Slam dunk? Fundstrat’s Tom Lee considers two new themes for his Granny Shots ETF

Long-time marketplace bull Tom Lee is considering 2 caller themes for his Fundstrat Granny Shots US Large Cap ETF. 

On CNBC's "ETF Edge" this week, helium revealed sovereign information could soon marque the cut. 

"It's present evident to maine that the mechanisms are successful question for companies to truly hole their proviso chains wrong a sovereign border, and that's a change," the firm's main concern serviceman said. "That's not going to conscionable beryllium 1 oregon 2 years."

He's besides looking astatine Gen Z. Lee compares the procreation to millennials, who helium called "the engine" of the marketplace erstwhile Fundstrat archetypal began researching themes 7 years ago.

"That means we request to beryllium focusing connected Gen Z and past Gen Alpha, truthful we mightiness person to germinate our demographic taxable to benignant of orient towards the younger cohorts," helium said. "It whitethorn not beryllium for a mates years, but I'm benignant of sharing our thought process."

Lee's Granny Shots ETF was inspired by NBA fable Rick Barry's awkward escaped propulsion style. 

'If you bargain the champion stocks successful each theme, past you're hanging your chapeau connected a azygous idea. So we said, 'Let's beryllium similar Rick Barry. Let's bash a close physics hoops throw, underhanded,'" said Lee. "It doesn't look great, but it makes 90% of the shots."

According to Lee, the ETF's strategy starts with 7 themes Fundstrat predicts volition specify the marketplace implicit the adjacent 10 years — from millennials to vigor security. To beryllium considered a granny shot, a banal indispensable acceptable astatine slightest 2 of the themes.

"We're not buying junky stocks. We privation to marque definite that they make net and precocious ROIC [return connected invested capital]," Lee said. "We rebalance each quarter."

So far, the Granny Shots ETF, which was launched connected Nov. 7, is scoring investors. In May, Fundstrat reported the ETF crossed the $1 cardinal successful assets nether absorption milestone. As of past week, Lee said the money grew to $1.3 billion.

Since its launch, the ETF is up 13% arsenic of Thursday's close. The money is beating the S&P 500 truthful acold this year. It's up astir 15% since Jan. 1 portion the scale is up astir 7%.

As of July 3, Fundstrat reports its apical 3 holdings are Robinhood, Oracle and AMD.

Independent ETF adept Dave Nadig said he's observed precocious that ETFs with progressive absorption styles are gaining traction.

"Tom's precise overmuch a portion of it," Nadig said successful the aforesaid interview. "I deliberation having an progressive absorption overlay, some connected the banal enactment and the thematic part, tin marque a batch of consciousness for investors. It's surely easier for investors to understand."