Fundstrat’s Granny Shots US Large Cap ETF (GRNY) continues to outperform the broader U.S. equity market in 2026, reinforcing investor interest in actively managed thematic portfolios during an AI-driven bull market. The fund has delivered a year-to-date return of approximately 10.4%, modestly ahead of the 9% gain recorded by the S&P 500. At the same time, Fundstrat co-founder Tom Lee has reiterated his bullish outlook for U.S. equities, projecting the benchmark index could eventually climb to 8,000 as corporate profitability and long-term structural growth trends remain intact.

Thematic Investing Drives GRNY’s Performance

Unlike traditional index funds, GRNY follows a rules-based strategy built around multiple long-term investment themes. Portfolio holdings must align with at least two structural trends identified by Fundstrat, including artificial intelligence, cybersecurity, energy security, reshoring, infrastructure modernization, and changing consumer demographics.

This approach has resulted in significant allocations to companies benefiting from AI infrastructure expansion, power generation, cloud computing, and industrial electrification. Leading positions include semiconductor manufacturers, industrial equipment providers, cloud technology companies, and businesses supporting digital transformation across the global economy.

The strategy has resonated with investors seeking diversified exposure to multiple secular growth trends without concentrating solely on the largest technology companies.

Interest Rates Remain the Biggest Macro Variable

Despite its recent outperformance, GRNY remains highly sensitive to movements in long-term interest rates. Many of the fund’s largest holdings are growth-oriented companies whose valuations are influenced by Treasury yields, making the direction of monetary policy an important driver of future returns.

Elevated bond yields tend to reduce the present value of future earnings, placing pressure on higher-growth stocks. Conversely, declining yields often support valuation expansion across technology and AI-related sectors. As markets continue evaluating inflation, Federal Reserve policy, and economic growth, Treasury yields are expected to remain a major influence on investor sentiment toward thematic growth portfolios.

Tom Lee’s optimistic outlook for the S&P 500 assumes that earnings growth and corporate margins continue improving, providing support for equity valuations despite ongoing macroeconomic uncertainty.

Quarterly Rebalancing Could Reshape the Portfolio

Another important catalyst for investors will be GRNY’s upcoming portfolio rebalance. Fundstrat has indicated that additional long-term themes—including sovereign security and Generation Z consumer spending—could become part of the ETF’s investment framework.

Any expansion of thematic exposure could meaningfully alter the fund’s sector allocations by increasing weightings toward defense, industrial infrastructure, energy transition, or consumer-oriented businesses while potentially reducing its current concentration in AI infrastructure companies.

Such adjustments would diversify the ETF’s performance drivers and may reduce its correlation with technology-heavy benchmarks such as the Nasdaq 100. However, they could also alter the characteristics that have contributed to the fund’s recent outperformance.

Looking ahead, GRNY’s ability to continue outperforming the broader market will likely depend on several interconnected factors, including interest rate trends, corporate earnings growth, and the evolution of its thematic investment strategy. While artificial intelligence remains an important driver of returns, expanding exposure to infrastructure, energy security, and other structural growth themes could position the fund to benefit from a broader range of long-term economic transformations. Investors will closely monitor both macroeconomic developments and future portfolio adjustments as they assess whether Tom Lee’s bullish outlook for U.S. equities continues to play out.