Strategy Review – April 2026
(Market Data as of 04/30/2026)
Monthly Strategy Commentary
By Kensington Asset Management Team
RISK ASSETS SURGED IN APRIL AS EQUITIES RALLIED SHARPLY
April’s market backdrop was defined by a powerful equity rebound following the volatility experienced in March. Risk-On leadership returned with a vengeance, and the rally was notably broad-based: large-cap growth reasserted leadership while small caps, international developed markets, and emerging markets all participated meaningfully. The S&P 500 advanced +10.42% on the month, the Nasdaq 100 rose +15.64%, and the Russell 2000 gained +12.16%, eclipsing recent benchmarks of broader-market participation.
Outside the US, international equities also posted strong gains. The MSCI Emerging Markets Index returned +13.26%, supported by improving growth expectations and capital flows seeking diversification away from concentrated US mega-cap exposure. Developed international equities advanced +5.08% (MSCI EAFE Index) and +5.60% (Euro Stoxx 50), while the US dollar weakened on the month (Bloomberg Dollar Spot -1.93%).
In fixed income, results were mixed as the rally in risk assets pulled investor focus away from duration. The Bloomberg US Aggregate Bond Index returned +0.11%, with US Treasuries -0.07% as longer-duration bonds came under pressure (S&P US 30Y -0.89%). Credit, in contrast, performed well: Bloomberg US Corporate High Yield gained +1.69% and US Investment Grade Corporates returned +0.45%, reflecting a resurgence in credit risk appetite as the proposed ceasefire between the US and Iran lifted sentiment.
Real assets diverged from recent months. Broad commodities advanced +3.12% (S&P GSCI Index Spot), while gold paused after a strong run, falling -0.75% (S&P GSCI Gold Index TR) as elevated geopolitical risk failed to translate into safe-haven flows.
MANAGED INCOME STRATEGY
Author: Kensington Asset Management PM Team
| Apr 2026 | YTD | 1 Year | 3 Years | 5 Years | 10 Years | Since Inception | |
| Kensington Managed Income Strategy (*Gross) | 1.90% | 1.66% | 9.44% | 6.19% | 2.85% | 4.67% | 8.23% |
| Kensington Managed Income Strategy (**Net 3%) | 1.65% | 0.66% | 6.21% | 3.06% | -0.19% | 1.58% | 5.04% |
| Bloomberg US Agg Bond TR USD | 0.11% | 0.07% | 4.06% | 3.46% | 0.18% | 1.67% | 2.94% |
Inception date: 12/31/2007 (Returns exceeding one year are annualized.)
Managed Income Strategy returned 1.90% gross (1.65% net) for the month of April, propelling the Strategy to its highest cumulative value since inception. Following the volatility experienced in March, fixed income markets stabilized in April, with most asset classes posting positive returns. High yield corporate bonds turned sharply higher, driving the Strategy’s strong monthly result.
During April, Managed Income remained in a fully Risk-On stance, with a portfolio comprised predominantly of US high yield corporates and satellite positioning in multisector bonds. Geopolitical tensions remained an area of concern for investors, particularly in longer-duration bonds, as the ongoing US/Iran conflict reignited concerns of a “higher-for-longer” interest rate regime given continued instability in oil prices.
Looking ahead, we anticipate bond valuations to remain relatively expensive compared to historical averages. As a result, we believe the primary return driver for the Strategy will remain the yield generated by the underlying holdings in the short term.
CREDIT OPPORTUNITIES STRATEGY
Author: Kensington Asset Management PM Team
| Apr 2026 | YTD | 1 Year | 3 Years | Since Inception | |
| Kensington Credit Opportunities Strategy (*Gross) | 0.21% | -0.09% | 4.25% | 5.25% | 5.36% |
| Kensington Credit Opportunities Strategy (**Net 3%) | -0.04% | -1.07% | 1.17% | 2.14% | 2.24% |
| Bloomberg US Agg Bond TR USD | 0.11% | 0.07% | 4.06% | 3.46% | 3.27% |
Inception date: 08/31/2022 (Returns exceeding one year are annualized.)
