RANCHO SANTA FE — Two North County financial advisors marked a “magical” milestone on Wall Street last month when they were invited to ring the closing bell at the New York Stock Exchange.
Bernard Surovsky of Carmel Valley and Larry Kriesmer of Rancho Santa Fe, co-founders of Kings Road Financial, rang the NYSE closing bell on May 28 in celebration of their newly launched exchange-traded fund, Measured Risk Portfolios, or MRP SynthEquity ETF (NYSE: SNTH).
“It was a surreal, humbling experience that I only dreamed of, but never really imagined would ever happen,” Surovsky said.
The exchange-traded fund, or ETF, is a type of investment fund that holds a mix of assets, such as stocks, bonds or commodities, and trades on a stock exchange like an individual stock.
The local duo’s EFT is designed to offer “known possible losses with no ceiling for gains” by combining U.S. Treasury holdings with options tied to the S&P 500. According to the partners, the fund seeks to limit downside risk while preserving equity market upside.
“We have built a portfolio that is based upon having the majority of the assets in what is considered a very safe investment, namely short maturity government bonds and the remainder goes into options (derivatives) on the S&P 500 that helps us capture the upside,” Surovsky told The Coast News. “The benefit of using us is that we actively manage the derivatives exposure.”
Most funds like this limit how much you can gain to protect against losses. Measured Risk Portfolios takes a different approach — it sets a limit on how much you can lose, but not on how much you can earn. This allows investors to benefit from market gains without being limited by a cap on returns.
As of June, Measured Risk Portfolios has traded more than 1.25 million shares and reached profitability less than three months after its listing on NYSE Arca, a Chicago-based subsidiary of the NYSE Group.
“We’ve been very pleasantly surprised by the response of early adopters,” Surovsky said. “Once people understand the benefits of what a limited loss and an unlimited gain looks like, they embrace what we do.”
For the longtime financial business partners, the NYSE invitation came as a surprise, with both describing it as evoking a sense of “elation and exhilaration peppered with disbelief.”
“Standing on the balcony with Larry (Kreismer) and Alexander (Flecker) and looking over the NYSE trading floor and seeing our company logo on all the screens while looking at the multitude of people who were there to share in this most magical moment of all of our lives is a memory that will bring me immense joy forevermore,” Surovsky said. “I still can’t believe it actually happened — it was magical.”
For Surovsky and Kriesmer, both longtime San Diego residents, the moment was also a point of local pride.
“It’s spectacular,” Surovsky said. “To be one of the few representatives of what San Diego has to offer in financial innovation, I feel incredibly blessed.”
