Wall Street Bulls Dan Ives and Tom Lee Thrive with AI-Focused ETFs
While many struggle to beat the market and attract new investments, Dan Ives of Wedbush Securities and Tom Lee of Fundstrat Global Advisors are achieving both. Their success stems from launching ETFs heavily invested in technology stocks benefiting from the AI boom, and leveraging their established personal brands to draw investors.
The Secret Sauce: Outperformance and Inflows
The strategies employed by Ives and Lee have resulted in significant outperformance compared to the S&P 500 Index and substantial inflows of capital into their respective funds. This double act is particularly notable as many traditional stock pickers face client attrition.
ETF Performance and Investor Interest
Tom Lee's Granny Shots US Large Cap ETF (GRNY) has attracted approximately $2.5 billion in assets in under a year. Dan Ives's Wedbush AI Revolution ETF (IVES) has accumulated around $750 million since its launch in June. GRNY is up 23% this year, while IVES is up 25%, both outperforming the S&P 500 Index.
Dan Ives's Perspective on the AI Theme
Ives emphasized his intention to create an accessible investment vehicle for both retail and institutional investors seeking exposure to the AI theme. He aimed for a fund that was simple enough for anyone to understand, even "someone in junior high school."
Potential Risks and Lessons from the Past
Concentrated bets on technology stocks, which have seen significant valuation growth, carry inherent risks. A market pullback could disproportionately affect these funds. Furthermore, investors in high-performing ETFs can be fickle, quickly entering during market surges and exiting when the tide turns. The ARK Innovation ETF (ARKK), led by Cathie Wood, serves as a cautionary tale, having experienced significant outflows after a sharp decline.
Past Missteps and Reversals
Both Lee and Ives have faced challenges in the past. Lee issued a premature "buy the dip" recommendation in February that preceded a more substantial selloff, for which he later apologized. Ives, a long-time Tesla bull, has adjusted his outlook on the company. He initially cut his price target on Tesla before reversing course and declaring that the company had entered a "golden age."
