Fund Score Analysis: GraniteShares Nasdaq Select Disruptors ETF (DRUP)

On August 21, 2023, the GraniteShares Nasdaq Select Disruptors ETF (DRUP) began tracking the Nasdaq US Large Cap Select Disruptors™ Index (NLCSD™), designed to capture 50 of the US's most disruptive, large-cap innovative companies. Through February 14, 2024, DRUP has gained 25.4% on a price return basis, outperforming the S&P 500 Index (SPX) by 11.7%. Year-to-date, DRUP is up 8.1%, while the SPX is up just 4.8%. DRUP’s performance this year puts it in the top 5% versus a universe of 17,000+ funds spanning all sectors, asset classes, and regions/countries. DRUP’s notable performance is reflected in its strengthening technical picture on the Nasdaq Dorsey Wright (NDW) Research Platform.

Nasdaq Dorsey Wright is a provider of technical investment research centering around Point & Figure charting and relative strength analysis, a method of tracking and evaluating securities based on one objective input – price. In November 2023, DRUP’s Point & Figure price trend began trading in an overall positive trend, indicating that DRUP’s price has generally continued to increase. Furthermore, DRUP’s trend chart trades on two consecutive buy signals, confirming demand remains in control. 

DRUP’s price has trended higher, and the magnitude of DRUP’s movement has also strengthened. Compared to the broader market using the S&P 500 Equal Weighted Index (SPW) as a proxy, DRUP is winning the Relative Strength battle on a near and long-term basis. In January, DRUP outpaced the SPW enough to give a market relative strength buy signal, signaling that it has increased at a pace higher than the market and, therefore, has a higher chance for continued outperformance. DRUP maintains a peer relative strength buy signal, confirming that it has increased in price faster than other US Large Cap Blend funds.

Using a rules-based methodology, Nasdaq Dorsey Wright rates mutual funds and exchange-traded funds (ETFs) using the NDW Fund Score System, assigning each fund a score. Fund Scores range between 0 and 6, with 6 being the strongest score possible, and are calculated daily using closing data from the previous trading session. Fund Scores are objectively driven using 19 individual technical data points, each assigned a proprietary weighting. A Fund Score can be broken down into three segments, each accounting for approximately one-third (33%) of a fund’s total score: trend analysis, market Relative Strength analysis, and peer Relative Strength analysis, which were reviewed above.

• Trend: Point & Figure chart trend positive or negative
• Market Relative Strength: compares the relative price movement of a fund versus a major market index benchmark to determine which is stronger – the ETF in question or the broader market.
• Peer Relative Strength: compares the relative price movement of a fund versus a peer index benchmark to determine which is stronger – the ETF in question or its assigned peer group. 

DRUP Fund Score Breakdown: 5.96

The Fund Scoring System is divided into 3 main parts, each accounting for approximately one-third of the total score. Note: individual weightings are proprietary.

As of February 14, 2024, the GraniteShares Nasdaq Select Disruptors ETF (DRUP) has a near-perfect fund score of 5.96, a notable score that reflects the positive technical outlook. This is the highest score DRUP has seen since it began tracking the NLCSD Index; the lowest fund score seen over this period was 3.59 in October 2023. All trend and peer relative strength analysis segments for DRUP are positive, while all but one of the Market Relative Strength metrics are positive. On a strictly technical basis, any mutual fund or ETF with a Fund Score of 4 or higher is considered exceptionally strong, and a higher score indicates a stronger overall outlook, just like we are seeing today with DRUP.

The Nasdaq US Large Cap Select Disruptors™ Index (NLCSD™) is tracked by the GraniteShares Nasdaq Select Disruptors ETF (DRUP).

Sources: Nasdaq Dorsey Wright, Bloomberg.