Nothing on this site is a recommendation because, hey, I can't read your mind and I don't know what you have in your portfolio, and I'm not a licensed financial advisor. So never EVER trade without doing your due diligence. If you want more information about this fascinating topic, please check out the Sin Stocks Disclaimer page which basically says the same thing but more emphatically.