Credit Opportunities Strategy returned 0.21% gross (-0.04% net) for the month of April, a slight positive return broadly in line with its benchmark. Economic data released during the month pointed to a still-healthy labor market and sticky inflation, reinforcing beliefs that the Federal Reserve will remain cautious in signaling rate cuts.
The Strategy maintained a conservative posture during April, with US Treasuries representing approximately two-thirds of the portfolio and the remainder held in cash equivalents. Despite the sharp resurgence in US high yield corporates following the proposed US/Iran ceasefire, most other areas of the bond market were only slightly positive, while longer-duration bonds posted modestly negative returns.
Despite the rebound in high yield, the Credit Opportunities model has not suggested adding US high yield back to the portfolio at this time. Should trends move more favorably, the Strategy is prepared to add high yield exposure as relative value and momentum signals support.
DYNAMIC ALLOCATION STRATEGY
Author: Kensington Asset Management PM Team
| Apr 2026 | YTD | 1 Year | 3 Years | 5 Years | 10 Years | Since Inception | |
| Kensington Dynamic Allocation Strategy (*Gross) | 11.27% | 10.24% | 40.05% | 20.39% | 13.58% | 18.97% | 17.42% |
| Kensington Dynamic Allocation Strategy (**Net 3%) | 10.99% | 9.16% | 35.92% | 16.83% | 10.22% | 15.45% | 13.95% |
| S&P 500 TR USD | 10.49% | 5.70% | 31.05% | 21.69% | 13.14% | 15.26% | 13.67% |
Inception date: 12/31/2014 (Returns exceeding one year are annualized.)
Dynamic Allocation Strategy returned 11.27% gross (10.99% net) for the month of April, outpacing its benchmark in a sharp equity rebound. After heightened volatility in March, stocks surged as market participants grew more encouraged following the announcement of a proposed ceasefire between the US and Iran. The Nasdaq Composite returned over 15% on the month, eclipsing its prior all-time highs from October 2025, as mega-cap and technology stocks returned to the forefront of leadership.
After spending March in a Risk-Off posture, the Dynamic Allocation model produced a Risk-On signal in early April, allowing the Strategy to re-enter the market. The portfolio is currently tilted approximately two-thirds toward growth exposure, with the remaining one-third in core equity exposure.
Looking ahead, equity markets remain highly dependent on the path of inflation, interest rates, and corporate earnings. While the economic backdrop continues to support growth, elevated valuations and restrictive policy create a narrower margin for error. Big-tech earnings released toward the end of the month, while mixed, did not slow the rally in progress.
ACTIVE ADVANTAGE STRATEGY
Author: Kensington Asset Management PM Team
| Apr 2026 | YTD | 1 Year | 3 Years | Since Inception | |
| Kensington Active Advantage Strategy (*Gross) | 7.70% | 6.66% | 22.65% | 12.39% | 6.82% |
| Kensington Active Advantage Strategy (**Net 3%) | 7.44% | 5.62% | 19.03% | 9.07% | 3.67% |
| S&P 500 TR/Bloomberg US Agg Bond TR 50-50 | 5.30% | 2.99% | 17.06% | 12.41% | 5.87% |
Inception date: 12/31/2021 (Returns exceeding one year are annualized.)
Active Advantage Strategy returned 7.70% gross (7.44% net) for the month of April, well above its benchmark, a 50/50 blend of the S&P 500 and Bloomberg US Aggregate Bond Index. The Strategy remained fully invested during the month.
Upon receiving confirmation model signals as equity markets began to trend higher, Active Advantage positioned more aggressively, moving to a 60/40 equity-bond split. To execute this adjustment, investment grade bonds were trimmed and the allocation to growth equities was increased.
