Market Updates: ETF Insights from Tomley
Tomley, a veteran in the market, is exploring two new themes for his Fundstrat Granny Shots US Large Cap ETF.
During a recent appearance on CNBC’s “ETF Edge,” he shared insights that suggest immediate reductions in sovereign security may be achievable.
“There’s clearly a mechanism for businesses to adapt their supply chains within their own countries, and that’s a notable shift,” he mentioned, anticipating that this won’t take a year or two to materialize.
He also discussed the generational differences, mentioning how Gen Z compares to millennials. Interestingly, millennials were referred to as the “engine” of the market back when FundStrat first delved into this analysis seven years ago.
“So, it’s essential to pivot our focus to Gen Z and Gen Alpha, meaning we might need to adjust our demographic themes towards a younger audience,” he commented, adding that while it might not be an overnight change, he’s certainly contemplating it.
The concept for the Granny Shots ETF was inspired by the unique free throw technique of NBA star Rick Barry.
“If you invest in the strongest stock of each theme, you essentially carry the banner for that idea. So we figured, why not approach it like Rick Barry? Lee will execute the proper basketball throw mechanics,” Tomley explained.
According to Tomley, the ETF is based on seven themes that FundStrat believes will shape the market in the coming decade, covering everything from millennials to energy security. For a stock to qualify as a “grandma shot,” it must align with at least two of those themes.
“We steer clear of subpar stocks. It’s crucial that they generate revenue and boast high return on invested capital,” he added. “We make adjustments every quarter.”
Since its launch on November 7th, the Granny Shots ETF has drawn significant investor interest. By May, FundStrat reported the ETF had exceeded $1 billion in assets under management, and as of last week, it had reached $1.3 billion.
Since its inception, the ETF has seen a growth of 13% through Thursday. It has outperformed the S&P 500 this year, with the index climbing nearly 15% since January 1st, compared to the ETF’s approximate 7% rise.
As of July 3rd, Fundstrat reported that its top three holdings are Robinhood, Oracle, and AMD.
ETF expert Dave Nadig noted that he has recently seen active management styles in ETFs gaining popularity.
“Tom is definitely a part of that trend,” Nadig remarked during the same interview. “Incorporating an active management approach for both stock selection and thematic elements seems beneficial for investors. It’s something they can easily grasp.”
