Bad Is Good
You can’t have a list like this without including the Vice Fund (VICEX), which invests in tobacco, alcohol, gaming, and weapons and defense manufacturers.
In business since August 2002, it has managed to gather just $231 million in total net assets over more than 11 years. One of the reasons could be its fees — it charges an annual expense ratio of 1.64%, which Morningstar considers high. However, it turns its entire portfolio just once every eight years so the fees are mostly going to the managers of the fund — 0.95% or 55% of its 1.73% MER compared to 39% for the Young Investor Fund — rather than eating up commissions.
Its top 10 holdings account for 48% of its total portfolio. Year-to-date it’s up 27.6% through December 12. Over the past 10 years it has beaten the S&P 500 by 289 basis points annually. If you can put up with all the vice, it’s an excellent large-cap investment.