As risk assets rallied during the month, the Strategy outperformed its benchmark. On the fixed income side of the portfolio, international holdings and high yield corporates contributed the bulk of the return; across equities, the additional growth tilt helped boost performance. The Active Advantage model remains in a fully Risk-On stance, which we anticipate carrying forward in the short term.
DEFENDER STRATEGY
Author: Elio Chiarelli, PhD, AIF – Lead Portfolio Manager, Liquid Strategies
| Apr 2026 | YTD | 1 Year | Since Inception | |
| Kensington Defender Strategy (*Gross) | 4.38% | 10.41% | 25.91% | 12.19% |
| Kensington Defender Strategy (**Net 3%) | 4.13% | 9.32% | 22.19% | 8.88% |
| Morningstar Global 60/40 NR USD | 6.54% | 4.38% | 19.12% | 13.54% |
Inception date: 05/31/2023 (Returns exceeding one year are annualized.)
April 2026 was a powerful reminder of how quickly market narratives can shift, as risk assets rebounded sharply despite a backdrop of geopolitical tension and macroeconomic uncertainty. Equities staged a notable recovery, supported by strong corporate earnings and easing concerns around escalation in the Iran conflict. Oil prices remained elevated, ending the month near $114 per barrel, reinforcing inflationary pressures and complicating the Federal Reserve’s path forward. Resilient growth alongside persistent inflation continued to challenge policymakers, with rising bond yields reflecting diminished expectations for near-term rate cuts.
Despite geopolitical stress, traditional safe havens such as gold were relatively muted, underscoring the importance of active positioning over static assumptions. Conflicting economic data and uncertainty around Fed policy contributed to elevated volatility across both equity and fixed income markets.
Within this context, the Defender Strategy maintained a slightly reduced risk posture throughout April, consistent with our disciplined, momentum-driven process. The portfolio was allocated across gold, commodities, US small caps, emerging markets, Europe, and Japan, a measured approach to participating in the market’s recovery, and benefited from broad-based strength in global equities, particularly in emerging markets and US small caps, both among the top-performing asset classes during the month.
Emerging markets were a meaningful contributor, delivering one of the strongest returns globally as capital flows sought diversification outside concentrated US mega-cap exposure. US small caps also contributed positively, as investors rotated into areas that had lagged earlier in the year but offered attractive valuations and cyclical leverage. Commodities provided an additional tailwind, supported by elevated energy prices and persistent inflation dynamics, reinforcing the value of real asset exposure when traditional bonds struggled to provide diversification.
International developed markets, including Europe and Japan, also contributed, though to a lesser degree relative to emerging markets. These allocations continued to provide important diversification benefits, particularly given historically elevated US equity concentration. Gold acted more as a stabilizer than a primary return driver, reflecting its evolving role in a regime where inflation, real rates, and geopolitical risk are interacting in less predictable ways.
On the detractor side, the Strategy’s reduced risk posture created a modest headwind to relative participation given the magnitude of the rebound in large-cap US growth. Gold’s muted performance limited its safe-haven contribution, and European exposure, while positive in absolute terms, lagged stronger-performing regions amid ongoing economic and geopolitical sensitivities.
These dynamics highlight the core philosophy of the Defender Strategy: not to capture every incremental upside, but to participate meaningfully while maintaining a disciplined focus on reducing potential drawdowns. Over full market cycles, this approach is designed to compound capital more effectively by avoiding the asymmetric impact of large losses. As we move into May, the model is signaling a shift toward increased risk exposure, reflecting strengthening momentum across growth-oriented segments. We anticipate a rotation out of Europe and reallocate capital into the Nasdaq 100, aligning the portfolio more directly with areas demonstrating both strong earnings growth and improving technical leadership, a continuation of our disciplined, rules-based process.
