An ETF For Gen Z Lands

'ZGEN' hopes to capture the companies favored by the latest generation entering adulthood.

A new ETF that features an 18-year-old child actor on its research team is hoping to become the fund that encompasses the tastes of Generation Z.

The Generation Z ETF (ZGEN) debuted on the Nasdaq Thursday with an expense ratio of 0.60%.

The fund was first conceptualized by Julian Feder, a child actor with 13 film and television credits, and Eitan Prins-Trachtenberg. The two are 18 and 17, respectively, and are listed as research advisors to the portfolio managers led by Leonard Feder, Julian’s father and a 25-year trading veteran who has worked at Lehman Brothers, Bear Stearns and Standard Chartered. Julian Feder began trading stocks at age 13 and developed the idea as a junior in high school.

ZGEN restricts itself only to companies that held their initial public offerings during or after 1997, the year generally noted as the start of Generation Z. An actively managed fund, ZGEN selects 50 stocks deemed to be ready to benefit from the generation approaching early adulthood and the beginning of their working lives.

“We're trying to give our input as members of Generation Z to come up with the most representative portfolio of companies to our generation,” Julian Feder said.

Firms are chosen based on how much of their customer base is made up of Generation Z members, along with their perceived innovative and disruptive qualities. There’s also a subjective ESG-type screen where Gen Z members of the research team can eliminate companies for consideration if they don’t align with the generation’s overarching values.

The fund is free to invest in companies of all market capitalization sizes, all locations and in IPOs and SPACs. However, it eliminates companies with less than $5 million in average trading volume.

ZGEN aims not just to provide exposure to companies popular with Gen Z, but to be an investment vehicle for Gen-Zers itself.

Prins-Trachtenberg argued that his generation doesn’t have enough investment education tools made by other Generation Z members or for that age group, which leaves them interested in risky assets like meme stocks and altcoins.

“Social media is going to be a massive player here. We're really going to try and produce content that both educates generations and gets them interested in the market,” he said. “We believe that by providing a portfolio that they can relate with, that will also increase interest.”

This isn’t the first time an ETF has used an entire generation as an investment theme. The Global X Millennial Consumer ETF (MILN) and the Principal Millennials ETF (GENY) both launched in 2016 and have approximately $231 million in combined assets. The Global X Aging Population ETF (AGNG) has garnered $61 million in assets while aiming for the baby boomer generation and beyond, while the Long Term Care ETF (OLD) ceased trading in October with approximately $34 million in assets.

Contact Dan Mika at [email protected], and follow him on Twitter