In a recent episode of “Behind the Ticker,” Howard Chan, founder of Kurv Investment Management, discussed his unique approach to ETFs and how his firm leverages institutional-grade strategies to benefit all investors. Chan, who began his career as an engineer, transitioned to finance after stints at Goldman Sachs and PIMCO, where he led the ETF business in Europe. After returning to the U.S., Chan was inspired by discussions with advisors to launch Kurv Investment Management with a mission to make tax-efficient, institutional-grade strategies accessible to a broader range of investors.
About Howard Chan and Kurv Investment Management
Kurv’s focus on tax efficiency and institutional-grade strategies is central to its product design. Chan explains that while many institutional strategies are highly effective, they are often tax-inefficient for retail investors. Kurv’s goal is to bring these sophisticated strategies to all investors while minimizing tax implications. One way the firm achieves this is by incorporating techniques such as volatility risk premia and other derivatives, previously only available to the largest institutions, into their ETFs.
Investment Strategy and Approach
A key highlight of the conversation is Kurv’s innovative technology-focused ETF, the KQQQ ETF (also referred to as “KQs”). This fund targets strategic exposure to the largest technology companies, aiming to deliver asymmetric upside while mitigating downside risk through dynamic covered call strategies. Chan explains that KQQQ is designed for investors who seek growth in technology but are also concerned about the sector’s inherent volatility. The ETF combines momentum signals with a dynamic covered call strategy to capture upside during growth phases and generate income during periods of market correction or sideways trading.
Chan further discusses how KQQQ leverages smart security selection by focusing on 15 to 20 of the most dominant technology names, including companies that have fundamentally changed their industries through technological innovation. The fund dynamically overweights stocks showing positive momentum and deploys covered call strategies on those exhibiting negative momentum, creating a balanced approach that seeks to maximize returns while protecting against downside risk. The strategy offers a way for advisors and investors to maintain tech exposure in their portfolios with added income and downside mitigation.
Deeper Dive: Insights from the Full Conversation
Beyond the headline strategy, the full conversation between Brad and Howard Chan covered several additional themes worth highlighting for advisors and investors.
On Process and Philosophy
And so, if you were income focused or dividend focused investor, and you want that income, generally you have to overweight a few common sectors. There are financials, utilities and energies, right? And you're underweight tech to get that dividend yield. And if you think about that, you're actually overweighting older parts of the economy, right? You used to be energy is the largest part of the Dow. Financial also was a very component, those are much smaller now. And then you're underweight the growth at part of the economy, right?
Small cap is much more volatile. So, in the asset allocation, that's always a smaller part of your portfolio, right? So, you can't, you can't just allocate yourself out of a large cap. So, that's why we decided that downside mitigation is actually more important, because you have this core holding you have to hold for your risk exposure. And then maybe just, why do we think about using income as downside mitigation instead of buying protection, right? I personally have never really seen a tail risk hedging strategy that works.
Market Context and Positioning
So, we could have just did a basket of the six ETFs. But we actually went down back to the drawing board and say, if what is a strategy we want in our portfolio, right? We know the weaknesses of cover call strategies. We want the upside, but we also want the income. So, that's how we came to this dynamic waiting to, again, asymmetrically get the upside and then cushioned the downside for the strategy. Well, I think the strategy is, I mean, this is episode 54.
So first of all, I forgot to mention in the 1520 names we actually re-balance quarterly, because we don't want short-term volatility to incur cost. So one of the things you might not be able to manage the market, but the one thing you can manage is the cost and the fund. So we want to minimize that. In terms of the momentum waiting, we do, again, we take a longer view. So, and when I mean that is, if this is an exposure that is going to be in your portfolio for 3 to 5 years, the shorter signal would be on a monthly basis, not on a daily basis.
Yeah, that's also part of the design, right? So, so when I was a Goldman, I was actually the asset allocator for huge, huge funds to make decisions about asset allocation. So, let's start with essentially a 64 year portfolio, right? This would, would fit into obviously the large cap bucket, large cap growth. We think it would be good substitute for just a triple Q allocation. The reason why maybe we named it K triple Q, just for the downside mitigation, right?
Notable Insights
"So, that's why we decided that downside mitigation is actually more important, because you have this core holding you have to hold for your risk exposure."
Key Takeaways
- In a recent episode of “Behind the Ticker,” Howard Chan, founder of Kurv Investment Management, discussed his unique approach to ETFs and how his firm leverages institutional-grade strategies to benefit all investors.
- A key highlight of the conversation is Kurv’s innovative technology-focused ETF, the KQQQ ETF (also referred to as “KQs”).
- This fund targets strategic exposure to the largest technology companies, aiming to deliver asymmetric upside while mitigating downside risk through dynamic covered call strategies.
- Chan explains that KQQQ is designed for investors who seek growth in technology but are also concerned about the sector’s inherent volatility.
- The ETF combines momentum signals with a dynamic covered call strategy to capture upside during growth phases and generate income during periods of market correction or sideways trading.
- The fund dynamically overweights stocks showing positive momentum and deploys covered call strategies on those exhibiting negative momentum, creating a balanced approach that seeks to maximize returns while protecting against downside risk.
What This Means for Advisors
For financial advisors evaluating options for client portfolios, this conversation with Howard Chan highlights important considerations around income investing. Understanding the strategy behind each fund—not just the ticker—helps advisors make more informed allocation decisions and better communicate the rationale to clients.
The themes of income investing and portfolio construction discussed in this episode are particularly relevant in the current market environment, where advisors are increasingly looking for differentiated solutions that go beyond traditional benchmarks.
Listen to the Full Episode
This article is based on an episode of Behind the Ticker, hosted by Brad Roth, Founder and CIO of THOR Financial Technologies. For the full conversation with Howard Chan, including additional nuances and details, listen on Spotify, Apple Podcasts, or watch on YouTube.