Guide to 351 Conversions to ETFs

What is a Section 351 Conversion?
‍A 351 conversion allows for the tax-deferred contribution of assets to an ETF. Investors can 'convert' assets from traditional wrappers like legacy stock positions, appreciated ETFs, and separately managed accounts (SMAs) into ETFs without triggering capital gains.

Key Benefits of 351 Conversions:

- Tax Efficiency: Contribute assets in-kind without realizing capital gains, preserving investment value.
‍
- Liquidity & Flexibility: ETFs provide improved liquidity and allow easier rebalancing without immediate tax consequences.
‍
- Diversification Compliance: The assets transferred must meet IRS diversification requirements, making them suitable for regulated investment companies like ETFs.
‍
‍

Requirements for 351 Conversion:

- Portfolio Composition: Assets must not aim for diversification post-conversion. All transferred assets should collectively form a well-diversified portfolio.
‍
- Diversification Rules:
  - No single asset can exceed 25% of the portfolio.
  - Assets exceeding 5% must collectively remain under 50% of the portfolio's value.
  - IRS Approval: Conversions must align with IRS guidelines to maintain non-taxable status.
‍
‍

When is a 351 Conversion Right for You?

SMAs, Stocks, and other ETFs with Locked-in Gains are ideal for portfolios with significant gains where tax-efficient restructuring is needed.
- Long-Term Growth: Suitable for investors aiming to streamline portfolio operations, reduce costs, and gain access to advanced instruments like ETFs.

- Tax-Conscious Investors: Avoiding capital gains now can enhance long-term growth potential.
‍
‍

Kurv’s HNW Bespoke 351 Program: 

1. Kurv will help source and consult financial and tax advisors to ensure the strategy aligns with financial goals and regulatory compliance.

2. Evaluate Portfolio Suitability: Confirm that your assets meet the IRS diversification and transfer criteria.

3. Kurv as Trusted ETF Sponsor: A provider who can handle the legal intricacies of the 351 conversion on your behalf.
‍

For more information, schedule a call with your Kurv representative here.

IRS Section 1.351 transfers are complex and have several requirements including diversification and record-keeping requirements. IRS and Investment Company Act rules apply and must be met prior to proceeding with a Section 1.351 conversion to an ETF, a registered investment company. In addition, IRS Section 1.351 transactions typically involve the issuance of a written opinion from a qualified tax professional. Please consult with your professional tax advisor to determine whether a Section 1.351 transfer is a viable option for you.

Press Release

Kurv Launches Six Inaugural Yield Premium ETFs Designed To Enhance Income Return For Single Stock Investments

Smart strategies focused on generating monthly cash flow through diversified sources including harvesting covered call option premiums, interest income, and dividends.

San Francisco, CA. (October 31, 2023): Kurv Investment Management LLC (“Kurv”), a single-stock ETF investment manager, has launched six yield premium ETFs that are focused on generating monthly income from multiple sources of cash flow, including writing call options and yields well above the dividend yield of the underlying stock. The strategies are intended to help investors generate attractive risk-adjusted returns in all market environments.

Kurv Yield Premium Strategy Tesla (TSLA) ETF (Ticker: TSLP)
Kurv Yield Premium Strategy Netflix (NFLX) ETF (Ticker: NFLP)
Kurv Yield Premium Strategy Apple (AAPL) ETF (Ticker: AAPY)
Kurv Yield Premium Strategy Google (GOOGL) ETF (Ticker: GOOP)
Kurv Yield Premium Strategy Amazon (AMZN) ETF (Ticker: AMZP)
Kurv Yield Premium Strategy Microsoft (MSFT) ETF (Ticker: MSFY)

Kurv is led by highly experienced and proven investment professionals with deep technical skills across different asset classes. The company leverages its deep industry knowledge to identify institutional hurdles to develop investment strategies and tools for investors of all sizes.

“Our goal at Kurv is to expand access to highly specialized investment strategies among all investors and their advisors by removing structural barriers and reducing costs, allowing them to focus on generating total return,” said Howard Chan, Kurv’s Founder and CEO. “In these strategies— unlike others managers in the space—Kurv looks to manage our products in a steady, disciplined manner with the goal of creating predictable, consistent cash flow, in balance with price return potential and without being a detriment to fund assets.” added Mr. Chan.

Benefits of Kurv’s Yield Premium Strategy ETF:

  • ‍Enhanced income strategies focused on generating monthly cash flow through diversified sources, including harvesting covered call option premiums, dividends, and interest income
  • Diversified sources of income: covered call premium harvesting, dividends, interest income
  • Lower beta to underlying stock exposure; can be used as a defensive substitute for single stock investments
  • Dynamic optimization: balance between income vs. capital appreciation 
  • Options-based strategies offer tax advantages

Bio of Kurv’s Founder and CEO: Mr. Chan is an experienced leader in the investment management industry with wide-ranging expertise across asset classes and instruments. He most recently worked with large asset managers to develop strategic business and investment strategies. Previously, he built and scaled a $5.5 billion UCITS ETF business and managed global fixed-income businesses at PIMCO as well as previous senior-level experience at Goldman Sachs Asset Management in asset allocation for institutional and private wealth clients. He has more than 20 years of investment and finance industry experience and holds both undergraduate and graduate degrees from the Massachusetts Institute of Technology.

About Kurv: Kurv is an investment manager that believes all investors should have access to the same portfolio tools, technology and best practices as the largest institutional investors. The firm was founded on the principle of creating simplified and cost-effective investment solutions to address issues and challenges that investors and their advisors face on the path to reaching their investment goals. Kurv combines decades of ETF experience with macroeconomic insights to inform its investment strategies.

