Drink, smoke, profit
You gotta love it: The Vice Fund.
This Dallas-based mutual fund makes no bones about its investment strategy, which could cause self-described socially responsible investors to toss their organic cookies.
Charles Norton, lead manager since 2005, is not overjoyed by his investment pool's evil-sounding moniker, but he's too busy investing in tobacco, gambling, alcohol and weapons companies to worry. (The fund must invest at least 80 percent in those sectors but has plowed 100 percent into them.)
"We're not making a social statement," said Norton, 33. "A great deal goes into research. How it makes you warm and fuzzy is not part of that research. We look at the fundamentals."
And it's worked so far.
With the Dow tumbling in recent weeks, the Vice people were touting its track record.
The no-load fund has consistently outpaced the S&P 500. And when the Dow Jones took a major fall, the Vice Fund dropped 4.2 percent while the S&P fell 6.3 percent from July 19 to 31. The Vice Fund is up about a point over the index for the past 12 months. Morningstar, which rates mutual funds, gives it a five-star score, its highest.
Norton says companies in Vice's portfolio are measurably resilient in a volatile market. "It's definitely a defensive allocation."
Holdings include Boeing; Altria, formerly Philip Morris, which owns a chunk of brewer SABMiller; MGM Mirage casinos; British American Tobacco; InBev, the world's biggest brewer; and Diageo Plc., which makes Johnny Walker Scotch and Guinness Stout.
And Vice has found a market. Investors have handed over more than $120 million, up from $45 million when Norton took over two years ago, he said.
In March, CNBC's madcap investment commentator Jim Cramer compared the Vice Fund and the Socially Responsible Stock Fund. He found that for the 12-month period ending then, the former was up 30 percent, and the latter had fallen 4 percent.
"Nice guys finish last," Cramer concluded. "You can take your stocks from evil companies and invest them in good causes, but you can't do anything with your nonprofits from companies with good-guy behavior."
This Dallas-based mutual fund makes no bones about its investment strategy, which could cause self-described socially responsible investors to toss their organic cookies.
Charles Norton, lead manager since 2005, is not overjoyed by his investment pool's evil-sounding moniker, but he's too busy investing in tobacco, gambling, alcohol and weapons companies to worry. (The fund must invest at least 80 percent in those sectors but has plowed 100 percent into them.)
"We're not making a social statement," said Norton, 33. "A great deal goes into research. How it makes you warm and fuzzy is not part of that research. We look at the fundamentals."
And it's worked so far.
With the Dow tumbling in recent weeks, the Vice people were touting its track record.
The no-load fund has consistently outpaced the S&P 500. And when the Dow Jones took a major fall, the Vice Fund dropped 4.2 percent while the S&P fell 6.3 percent from July 19 to 31. The Vice Fund is up about a point over the index for the past 12 months. Morningstar, which rates mutual funds, gives it a five-star score, its highest.
Norton says companies in Vice's portfolio are measurably resilient in a volatile market. "It's definitely a defensive allocation."
Holdings include Boeing; Altria, formerly Philip Morris, which owns a chunk of brewer SABMiller; MGM Mirage casinos; British American Tobacco; InBev, the world's biggest brewer; and Diageo Plc., which makes Johnny Walker Scotch and Guinness Stout.
And Vice has found a market. Investors have handed over more than $120 million, up from $45 million when Norton took over two years ago, he said.
In March, CNBC's madcap investment commentator Jim Cramer compared the Vice Fund and the Socially Responsible Stock Fund. He found that for the 12-month period ending then, the former was up 30 percent, and the latter had fallen 4 percent.
"Nice guys finish last," Cramer concluded. "You can take your stocks from evil companies and invest them in good causes, but you can't do anything with your nonprofits from companies with good-guy behavior."
posted by CP @ 10:15 AM
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