The launch of the Fundstrat Granny Shots US Large Cap ETF, known as GRNY, in November 2024, has garnered attention due to its overlap with the Dow Jones Industrial Average. The ETF includes a selection of stocks that align with current investment themes, revealing eight common holdings with the Dow, a benchmark comprising 30 significant publicly traded companies.
Among the eight shared stocks, Caterpillar Inc (NYSE: CAT) holds a prominent position, representing 3.28% of GRNY’s assets and ranking as the second-largest holding in the Dow at 9.51%. Similarly, Goldman Sachs Group Inc (NYSE: GS) is the largest holding in the Dow, comprising 11.60% of its assets, while it accounts for 2.91% of GRNY.
The technology sector features prominently with Apple Inc (NASDAQ: AAPL) and Microsoft Corp (NASDAQ: MSFT) included in both portfolios. Apple represents 2.55% of GRNY’s assets, while Microsoft makes up 2.11%. On the Dow, Apple is the 13th largest holding at 3.38%, and Microsoft ranks third at 4.96%.
The ETF also incorporates other notable companies such as Amazon.com Inc (NASDAQ: AMZN), which accounts for 2.16% of GRNY, and NVIDIA Corp (NASDAQ: NVDA), making up 2.51%. This portfolio strategy highlights the ongoing interest in technology and financial sectors within both investment vehicles.
Investment Themes and Performance
The Fundstrat Granny Shots ETF employs a rules-based approach to identify stocks that satisfy criteria based on emerging trends. Current themes include recovery in Purchasing Managers’ Index (PMI), energy stocks, cybersecurity, labor suppliers, and targeting millennials. Stocks aligning with at least two themes are selected for inclusion in the ETF.
As of now, the GRNY ETF is down 0.32% year-to-date but has seen an increase of 18.31% over the past 52 weeks. In contrast, the Dow Jones Industrial Average, with its diverse sector representation, has risen 3.46% year-to-date and 12.08% over the last year.
The Dow’s price-weighted methodology results in significant variations in stock weightings, meaning some companies exert a greater influence on the index despite having lower market capitalizations. This characteristic can impact investment strategies and performance analysis.
Investors may find it noteworthy that both the GRNY ETF and the Dow share four stocks from the so-called Magnificent Seven, which are seen as leaders in their respective sectors. These include major players like Apple, Amazon, Microsoft, and NVIDIA, reflecting a strong alignment in growth prospects and market sentiment.
In conclusion, the intersection of the Fundstrat Granny Shots ETF and the Dow Jones Industrial Average underscores the evolving landscape of investment strategies. As both funds navigate through fluctuating market conditions, the shared stocks may provide insights into broader market movements and potential investment opportunities.