Media contact:
Press@kurvinvest.com
213-705-8454

Kurv Invest ahead

You are entering kurvinvest.com

Please read this page before proceeding, as it explains certain restrictions imposed by law on the distribution of this information and the countries in which the funds are authorized for sale. By proceeding, you are confirming you understand that Kurv Investment Management LLC or its affiliates (collectively, “Kurv”), makes no representation that the content of the website is appropriate for use in all locations, or that the transactions, securities, products, instruments or services discussed at this website are available or appropriate for sale or use in all jurisdictions or countries, or by all investors or counterparties.

This section of the website is operated by Kurv, and is only directed at U.S. investors or those otherwise authorized to conduct investment business in the U.S. Persons resident in territories other than the United States should not access this website.

It is your responsibility to be aware of and to observe all applicable laws and regulations of any relevant jurisdiction. Certain of the funds and advisory products and services referenced on this website may be managed or offered/provided by affiliates of Kurv. Additionally, certain of the funds described in the following pages may be marketed in certain jurisdictions only. Any entity forwarding the material or information contained on this website, which is produced by Kurv in the United States, to other parties takes full responsibility for ensuring compliance with applicable securities laws in connection with its distribution.

This website only includes information on those funds that are registered for sale in the United States.

By accessing this website, you are confirming that you agree to the Terms and Conditions of this website and that you are resident in the United States or those otherwise authorized to conduct investment business in the U.S.

The contents of this website have been prepared for informational purposes only without regard to the investment objectives, financial situation, or means of any particular person or entity, and Kurv is not soliciting any action based upon them. No information included on this website is to be construed as investment advice or as a recommendation or a representation about the suitability or appropriateness of any fund; or an offer to buy or sell, or the solicitation of an offer to buy or sell, any security, financial product, or instrument; or to participate in any particular trading strategy. Kurv recommends that you seek independent financial and tax advice before making any investment decisions. Investment in any of the funds described in this website should only be made on the basis of the terms and conditions of the most recent applicable offering documents (including any relevant supplements).

All material has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. Some of the content on this website may contain certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. From time to time, ARK may also make additional features available to users on this website on such terms and conditions as may be set forth in a modification to this Agreement or otherwise on the ARK website.

The Kurv ETFs are distributed by Foreside Fund Services, LLC (“Foreside“), which is not affiliated with Kurv Investment Management LLC. Check the background of Foreside on FINRA’s BrokerCheck.

You should carefully consider the investment objective, risks, charges and expenses of a Fund before investing. A Fund’s prospectus and summary prospectus contain this and other important information about a Fund, which can be obtained by clicking the corresponding link or dialing the indicated phone number herein. Please read the appropriate prospectus carefully before investing.

GENERAL RISK FACTORS

You should be aware that past performance is not a reliable indicator of future performance. Please note that the price of units or shares and the income from them can fall as well as rise and you may not get back the amount originally invested. Income receivable may vary from the amount of income projected at the time of making the investment.

Exchange rate fluctuations may affect the value of an investment and any income derived from it.

If you exercise any right to redeem, you may not get back the amount initially invested if the unit or share price has fallen since you invested. Deductions for charges and expenses, particularly the initial charge (if any), are not made uniformly throughout the life of the investment, so if you redeem out of the investment during the early years, you may not get back the amount invested.

There can be no guarantee that the tax position or proposed tax position prevailing at the time of an investment will not change. Dividends and capital gains on securities issued in the relevant funds may be subject to withholding taxes imposed by the countries in which each particular fund invests.

The offering documents for the investment funds contain important information summarizing the relevant risk factors pertaining to the investment or relevant funds. Please note, however, that no summary of risk factors is exhaustive, and there may be other risks that could affect your investment. For your own benefit and protection you should read the most recent offering documents (including any relevant supplements) carefully before investing. If you do not understand any point please ask for further information.

The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation, or which would subject any of the funds described herein, ARK (including its affiliates) or any of their products or services to any registration, licensing or other authorization requirement within such jurisdiction or country. Nothing on this website shall be considered a solicitation to buy or sell a security, product or service (including advisory service) to any person.

HYPERLINKS

Kurv does not recommend or endorse and accepts no responsibility for the content of any website not operated by Kurv which you may visit by following a link from this website. You acknowledge and agree that neither Kurv nor any of its affiliates is responsible for the availability of such third-party websites or resources, does not endorse, approve, investigate or verify, and is not responsible or liable for any content, advertising, products, or other materials on or available from such websites or resources. You further agree that neither Kurv nor any of its affiliates shall be responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with use of or reliance on any such content, products or services available on such external websites or resources. These links are provided as a convenience and solely for informational purposes. Kurv is not making any recommendation to invest in, purchase, or sell any securities or other products or services offered on the linked websites, nor has Kurv sought to verify or confirm the information contained in the linked websites. Accordingly, Kurv disclaims any responsibility for the linked websites.

No other website, without the prior written permission of Kurv, is authorized to link to any part of this website.

COOKIES

Kurv uses cookies for collecting user information from certain pages of this website. A cookie is a file that is stored on the hard disk of a computer by the web browser on a computer. It contains information sent by the website that a user has visited. A cookie identifies users and can store information about them and their use of a website. Kurv uses cookies to keep track of user activity, which allows Kurv to identify which areas of the website are more interesting to the users so that improvements can be made to this website.Kurv expressly reserves the right to monitor any use of this website.

I confirm that I have read and accept the Terms and Conditions of using this website and that I am based in the United States or those otherwise authorized to conduct investment business in the United States.
CancelI agree