Kurv Dividend Strategy
Kurv Investment Management offers a suite of Yield Premium Strategy ETFs designed to generate monthly income while preserving capital and providing limited upside exposure to individual stocks. The strategy primarily relies on a covered call approach, which involves holding a stock (or a basket of securities replicating the stock’s performance) and selling call options against it to collect premiums. These premiums, combined with any dividends from the underlying stock and interest income, create a steady cash flow distributed monthly to investors.
Unlike traditional covered call strategies, Kurv aims to balance income generation with capital appreciation by carefully managing option strikes and expirations to mitigate NAV erosion and maintain exposure to the underlying stock’s price movements. The ETFs are managed by professionals with extensive experience from firms like PIMCO and Goldman Sachs, targeting tax-efficient income from tech-heavy exposures that typically offer low or no dividends. The gross expense ratio for these funds is 1.15%, with a net expense ratio of 0.99% (after fee waivers through December 31, 2024).
Top Kurv Funds
Below are the four Kurv ETFs specified, each focusing on a single stock and employing the Yield Premium Strategy. All trade on the NYSE, with performance data as of September 30, 2024, and dividend yields based on available information up to March 2025.
- Kurv Yield Premium Strategy Tesla ETF (TSLP)
- Underlying Stock: Tesla, Inc. (TSLA)
- Objective: Seeks current income with exposure to Tesla’s stock price, subject to a cap on gains.
- Performance (as of 9/30/2024): 44.52% (NAV), 6.69% (market price, annualized).
- Dividend Yield: Forward yield of 42.5% as of this date.
- AUM: $23.17M as of February 7, 2025.
- Stock Price: ~$25.92 (recent data).
- Inception: October 31, 2023.
- Why Notable: TSLP has outperformed peers like YieldMax’s TSLY in price stability, appealing to investors seeking Tesla exposure with high income. Its high yield and Tesla’s volatility make it a standout, though returns vary based on market conditions.
- Kurv Yield Premium Strategy Amazon ETF (AMZP)
- Underlying Stock: Amazon.com, Inc. (AMZN)
- Objective: Generates monthly income while maintaining exposure to Amazon’s stock price, with limited upside.
- Performance (as of 9/30/2024): Not explicitly listed for AMZP, but Kurv ETFs generally show competitive returns.
- Dividend Yield: 23.7% as of this date.
- AUM: Not specified, but actively traded.
- Stock Price: ~$25.00 (recent data).
- Inception: October 30, 2023.
- Why Notable: AMZP targets Amazon’s growth potential, offering income from a non-dividend-paying stock. It’s ideal for investors wanting tech exposure with lower volatility than Tesla.
- Kurv Yield Premium Strategy Apple ETF (AAPY)
- Underlying Stock: Apple Inc. (AAPL)
- Objective: Provides current income with capped exposure to Apple’s stock price.
- Performance (as of 9/30/2024): 15.08% (NAV), 4.12% (market price, annualized).
- Dividend Yield: 22.19% as of this date.
- AUM: Not specified.
- Stock Price: ~$26.12 (recent data).
- Inception: October 26, 2023.
- Why Notable: AAPY benefits from Apple’s stability and modest dividend, making it a lower-risk option among Kurv ETFs. It suits conservative investors seeking tech income.
- Kurv Yield Premium Strategy Netflix ETF (NFLP)
- Underlying Stock: Netflix, Inc. (NFLX)
- Objective: Delivers monthly income with limited exposure to Netflix’s stock price.
- Performance (as of 9/30/2024): 22.93% (NAV), 4.81% (market price, annualized).
- Dividend Yield: 21.55% of this date.
- AUM: Not specified.
- Stock Price: ~$33.42 (recent data).
- Inception: October 26, 2023.
- Why Notable: NFLP targets Netflix’s high-growth profile, offering income from a non-dividend stock. It appeals to investors comfortable with media sector volatility.
Covered Call Strategy for Kurv ETFs
For each ETF, the covered call strategy involves:
- Holding the Stock: The ETF holds shares of the underlying stock (e.g., TSLA, AMZN) or equivalent securities.
- Selling OTM Calls: Kurv sells out-of-the-money calls (e.g., 5-10% above the stock price) with 30-60 day expirations to maximize premiums while allowing some price appreciation.
- Income Sources: Premiums from calls, any stock dividends (e.g., Apple’s), and interest income are distributed monthly.
- Risk Management: Kurv adjusts strike prices and expiration dates to balance income and exposure, aiming to reduce downside risk compared to pure option-income ETFs like YieldMax. Rolling calls before expiration helps avoid assignment and protects distributions.
