Tom Lee's GRNY ETF Shows 26.7% Dow Overlap Amid Market Selloff

The Benzinga analysis published on February 12, 2026 reveals significant overlap between Fundstrat’s Granny Shots US Large Cap ETF (GRNY) and the Dow Jones Industrial Average, with eight common holdings representing approximately 26.7% of the Dow’s 30 components [1]. This overlap carries particular significance given the broader market context, as the same session witnessed a pronounced selloff with the Nasdaq Composite falling 2.37% and the S&P 500 declining 1.78% [2]. The eight overlapping stocks—Caterpillar (CAT), Goldman Sachs (GS), Apple (AAPL), JPMorgan Chase (JPM), NVIDIA (NVDA), American Express (AXP), Amazon (AMZN), and Microsoft (MSFT)—demonstrate sector concentration in technology (3 stocks) and financials (3 stocks), with the remaining positions split between industrials and consumer discretionary [1].

The GRNY ETF, which closed at $24.52 representing a 2.15% daily decline, has demonstrated substantial growth trajectory with assets under management surpassing $4 billion in January 2026, establishing it among the fastest-growing actively managed equity ETFs [3]. The ETF’s methodology requires holdings to appear in at least two of six current themes: PMI recovery, energy sector exposure, cybersecurity, labor suppliers, millennial-focused companies, and easing financial conditions [1]. This rules-based approach provides built-in diversification and active rebalancing mechanisms while maintaining exposure to quality large-cap U.S. equities. The thematic criteria create a systematic filter that Tom Lee’s team believes identifies companies positioned to benefit from prevailing macroeconomic conditions.

Today’s market performance data reveals differential impact across the overlapping stocks, with technology names experiencing the most pronounced selling pressure. Apple (AAPL) declined 5.00% to $261.73, while Goldman Sachs (GS) fell 4.24% to $904.55, and American Express (AXP) declined 3.14% to $342.88 [0]. In contrast, Microsoft (MSFT) demonstrated relative resilience with only a 0.63% decline to $401.84 [0]. This dispersion suggests that while the overlapping stocks share Dow membership and thematic qualification, their individual fundamental characteristics and sector dynamics continue to drive distinct price performance within the group.

The overlap analysis reveals important structural characteristics about GRNY’s positioning relative to traditional market benchmarks. By maintaining 26.7% overlap with the Dow while pursuing a distinct thematic selection methodology, GRNY offers investors exposure to established quality names through a rules-based framework rather than traditional cap-weighted indexing. This hybrid approach provides access to “Magnificent Seven” technology exposure—Apple, Microsoft, NVIDIA, and Amazon—while incorporating financial sector representation that may offer diversification benefits during periods of technology weakness [1]. The equal-weighted nature of the Dow may also provide some balance against mega-cap concentration risks present in other major indices.

Fundstrat’s Tom Lee has articulated a market outlook that contextualizes current volatility within a broader constructive framework. Rather than interpreting recent selloffs as the end of the bull market, Lee characterizes the dynamics as a “shift in leadership beneath the surface” that represents mid-cycle corrections typical of extended market advances [4]. This perspective suggests that while sector rotation may temporarily disadvantage technology-exposed positions, the underlying economic fundamentals supporting quality corporate earnings remain intact. The firm’s emphasis on equal-weighted indices, cyclicals, and financials as showing resilience despite mega-cap pressure aligns with today’s sector performance data showing Consumer Defensive (+2.03%) and Utilities (+0.40%) outperforming more speculative sectors [0].

The valuation landscape across overlapping stocks presents a heterogeneous picture that warrants careful analysis. Financial sector representatives—JPMorgan Chase (15.11x P/E) and Goldman Sachs (17.62x P/E)—trade at relatively attractive valuations by historical standards, potentially offering downside protection through valuation support [0]. Conversely, NVIDIA (46.39x P/E) and Caterpillar (38.67x P/E) occupy premium valuation territory that may leave them more vulnerable to multiple compression should market conditions remain challenging [0]. This valuation dispersion creates opportunities for investors seeking to adjust exposure based on risk tolerance and return expectations within the overlapping stock universe.

