Trading Sins & Vices

05/18/2017 2:50 am EST

Focus: STOCKS

Mark Skousen

Editor, Forecasts & Strategies, High-Income Alert

Although some traders and investors choose to avoid certain sectors for personal reasons, Mark Skousen, editor of Forecasts & Strategies, has seen ongoing gains from two vice mutual funds; one is focused on military and defense stocks and the other buys what are often called "sin" stocks.

The “Vice Fund,” officially known as US Mutuals Vice Investor (VICEX) , is up over 10% year to date.

VICE invests in so-called “sin” stocks such as tobacco, alcohol, gambling, military and gun manufacturers, which tend to be relatively stable during downturns.

Current holdings include Altria (MO) and Philip Morris (PM), both tobacco companies; MGM Resorts (MGM) and Wynn Resorts (WYNN), both gambling firms; American Outdoor Brands (AOBC), maker of Smith & Wesson guns; and Raytheon (RTN), a defense contractor.

Fidelity Select Defense & Aerospace Fund (FSDAX)  continues to perform well and is up nearly 8% so far this year. President Trump has proposed a sharp increase in military spending.

In addition to Raytheon, top holdings include Boeing (BA) and Lockheed Martin (LMT), as well as United Technologies (UTX), Northrop Grumman (NOC) and Transdigm Group (TDG).

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