Do investment companies need to market to “Generation X” and “Generation Y” differently than the general investing public? Would new, “hip” investment products encourage individuals falling within these particular demographics to care about their financial future? Thrasher Capital Management was founded on the principle that these markets, as well as minorities, are currently under served by the financial industry.
[The Thraser Funds investment model] seeks to capitalize on the convergence of what the firm believes to be global, generational, and socioeconomic dynamics that touch an array of industries: the Baby Boomer’s increased life expectancy, elongated career life cycle, along with Generations X and Y’s increased access to capital.
To approach this investment model, Thrasher created the GendeX Mutual Fund, and is marketing the investment to Generation X and Generation Y, individuals who do not seem to fit in with the generally-accepted notion of “investor.” A visit to the Thrasher Funds website makes this clear. The first thing you’ll see is a photograph of a group of “non-conformists.” Their individuality is indicated by the diversity of clothing and stature/stance, with no one looking like your typical “professional” investor. “They invest. Do you?” Peer pressure is a powerful force.
If you like, there is the option to peruse the Thrasher Funds website with a soundtrack designed especially for Thrasher Funds’ customers. Play the music at the bottom of the website to listen to a smooth track. It makes you wonder if those who market to youth’s individuality really believe in that individuality.
So what about the GendeX mutual fund [GENDX]? Investors should look past all this marketing and determine whether the investment itself is worthwhile. Their website is not yet ready for prime time, so those seeking data on past performance are pointed to Yahoo Finance’s website. Information there is sparse as well. In GendeX’s short history, it has followed the S&P closely. As I tried to find more information, I discovered that Google Finance has no information on the fund at all. The symbol and fund name are not recognized by Google’s vast financial database.
GendeX invests in companies that are admired by their demographics, such as Apple, Louis Vuitton, Gucci, Volkswagen, Coca Cola, and Nike, among other companies that appeal to the masses, like Time Warner and Google.
The fund features an expense ratio of 1.50%, above average and eight times the expense ratio of VFINX, Vanguard’s index fund that follows the S&P 500. The fees keep on coming. While the fund is happy to accept investors with a low $100 minimum if combined with an automatic investment plan of at least $50 per month, you’ll have to pay $2 per month if your account value is less than $2,500. That’s basically an extra 1% fee or more. If you withdraw money from the fund that has not been invested for over 12 months, you’ll face a 2% redemption fee. Redemption fees are usually used to recoup costs for selling investments with hard-to-find buyers; considering that the underlying investments of GendeX are actively traded, I don’t see a need for this redemption fee.
So will you be cutting back on skateboards and tattoos in order to invest in GendeX? If so, leave a message on Thrasher Funds’ MySpace page where “investing is a party” with 445 other friends.
As someone on the young side of Generation X, I’ll stick with index mutual funds, as boring and unmarketable as they are.
Updated February 6, 2012 and originally published March 27, 2008.