The current market environment presents elevated short-term risk for GRNY and its overlapping holdings. The February 12, 2026 session represents a significant market selloff with technology stocks leading declines, suggesting heightened volatility in the technology-exposed overlapping positions [2]. AI-related concerns have emerged as a specific risk factor, with new AI tools from Anthropic triggering broad sell-offs in software and AI-adjacent sectors. While Wedbush Securities characterizes market reaction as reflecting an “Armageddon scenario for the sector that is far from reality,” the uncertainty could impact Apple’s AI initiatives, Microsoft’s Copilot, and NVIDIA’s GPU demand in the near term [5]. The concentration risk inherent in eight overlapping stocks—three in technology and three in financials—creates vulnerability to sector-specific headwinds, with financial services (-2.93%) and technology (-2.39%) among the worst-performing sectors on February 12 [0].

Despite near-term headwinds, several factors suggest potential opportunity within the overlapping stock universe. The rules-based multi-theme approach provides systematic rebalancing that may capture sector rotation opportunities as leadership shifts [1]. Financial sector valuations at 15-18x P/E represent meaningful discount to the broader market, potentially providing downside support and upside optionality should the defensive sector thesis prove correct [0]. Additionally, Fundstrat’s observation that gold and silver are star performers in 2026 year-to-date may indicate sector rotation opportunities toward basic materials, which could benefit industrials like Caterpillar [6]. The ETF’s $4 billion+ AUM provides institutional-grade liquidity depth that facilitates efficient trading for investors adjusting positions [3].

The current market selloff presents elevated short-term risk with unknown duration, suggesting investors should maintain risk awareness over the immediate 1-4 week horizon. The AI sector concerns represent a developing narrative that requires monitoring over the coming weeks, as company-specific AI developments and earnings reports may clarify the sector’s fundamental trajectory. The multi-theme methodology implies quarterly rebalancing cycles that create natural entry points for systematic investors rather than tactical traders seeking short-term gains.

The analysis is based on Benzinga reporting published February 12, 2026, which identified eight overlapping holdings between Fundstrat’s Granny Shots US Large Cap ETF and the Dow Jones Industrial Average [1]. The GRNY ETF, trading at $24.52 with $2.81 billion market capitalization and 30.41x P/E ratio, has generated +18.31% YTD returns while experiencing recent pullback amid broader market volatility [0]. The eight overlapping stocks span technology (Apple, Microsoft, NVIDIA), financials (Goldman Sachs, JPMorgan, American Express), consumer discretionary (Amazon), and industrials (Caterpillar), with individual daily returns ranging from -5.00% (Apple) to -0.63% (Microsoft) during the February 12 session [0].

Sector performance data reveals defensive areas outperforming, with Consumer Defensive (+2.03%) and Utilities (+0.40%) providing relative strength while Financial Services (-2.93%) and Consumer Cyclical (-2.88%) faced headwinds [0]. Fundstrat’s growth trajectory for the Granny Shots product line extends beyond GRNY, with the small and mid-cap version (GRNJ) reaching $255 million in assets within approximately 30 trading days [3]. The thematic framework requiring stocks to appear in at least two of six categories—PMI recovery, energy, cybersecurity, labor suppliers, millennial focus, and easing financial conditions—provides the analytical foundation for the selection methodology [1].

Investors evaluating GRNY or its overlapping components should note the elevated market volatility environment, concentration in technology and financial sectors, and the developing AI disruption narrative affecting software and technology valuations [5]. Tom Lee’s constructive long-term outlook contrasts with near-term market weakness, suggesting the overlapping exposure may benefit from eventual market stabilization and leadership rotation toward equal-weighted and cyclical exposures [4].