New fund to follow writer's baby boomer ideas
November 23, 1998
A low-cost brokerage and advisory firm from Dallas is poised to reap the benefits of the investment philosophy of Harry S. Dent who has won notoriety with his notion that baby boomers will lead the greatest economic expansion in U.S. history and drive the economy through the next decade.
The firm, 1-800-Mutuals, has created The Harry S. Dent Fund, a fund of funds that will follow Dent's principal investment theory that was explained in his book, "The Roaring 2000's" and published last April.
"He's a phenomenal adviser," said Richard Sapio, portfolio manager for the fund and ceo of 1-800-Mutuals. Sapio says that one of the driving forces of creating the fund is to use Dent's reputation to promote the 1-800-Mutuals brand. Dent is also a principal in the company.
"The Roaring 2000s," made the New York Times bestseller list in September as a hardcover, and Sapio expects similar success for the softcover edition. Dent, a consultant as well as author, also wrote, "The Great Boom Ahead" in 1993 and is the publisher of the H.S. Dent Forecast, a financial newsletter.
According to documents filed with the Securities and Exchange Commission, Dent believes that one can predict how baby boomers will invest and spend their money, and therefore the best performing sectors of the economy.
Sapio will invest in mutual funds that will benefit most from these baby boomer habits.
Dent and 1-800-Mutuals have collaborated before on a managed portfolio called the Harry S. Dent Generation-Wave Portfolio, which has identical objectives to the new fund.
The managed portfolio is currently invested in Pacific Rim, information technology, financial services and health care funds, including Vanguard Specialty Health Care fund, Pilgrim America Bank & Thrift and Munder NetNet, an Internet fund.
The Harry S. Dent Fund is no-load, has a $1,000 minimum initial investment and charges 1.5 percent in annual fees. The managed portfolio requires a $10,000 initial investment and charges between one-half and one percent annually, depending on the size of the investment.
1-800-Mutuals also offers over 7,000 mutual funds through its fund supermarket and stock and bond trading through its discount brokerage. The company markets through its website and through advertising in USA Today and local newspapers, Sapio said.
Sapio says he plans to offer the Harry S. Dent Fund through his company's and other fund supermarkets.
Kemper Funds has marketed other funds using a popular writer's ideas as a promotional tool. For example, the Kemper-Dreman funds employs the value investing style of David Dreman, a portfolio manager, author and magazine columnist. The association started in 1995 when Kemper bought Dreman's investment adviser, Dreman Value Management.
Using Dent's name to promote the fund is a great marketing idea, says Nan Budinger, a principal and creative director of Metaphor Name Consultants of San Francisco, who has been in the naming business for 13 years.
However, such a powerful name can also be dangerous if Dent himself or his philosophy falls out of favor. If that happened, the funds could have the same fate.
"You have to be careful. Is that person going to have appropriate, meaningful appeal (in the future)?" Budinger said.