It’s been a pretty good year to be an investor in the broad indices, with the popular Vanguard S&P 500 ETF (NYSEARCA:VOO) and Invesco QQQ Trust (NASDAQ:QQQ) both up by double-digits, with two and a half more months to go in the year. Time will tell if the S&P 500 can break the 20% return mark for yet another year.
Either way, keeping things simple has been quite profitable, even as the pace of gains looks to slow as the worries that AI is in a bubble that could burst and pull down both the VOO and QQQ. Indeed, the latest regional banking scare was short-lived, as too were the Trump tariff jitters that caused a bit of turbulence. Some way or another, markets always seem to find their footing as they concentrate on the AI boom at hand, even as the premium on the broad market looks to climb further.
The VOO and QQQ have been amazing (again). But there is one market-beating ETF that’s stealing the show
While the VOO and QQQ have been decent performers, there are a handful of active ETFs that have had an easy time beating the market this year. And as the gains get a bit harder to come by while tech and other themes lead the way, I’m more inclined to give the strong-performing active ETFs such as the Fundstrat Granny Shots U.S. Large Cap ETF (NYSEARCA:GRNY) more of an edge.
The GRNY ETF, which I’ve covered in prior pieces, is up more than 26% year to date. And I think it’s a winner that could continue to win big in 2026, not just because the respectable Tom Lee is running the show, but because of how the ETF was constructed and the powerful names that are underneath the hood.
Perhaps the best way to know if an ETF is right for your personal portfolio is to have a glance at the stocks that make it up. Of course, the management (if we’re talking about an active ETF) and stock-selection methodology are also incredibly important. However, looking at the holdings (beyond the top-10 preferably, especially for equal-weight ETFs such as the GRNY), I think, is a wise idea, especially if you’re looking to gain a leg up over the broad markets.
Is Tom Lee’s Granny Shots approach worth getting behind?
Now, I’m not normally a big fan of betting on outperforming ETFs, especially since it’s so incredibly difficult to stay ahead of the VOO (the S&P 500) and especially the Nasdaq 100 year after year. And while the GRNY has not been around for all too long, with the main attraction in Tom Lee drawing in significant capital inflows early on in the ETF’s life, I do think that the unique mix of thematic growth names has the potential to outshine the rest of the market as this AI boom continues to play out.
And while there are a lot of AI stocks in the GRNY, I don’t see excessive exposure in some of the market’s more speculative names that could be far more vulnerable in the face of a tech sell-off. Also, the equal weighting and exposure to non-tech AI beneficiaries could make the GRNY less at risk than the QQQ should tech and the Mag Seven names roll over.
Of course, the GRNY features a lot of the Mag Seven names. After all, it’s not easy to outperform without them. However, the weightings aren’t out of hand as they are for the QQQ, where three stocks have a double-digit percentage weighting.
The bottom line
In short, the GRNY has some fantastic stocks in it, and a methodology that doesn’t allow for too much conviction in any single name. I think the disciplined approach and good mix of names could allow the GRNY to keep giving the S&P a good run for its money in 2026 and beyond. And, of course, having star strategist Tom Lee aboard doesn’t hurt, given the many right calls he’s made on television.
Sure, taking a granny shot approach with stocks might not be a way to look impressive, but if you’re looking to improve your shooting percentage, perhaps it’s time to give the ETF a closer look.
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