Howard Chan

Howard Chan is the founder of Kurv Investment Management. Trained as an electrical engineer and computer scientist, Howard found his way into finance after realizing that the complexity of financial markets offered intellectual challenges that engineering school never mentioned. On this episode of Behind the Ticker, Howard joins Brad to discuss KQQQ, the Kurv Technology Titans Select ETF, which takes a concentrated, active approach to technology investing with a built-in covered call overlay that adapts based on momentum signals.

From Engineering to Finance

Howard's path to founding an ETF firm started in an engineering lab. During an internship, he realized he was spending all day in front of a computer with no human interaction, which didn't suit him. He tried technical consulting, which had more interaction but still felt boring. The pivot to finance came when he recognized that financial markets are systems so complex that you can never fully capture them, unlike engineering problems that have defined solutions. That infinite complexity hooked him, and he's been in finance ever since. In his alternate life, he admits he almost became a conductor. He plays piano and violin and is deeply into music.

How KQQQ Works: Technology Concentration Plus Adaptive Covered Calls

KQQQ starts with a concentrated portfolio of 15 to 20 technology companies. Howard defines technology broadly, not just software and semiconductors, but any company that has used technology to leap forward in its vertical. This includes Netflix (which transformed media delivery), Tesla (which used technology to reshape automotive), and the more obvious semiconductor and cloud computing names. The fund researched the past 20 years of data and found that the top 15 names on the NASDAQ have consistently outperformed the broader NASDAQ 100 by roughly 400 basis points annually. That outperformance persists even though conventional wisdom says larger companies should grow slower.

On top of this concentrated equity portfolio sits a covered call overlay that adapts based on momentum conditions. Here's the key innovation: when a stock shows positive momentum (strong upward trend), the fund does not write covered calls on it. It lets the position run to capture full upside. When momentum wanes and the stock enters a corrective or sideways phase, the fund writes covered calls to generate income during the period of reduced growth expectations.

This is the opposite of static covered call strategies that write calls on everything regardless of conditions. Howard's argument is that static covered call strategies systematically cap your winners, which are exactly the positions where you want unlimited upside. By only writing calls during periods of weakening momentum, KQQQ aims to keep upside exposure during trending markets and generate income during corrective phases. The premium from covered calls also provides a modest cushion during drawdowns.

Strategic Exposure, Not a Trading Vehicle

Howard positions KQQQ as a strategic allocation with a three to five year holding period, not a trading vehicle. The thesis is that dominant technology companies have extreme pricing power and competitive advantages that compound over time. The covered call overlay is designed to smooth the ride and generate income along the way, but the core bet is on the continued outperformance of technology leaders.

He acknowledges the concern about technology valuations being rich. Kurv anticipated this before launching and designed the covered call component specifically to address it. During exuberant phases where technology stocks become overvalued, the momentum signals will eventually deteriorate, triggering more call writing. During corrections, the premium income provides a buffer. During the next rally phase, the calls come off and the positions participate fully in the upside. The cycle of switching between growth mode and income mode is what Howard believes makes the product work across different market environments.

From an asset allocation perspective, Howard suggests KQQQ belongs in the growth or technology sleeve of a portfolio, but with a differentiated risk profile compared to a simple QQQ allocation. The concentrated exposure gives you more upside potential from the best names, while the adaptive covered call overlay manages the downside that comes with that concentration. The income generated from call writing during sideways or corrective periods is excess capital the investor wouldn't have otherwise had.

Key Takeaways

• KQQQ holds 15-20 concentrated technology names that have historically outperformed the NASDAQ 100 by roughly 400 basis points annually over 20 years of data.
• The adaptive covered call overlay writes calls only when momentum signals weaken, preserving full upside during trending markets and generating income during corrections.
• Technology is defined broadly: any company that used technology to dominate its vertical, including Netflix, Tesla, and traditional semiconductor and cloud names.
• Howard positions KQQQ as a 3-5 year strategic allocation, not a trading vehicle. The covered call component is designed to smooth the ride across market environments.
• Howard is a trained engineer (EECS) who founded Kurv after discovering that financial markets offered the kind of infinite complexity that engineering problems couldn't match. Learn more at kurvinvest.com.

Listen to the full conversation on Spotify, Apple Podcasts, or YouTube.