In this episode of Behind the Ticker, Brad invites Yuri Khodjamirian, CIO at Temma Capital Management, to discuss their actively managed ETF focused on monopolies and oligopolies. (TICKER: TOLL).
About Yuri Khodjamirian and Tema ETFs
Yuri shares his background in finance and how he eventually became CIO at Temma. He talks about his interests outside of work, like exercising and reading widely across different topics.
Investment Strategy and Approach
They discuss the key sources of competitive advantage for monopolies, including non-replicable physical assets, network effects, high switching costs, regulation, and economies of scale. Yuri explains why good monopolies arise by providing mission critical products and immense customer value over time.
Yuri outlines Temma's investment process for selecting securities in the Toll portfolio. It starts with creating a pure thematic universe of monopolies, then applying fundamental equity analysis to identify the best companies. He mentions targeting 30-35 holdings in the portfolio.
Portfolio Construction and Implementation
They dive into Temma's rigorous risk management, using multiple layers like security selection, portfolio construction tiers, and continuous monitoring. Yuri explains their active but systematic rebalancing approach. On portfolio construction, Yuri details their conviction tier system for position sizing between high, medium and low conviction names. He explains how this takes advantage of managers' stock picking skills while controlling for risks.
Yuri discusses how Toll can fit into an investor's portfolio, arguing it essentially high grades on quality and durability versus a typical core allocation. He suggests investors look beyond just tech and growth stocks. For more information about TEMA ETF visit: temaetfs.com
Deeper Dive: Insights from the Full Conversation
Beyond the headline strategy, the full conversation between Brad and Yuri Khodjamirian covered several additional themes worth highlighting for advisors and investors.
On Process and Philosophy
So one of the first things I did when I joined before we launched the funds or hired any portfolio managers sit down and think about the investment process. And one of the key things that we wanted to focus on, especially with this idea of risk management is his position sizing. And if you look at the literature and I spent a lot of time reading and talk to a lot of market participants, you realize a couple of conclusions.
We think, what is the valuation case here? And in my world of monopolies often, some of these companies are a little bit richer value than the market. And you need to really build a really good solid valuation case. And then finally, what is our edge in this particular stock and investment? And that's a really difficult question of fund managers often don't ask themselves, right? And so we force everyone in the terms of the time of process to ask that.
Market Context and Positioning
And this is what we found. We've been testing in the market in lots of the models and it works really well. Fund managers is like the structure around it because it gives you this kind of risk management approach. And the reason for this is, from the mentally active management is really good in general. The good fund managers are good at picking stocks. They're not that good at sizing the positions. So you need some rules and guidelines on sizing to make sure you harness that stock picking alpha in the funds.
Today we have Yuri Kojermirion. He is the portfolio manager for the Tema Monopolys and oligopies ETF, Ticker TOL. A fascinating product, extremely well thought out. I loved my conversation with Yuri talks about how they go about picking the certain companies that sit inside their ETF. We talk about portfolio management techniques. We talk about risk management. And Yuri has a lot of great information, and I think that you will really enjoy this conversation with Mr.
We tried to aim for a conviction portfolio without taking excessive risks. And we can talk about risk management, which is a key tenant of of of tema. But we look, we we try to aim anywhere around 30, 35 holding. So I think where you can express clear conviction of the portfolio. I don't think we'll ever go about 50 or 60, but they're might be cases where it happens. We won't all go below 25 holding. So that 35, 30, 35 is a pretty sweet spot for the funds.
Notable Insights
"You know, Moody says the biggest database of private and public companies in the entire world."
"And that's why you see share price of these companies go up over time because they're constantly kind of beating expectations of the fade in the market."
Key Takeaways
- In this episode of Behind the Ticker, Brad invites Yuri Khodjamirian, CIO at Temma Capital Management, to discuss their actively managed ETF focused on monopolies and oligopolies.
- They discuss the key sources of competitive advantage for monopolies, including non-replicable physical assets, network effects, high switching costs, regulation, and economies of scale.
- The conversation explores important themes in income investing relevant to today's advisor landscape.
What This Means for Advisors
For financial advisors evaluating options for client portfolios, this conversation with Yuri Khodjamirian highlights important considerations around portfolio construction. 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 portfolio construction and quantitative investing 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 Yuri Khodjamirian, including additional nuances and details, listen on Spotify, Apple Podcasts, or watch on YouTube.