Capital Appreciation & Preservation of Capital

View answers to common questions below, or request our complete FAQ document (22pg PDF)

Tactical investment strategies are trading strategies that seek to capitalize on identified investment opportunities. Tactical strategies utilize a systematic mathematical process to identify market turning points. While all tactical investment strategies look to identify and profit from price momentum, strategies measure momentum in a number of different ways. The strategy consists of multiple market modules which are made up of various market inputs which weigh in for a general decision for a market move.

In a typical bond market, high interest rates cause treasury prices to decline. Conversely, falling rates cause interest rate portfolios to increase. Kensington strategies are tactical and systematically managed. Not all bonds behave similarly. High yield bond funds tend to trend with equity markets and many times inversely to the treasury markets. Kensington looks to capture returns with high yield when a risk trade in place. Once a sell signal is issued Kensington will move to cash or possibly to treasuries should a buy signal be generated then.

Turnover may be up to several times per year. Low turnover is important for the strategy since it minimizes transaction and slippage costs. The model can be best categorized as trend following.

Non-correlation is important in a portfolio because it creates a diversified portfolio that is more likely to withstand volatile market conditions. Non-correlating strategies have the ability to  potentially generate returns in various market environments. It is Important to remember that past performance may not be indicative of future results.

Accounts are tactically managed using a proprietary set of algorithms, developed over 40 years, which issue buy and sell signals in the fixed income market. Using a tactical systematic approach eliminates manager bias and emotions.

Accounts are managed as separately managed accounts held in client name. Kensington has trading authorization only, adding an extra layer of protection to your capital. Kensington usually allows the client to choose his/her custodian. Accounts can also be managed at Charles Schwab, Pershing, TD Ameritrade and for mutual fund trading directly at a fund company.  Additionally, if you are an Advent user, accounts may also be managed through HedgeCoVest’s  SMArtXchange platform utilizing Charles Schwab, TD Ameritrade or Interactive Brokers.

Yes. Performance since 1994 has been audited by Rothstein Kass. Real time performance has been documented since the beginning of 1992 and the model has been back-tested on a hypothetical basis to 1985. During some of the worst declines in bond market history, the model return has been positive for every year since inception except 2015, with no significant drawdown of capital. The returns have also been verified by an independent third party verification firm from 1992 – 7/2016.