Manager Spotlight Series | Kensington Asset Management
by Craig Love, on July 07, 2021
In this month's Manager Spotlight, we’re featuring Kensington Asset Management and their Managed Income Strategy, which, "uses a proprietary trend following model to identify and act on prevailing market sentiment."
Fulcrum Focal Points
- 29+ year track record with only two down years (2015 -1.56% and 2018 -2.69%)
- Equity-like returns with Bond-like volatility
- Risk-On/Risk-Off portfolio management style
- 5 Star Morningstar® Rating
- Same portfolio manager since inception
The firm specializes in data-driven, quantitative decision models that apply to the equity and fixed income markets. The underlying philosophy of relying on a quantitatively-driven investment decision process was shaped by the formative trading experience of Kensington’s founder, Bruce P. DeLaurentis
Trading methods and tools were primitive at the start of Mr. DeLaurentis’ trading career, but as he gained experience and was able to benefit from more sophisticated technology, his methods took on a more refined and quantitative approach. He built his first quantitative model using a programmable calculator. He advanced to more sophisticated technology with his first computer in 1981.
Although he had become a registered representative with a brokerage firm in 1977, it wasn’t until 1984 that he was sufficiently satisfied with his model-driven approach to launch Kensington. Mr. DeLaurentis achieved an enviable track record employing a quantitative methodology.
Kensington Managed Income Strategy
- Strives to provide investors with the potential to generate stable, above average total returns, with low drawdown.
- The model provides daily signals to guide the Strategy’s allocation. Managed Income rotates between two investment modes:
- Risk-On: When markets are generally trending upward, Managed Income allocates to higher yielding fixed income securities across the high-yield and multisector bond categories.
- Risk-Off: When the overall trend is one of decline or high volatility, Managed Income shifts into shorter duration instruments, including U.S. Treasuries or cash equivalents.
- Strategy Inception: 12/31/1991
- Morningstar® Classification: Nontraditional Bond
- Morningstar® Rating: 5 Stars (as of 12/31/2020)