Some might argue that the Vice Fund, the latest offering from Dallas-based, invests in the evils of the world.

The fund, the only product of its kind, buys stock in alcohol, tobacco, gambling and defense companies. Launched on Aug. 15, it will invest in roughly 45 equities and require a minimum investment of $2,500.

Co-manager Dan Ahrens said, which oversees four other products, all funds of funds, is offering the Vice Fund because alcohol, tobacco, gambling and defense stocks consistently post strong performance, even during tough economies.

"The market's been pretty lousy the last couple of years," Ahrens said. "These areas seem to do good through thick and thin. People keep drinking and smoking and gambling."

Ahrens said the fund is considering investments in Harrah's Entertainment, Inc., which runs Harrah's casinos as well as brewer Anheuser-Busch and cigarette manufacturer Philip Morris. found that a portfolio of similar stocks posted cumulative gains of nearly 53% during the past five years, according to the fund's Web site, By contrast, the S&P 500 gained 11.83% during that period, according to the site.

Perhaps it's fitting for this protracted bear market, then, that the fund's mantra is, "When it's good, it's really good. When it's bad, it's even better."

The Vice Fund cuts a sharp contrast to so-called socially responsible investing, or SRI, funds that eschew such stocks on the basis of social or political principles. Those products, offered by the likes of Citizens Funds and PAX World Funds, both of Portsmouth, N.H., typically screen out defense-related stocks, as well as equities from companies that provide addictive or unhealthy products.

SRI companies and the Vice Fund seem to represent two extremes in the social investing universe. In fact, analysts said the inclusion of defense stocks in the Vice Fund suggests that the fund was not designed to invest in the culture's social foibles so much as it is intended to be the antithesis of an SRI fund. Indeed, has dubbed the Vice Fund a "socially irresponsible investment."

Neither Citizens Funds, nor PAX World Funds returned calls seeking comment about the Vice Fund.

A New Low'

But Doug Wheat, the business development director for SRI World Group of Brattleboro, Vt., which publishes information about SRI products, called the fund "tasteless" and said, with a laugh, that "investing had reached a new low."

Ahrens, meanwhile, said it is his philosophy that "investing should be for making money, not for making political statements."

Politics aside, the Vice Fund faces a tough challenge, said Peter DiTeresa, an analyst at Chicago fund tracker Morningstar. He said the fund fits loosely in the category of other gimmick funds such as two products that invested in the golf industry and one fund, called the Pauze Tombstone Fund, that invested in the funeral industry. All three have shut down.

Many of the niche portfolios focus tightly on one sector, rendering them volatile and causing investors to flee when performance tanks, DiTeresa said. The Pauze Tombstone Fund, for example, saw its assets nosedive from $1.3 million at the end of 1997 to roughly $100,000 by the end of the following year, according to Financial Research Corp. of Boston.

But Ahrens is confident the fund will be a success. is contemplating an ad campaign that could include Mutual Funds magazine as well as more unusual venues such as Rolling Stone and Playboy magazines.

Response from investors, meanwhile, has been overwhelming, he said, although some investors have been asking if the fund is for real. "We have to say, Yes, this is real and it's very serious,'" Ahrens said.

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