Kensington Asset Management

Dynamic Growth Strategy

Tactical Exposure to Equity Markets

Objective

The Dynamic Growth Strategy (the “Strategy”) seeks capital gains.

Why Invest

  • Adaptive Equity Participation: The Strategy dynamically adjusts its exposure between equities and cash or U.S. Treasuries. This approach seeks to allow investors to capture market gains while reducing drawdown during periods of heightened volatility, providing an alternative to traditional buy-and-hold strategies.
  • Drawdown Mitigation: In times of increased market volatility, the Strategy reduces equity exposure. This defensive measure is designed to help limit losses and enhance stability during market downturns.
  • Long-Term Growth Potential: By focusing on growth equities when market conditions are favorable and maintaining the flexibility to shift to cash equivalents as needed, the Strategy aims to balance risk and return, supporting long-term capital appreciation.

Overview

The Dynamic Growth Strategy is a tactical allocation strategy that alternates between equities and cash.

  • Rising Markets

    Risk-On
    Equity Index ETFs

  • Declining/Volatile Markets

    Risk-Off
    U.S. Treasuries and Cash Equivalents

Risk Characteristics

As of -

Total Returns (%)

As of -

Inception date: December 31, 2014.
Returns greater than 1 year are annualized.

Growth of $100,000 (Composite)

As of -

Growth Composite

As of -

Kensington Asset Management claims compliance with the Global Investment Performance Standards (GIPS®). Kensington Asset Management has been independently verified for the period of January 1, 2015 through December 31, 2023.

The lead manager primarily responsible for achieving prior performance began managing this strategy on 12/31/2014 and has continued this strategy at several firms in the same capacity prior to being managed at Kensington Asset Management, LLC effective 10/23/20. The accounts managed and the investment process employed for this strategy at the prior firms remain substantially similar. Therefore, Kensington Asset Management, LLC uses 12/31/14 as the inception date for the Dynamic Growth Strategy. Kensington Dynamic Growth was formerly referred to as Nasdaq Unconstrained Growth Tactical Allocation Model from inception through June 2020, and the Enhanced Equity Strategy from June 2020 to July 2020.

The Composite was created and incepted in January 2015 and only includes accounts with a minimum of $100k. GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein. Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. The U.S. Dollar is the currency used to express performance. An investment in securities involves risk, including loss of principal. Returns are presented net of fees and include the reinvestment of all income.  Performance represents past performance.

The types of securities held by a comparison benchmark may be substantially different from the investment strategy. An investor should consider the investment objectives, risks, charges, and expenses of the investment and the strategy carefully before investing. The Dynamic Growth Strategy uses the S&P 500 TR Index as its benchmark, as this index is, in Kensington’s view, a representative index for the broader equity market. The S&P 500 TR Index is a capitalization weighted index of 500 stocks representing all major domestic industry groups. The S&P 500 TR Index assumes the reinvestment of dividends and capital gains. The types of securities held by a comparison benchmark may be substantially different from the investment strategy. It is not possible to invest in an index, and index returns do not include management fees.

Risk Definitions

Key principal investment risks include, but are not limited to:

  • Management Risk:The Adviser’s reliance on its proprietary trend-following model and asset judgments may be incorrect, potentially failing to achieve desired results.
  • Equity Securities Risk: Equity securities can experience sudden, unpredictable drops or prolonged declines in value. This may result from general market factors or specific issues affecting industries, sectors, geographic markets, or individual companies.
  • Market Risk: Investment market risks, influenced by economic growth, market conditions, interest rates, and political events, affect asset values. Unexpected events like war, terrorism, financial disruptions, natural disasters, pandemics, and recessions can significantly impact investments and market liquidity, causing investor fear and economic instability.
  • Underlying Funds Risk: Investments in underlying funds can lead to duplicated fees and expenses. Each fund has specific risks based on its strategy, and its manager may not always succeed. ETF shares might trade at prices different from their net asset value and incur additional trading costs, potentially affecting performance. Market demand can impact the ability to liquidate holdings optimally.
  • Derivatives Risk: Derivatives involve leverage, leading to potential gains or losses greater than the initial investment, with value fluctuations that may not perfectly correlate with the market. Futures contracts carry risks like imperfect correlation, lack of liquidity, and unanticipated market movements. Credit default swaps are difficult to value and highly susceptible to liquidity and credit risk. Options are speculative and can result in the loss of the premium paid if the underlying asset’s price does not move favorably.
  • Non-Diversification Risk: Non-diversified investments may allocate more than 5% of total assets to one or more issuers, including non-diversified underlying funds. This can make performance more sensitive to single economic, business, political, or regulatory events compared to diversified investments.
  • Turnover Risk: Higher portfolio turnover can lead to increased transactional and brokerage costs. Turnover rates may significantly exceed 100% annually.
  • US Government Securities Risk: Investments in obligations issued by US government agencies or instrumentalities may not be backed by the US government. If the issuer defaults and the government chooses not to provide financial support, recovery of the investment may not be possible.
  • Models and Data Risk: Investment exposure relies heavily on proprietary quantitative models and third-party data. Incorrect or incomplete models and data can lead to suboptimal investment decisions. Predictive models carry inherent risks, such as incorrect forecasts and unexpected results in low-probability scenarios, potentially causing losses.

For a complete list of potential investment risks associated with this strategy, please refer to its Investor Presentation.

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877.891.1222
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Investing involves risk. Principal loss is possible. Past performance is no guarantee of future results. There are no guarantee that an investment strategy or diversification will generate a profit or prevent a loss.

This website is for informational purposes only and should not be construed as a solicitation to buy or sell, or to invest in any investment product or strategy. Investing in securities markets involves risk and the degree of risk varies by the type of investment or strategy. For a complete list of the risks associated with each of our Strategies, please review the Strategy Brochure and Factsheet. Materials such as blog posts, newsletters or commentary may contain information deemed to be correct and appropriate at a given time but may not reflect our current views or opinions due to changing market conditions. No information provided on this website should be viewed as, or used as a substitute for individualized investment advice.

Advisory services offered through Kensington Asset Management, LLC.

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