(Bloomberg) — Wall Road prognosticators are inclined to huddle across the consensus, afraid to face out for concern of being unsuitable. Then there’s Tom Lee.
The chief funding officer at Fundstrat Capital has made his identify with daring calls (the S&P 500 at 15,000; Bitcoin to $10 million). His unabashedly bullish takes, for which he makes no apologies, have drawn legions of on-line followers on this anything-goes period of market hypothesis — fueled by do-it-yourself retail traders.
Now, the previous JPMorgan Chase & Co. strategist is trying to money in on his renown with a brand new exchange-traded fund, the Granny Photographs US Giant Cap ETF (ticker GRNY), which launched earlier this month and has already raked in additional than $400 million. It’s the primary of what he hopes shall be many to observe.
The fund’s identify, just like the listing of fairness suggestions Lee has offered shoppers since 2019, is derived from an unconventional basketball free-throw fashion he likens to his systematic, theme-based stock-picking course of. It could not look the best, Lee says, however it has the very best probability of success.
“Our shoppers and their loyalty and the truth that we’re nonetheless rising actually quickly as a analysis agency isn’t just as a result of we’re bulls,” Lee stated in an interview, including the agency has a devoted institutional following as effectively. “It’s as a result of we’ve given them many causes to know why markets ought to do what they’re doing.”
The ETF is off to a powerful begin. GRNY is up 2.2% since its early November launch, in comparison with a 0.2% advance for the S&P 500 over the identical span. Its $412 million of inflows places it within the high 10% of fund debuts this yr based mostly on pace of asset accumulation, in accordance with knowledge compiled by Bloomberg Intelligence.
Nonetheless, GRNY is launching amid a troublesome run for inventory pickers. Roughly two-thirds of enormous cap managers have underperformed the S&P 500 this yr via the top of October, knowledge from Strategas Analysis present. In actual fact, greater than half of energetic managers have trailed the benchmark in 14 of the final 15 years.
Thematic ETFs have additionally fallen out of favor just lately, with outflows in 9 out of 10 months this yr via October, Bloomberg Intelligence knowledge present.
That received’t deter Lee. GRNY relies on 4 longer-term themes, together with easing monetary circumstances and world labor suppliers, and three shorter-term ones like seasonality and elegance tilt. Shares that aligned with two or extra of the themes are included within the fund. Meta Platforms Inc. falls into 5 themes, for instance, whereas Google father or mother Alphabet Inc. and Garmin Ltd. match into 4.
“It’s not a black field course of,” stated Lee, who added that he and his group have obtained optimistic suggestions for his or her transparency. “Granny Photographs is giving individuals a very good understanding of why they’re proudly owning this.”
High holdings embrace police and army tools producer Axon Enterprise Inc., Tesla Inc. and CrowdStrike Holdings Inc. The fund, which consists of some 35 shares, shall be rebalanced quarterly. The themes, too, are dynamic.
Being perennially bullish doesn’t all the time repay, in fact. Each 2018 and 2022 have been troublesome years for danger property and, in flip, Lee’s optimistic outlook.
But final yr his S&P 500 forecast was the most correct amongst greater than 20 Wall Road strategists tracked by Bloomberg because the gauge superior 24%. This yr is more likely to be an identical story because the benchmark’s 26% advance has exceeded even probably the most bullish estimates. He just lately advised Bloomberg’s Odd Heaps podcast that the S&P 500 might hit 15,000 by 2030.
In the case of Bitcoin, he’s been predicting the digital token would hit $100,000 since a minimum of 2018. In February, he forecast the digital foreign money would attain $150,000 by year-end, primarily due to a supply-demand imbalance as a result of a deliberate discount within the rewards miners obtain, and incoming president Donald Trump’s pledge to arrange a nationwide Bitcoin stockpile.
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Lee, who co-manages the fund with Ken Xuan, is the most recent in a rising listing of distinguished economists and traders to launch ETFs, becoming a member of the likes of Nouriel Roubini, Analysis Associates’ Rob Arnott and others.
Nonetheless, it takes greater than only a recognizable identify to launch a profitable fund, he stated. “I don’t suppose simply because somebody has a reputation that all of the sudden they will put out an ETF and it attracts property,” Lee stated.
Finally, the plan is for GRNY to be the primary of quite a few ETFs based mostly on Lee’s funding philosophy.
“We’re already planning a full part of what follows this one,” he stated.
