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).
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.
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.
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
