Style tilts, sometimes referred to as portfolio tilts, represent a portfolio’s exposure to various factors that may allow investors to achieve a higher expected return. Historically, various factors have engendered cyclicality across market and economic regimes. For example, a shift in interest-rate expectations may cause one factor to outperform another. The GRNY ETF attempts to capture these regime shifts over time by adjusting the style tilt quarterly. The Fundstrat team utilizes a proprietary mix of style factors including both cyclicality and quality factors. For a given style tilt, the underlying stock selection utilizes the Granny Quantitative Model.

Historically, certain industry groups or stocks may exhibit recurring patterns of performance during specific periods. By reviewing various arrays of returns over long time periods, the GRNY ETF seeks to determine which industries may exhibit superior relative performance over the ensuing 6-month period. The GRNY ETF evaluates its seasonal exposure to industry groups quarterly via the use of proprietary models that analyze historical win ratios. For the industry groups identified, the underlying stock selection utilizes the Granny Quantitative Model.

The PMI is a monthly economic indicator based on survey responses by private-sector companies in the manufacturing and services sectors. The index typically includes factors such as new orders, production, employment, supplier deliveries, and inventories. The PMI is measured on a scale of 0-100, where a reading above 50 indicates expected expansion. Fundstrat Capital sees a relationship between yield-curve dynamics and PMI that imply that the latter has bottomed out, and seeks to gain exposure to companies benefitting from the forecasted recovery.

Generations have personalities shaped by various cultural and technological forces. For most of the past decade, discussions about millennials (96 million, peak size) have focused on their youth and teenage tendencies. Meanwhile, their economic impact on the U.S. and global economy has been accelerating. The GRNY ETF seeks to identify those stocks best positioned to benefit from the spending power and influence of this cohort.

Automation brings cost savings and greater efficiency, while AI mitigates labor shortages and enhances productivity. We identify those companies whose business models are best poised to benefit from the labor-supply dynamics, as well as those firms offering the most accessible, comprehensive, and resilient enterprise AI solutions.

Given the less-than-clear status of the energy transition, the increased incidence of climate-change-caused adverse-weather events and their impact on the power grid, stress on the electrical grid from data-center demand, and geopolitical tensions that endanger energy security, we monitor companies well positioned to perform in this uncertain environment.

As macroeconomic conditions improve, certain industries and companies are in a position to benefit. We analyze their prospects and include them in our portfolio accordingly.