Is your bond portfolio protected against higher interest rates?

For the month of June, 2018 the Strategic Corporate Income Strategy returned +.24% and we continue to remain in a defensive mode since February 9th. As a strategy we target less than 5% Standard Deviation while maintaining the ability to capture Alpha from both the Momentum and Low Volatility anomalies. Over the past 5 years […]

In the last several newsletters we have been reiterating the importance of capital preservation giving the current uncertainly in the global markets.  Since our February sell signal high-yield bond prices have remained sluggish and we are temporarily positioned defensively as the markets continue to drift sideways. We found this article below to be interesting enough […]

The importance of capital preservation in your fixed income portfolio: For many, capital preservation is just as important as capital appreciation. Remember, a 20% investment loss requires a 25% gain to get back to the initial investment value. Whereas a 40% loss requires 67% and 70% loss requires 233%. Simply put the best offense is […]

A word about the markets.. Economic Growth Is Strong – Through the end of the first quarter, gross domestic product (GDP) expanded by 2.9% year over year Inflation on the Horizon? Right now, the price increases are still tame at around 2%. Pressures from as illustrated in the last quarter, from rising commodity prices, oil […]

Active Bond Management Never Went Away   Dangers of Passive Investing The issue with a passively managed bond portfolio, particularly a treasury portfolio, is that a rise in interest rates can cause a portfolio to decrease in value. Let’s look at an example below. Given the proposed Fed rate hikes projected for 2018 with possible […]

Why A Tactical Approach to Fixed Income Investing Out-performs Treasury and corporate bonds have received substantial press recently. Currently, large short positions exist in the treasury bond market. Some indicators are calling for a possible short squeeze which may catch many investors off guard. (See chart below) There is a record net short position in […]

As of this writing the Dow Jones Industrial Average has retraced over 10% in just 7 trading sessions. It seems like we’ve seen this movie before!! How quickly we forget how capital preservation is just as important as capital appreciation. It is with that information we have felt compelled to repeat some points from an update […]

The High Yield and Corporate fixed income markets performed pretty much as expected from our point of view following a double digit percentage return in 2016. Kensington’s three strategies performed in line with expectations net of fees as follows:  The effective yield of the asset class was approximately 6% at the start of 2017 and […]

There is an old adage, ‘bulls make money, bears make money, pigs get slaughtered’. How does one know when to take profits or reallocate defensively after a significant market move? Investors forget that the bigger the investment loss, the greater the gain required to recoup that loss and/or breakeven. There are certain metrics which some […]

Strategic Corporate Income Strategy      +0.24% (MTD)    +4.52% (YTD) Tactical High Yield Strategy                     +0.26% (MTD)     +5.62% (YTD) Tactical Equity Income                              +0.95% (MTD)     +8.06% (YTD) Kensington Wealth Advisors Monthly Commentary The US high yield remains ‘rich’, as judged by the current tight spreads, historically, this can be maintained for several years. The media […]

All Kensington Wealth Management programs posted positive performances for the month of September.  With a strategy deriving much of our gains from long exposure to the corporate market with coverage in treasury type instruments and cash in defensive markets, we thought a brief interest rate update is warranted. Interest Rate Update Rates continue to flip-flop […]

Kensington Wealth Advisors August Re-Cap Recap: The stock market has been making record highs and government bond yields have moved lower from their peaks earlier this year. Typically, bond rates climb when growth is improving and inflation begins to accelerate.  The Fed this year has raised short-term interest rates which usually follows an increase in […]

Kensington Wealth Advisors has a unique edge; For over 25 years, we have exploited the Low Volatility Anomaly and the Momentum Anomaly, which has been a successful repeatable process for our clients.  The month of July resulted in solid gains for our strategy. We have expanded the information on the Low Volatility Anomaly for your […]

Understanding what the underlying positions are in your bond portfolio and how those positions are being managed is even more important than ever now that bond yields are beginning to bounce off historic lows. Let’s first take a look at passive investing. Bond mutual funds have been experiencing net outflows in the traditional fixed income […]

The market for both high-yield bonds and equities continues to surprise most observers by holding up in the face of a constant onslaught of negative news from the mainstream media. Fortunately, our disciplined decision-making process has enabled us to filter out these influences. For the time, our models continue to be constructive and have us […]

Over the last 30 years corporate high-yield bonds have nearly matched equity performance with a fraction of the volatility.   Since 1983, stocks have yielded an annualized return of approximately 10.9 percent (Display 1). Corporate high-yields have nearly equaled that performance, with a 9.5 percent return over a period spanning two full market cycles and […]

For the month ending March 2017 the Kensington Wealth Advisors Strategic Corporate Income Strategy returned a gross return of +.03% and a net return of -0.14% which brings the YTD to +1.92%. In last month’s commentary, we suggested that the equity market was up against a resistance point that could cause some hesitation or even […]

Kensington wanted to share this independently written article with you as we believe this is an area which has been overlooked for many years. An area where one can target lower volatility and consistent returns if utilizing the correct discipline. Global markets have been historically tumultuous over the last several years as the Great Recession […]

Today’s investor is faced with an overwhelming dilemma. Fixed income has been the predominant asset class that has driven investor returns throughout this 8-year old bull market, notwithstanding the extraordinary climb by the S&P 500 Index to 3½ times its March 2009 low. Market sentiment toward equities has been very skeptical for the most part, […]

‘There is no free lunch’, this is something which I have learned during my 30 plus years of managing alternative portfolios. Over the years, our team has lived through many differing market environments and that has taught us one important lesson, to always expect the unexpected! This is why we have employed a unique strategy […]