HEDGED PREMIUM INCOME STRATEGY
Author: Shawn Gibson – CIO, Lead Portfolio Manager, Liquid Strategies
| Apr 2026 | YTD | 1 Year | Since Inception | |
| Hedged Premium Income Strategy (*Gross) | 6.65% | 3.22% | 19.20% | 13.10% |
| Hedged Premium Income Strategy (**Net 3%) | 6.39% | 2.21% | 15.68% | 9.76% |
| S&P 500 TR USD | 10.49% | 5.70% | 31.05% | 18.89% |
Inception date: 10/31/2023 (Returns exceeding one year are annualized.)
After bottoming in late March, the S&P 500 Index soared 10.42% in the month of April. Examples like this are exactly why we chose to sell call spreads rather than just outright sell covered calls. With a call spread, the portfolio maintains exposure to upside moves beyond a defined level. Specifically, our long call kicks in once the market is up more than 3% from when we initiated the monthly spread. For this cycle, the S&P 500 Index finished 9.52% above the long call strike that expired on April 17th. This helped Hedged Premium Income Strategy to generate a positive return of 6.65% gross (6.39% net) for the month of April.
At the April 17th expiration, a couple of new positions entered the portfolio: 1) we sold a new income-producing call spread, collecting 1.40% in new monthly premium; and 2) we moved our downside buffer that expires June 18th from being 13.26% below the market to 6.62% below the market. This extra 6.5%+ of additional downside buffer cost about 0.50%, which we felt was an attractive value given the high level of recent volatility. By the month’s end, the Index continued moving higher and finished about 1.16% into our income spread.
Disclaimers:
Investing involves risk, including loss of principal. Past performance does not guarantee future results. There is no guarantee any investment strategy and/or diversification will generate a profit or prevent a loss. Targeted distributions are not guaranteed.
*Gross returns do not include the deduction of transaction costs and are shown as supplemental information.
**Net performance values and statistics reflect the deduction of model fees of 3% as the highest possible fee that would be charged to an investor and may not reflect actual deducted fees.
This is for informational purposes only and is not a recommendation nor solicitation to buy, sell or invest in any investment product or strategy. Our materials 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 should be viewed as or used as a substitute for individualized investment advice. An investor should consider the investment objectives, risks, charges, and expenses of the investment and the strategy carefully before investing.
Any indices and other financial benchmarks shown are provided for illustrative purposes only, are unmanaged, reflect reinvestment of income and dividends and do not reflect the impact of advisory fees. Investors cannot invest directly in an index. Comparisons to indexes have limitations because indexes have volatility and other material characteristics that may differ from a particular strategy such as the types of securities being substantially different.
Kensington Asset Management, LLC (“KAM”) relies on third party sources for some of its information that we believe is reliable. However, we make no representation, warranty, endorse or affirm as to its accuracy or completeness. The information provided is current as of the date of publication and may be subject to change. We are not responsible for updating this information to reflect any subsequent developments or events.
Certain information contained herein constitutes “forward-looking statements,” which can be identified using forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” or “believe,” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events, results, or actual performance may differ materially from those reflected or contemplated in such forward looking statements. Nothing contained herein may be relied upon as a guarantee, promise, assurance, or a representation as to the future.
Advisory services offered through Kensington Asset Management, LLC, Barton Oaks Plaza, Bldg II, 901 S Mopac Expy – Ste 225, Austin, TX 78746. Liquid Strategies, LLC, serves as a Sub Advisor for the Kensington Defender Strategy and investment adviser to Hedged Premium Income Strategy. Liquid Strategies, LLC is not affiliated with KAM. Xtollo Investment Partners, LLC (“XIP”) promotes KAM strategies and funds and receives compensation for these activities, which creates a conflict of interest. XIP is not a registered investment adviser or broker-dealer.
Important Disclosures | Glossary
Kensington Asset Management claims compliance with the Global Investment Performance Standards (GIPS®). For performance, GIPS compliance disclosures and important risks about the investment strategies, visit:
Managed Income Strategy | Credit Opportunities Strategy | Dynamic Allocation Strategy | Active Advantage Strategy | Defender Strategy
Hedged Premium Income Strategy
The Strategy invests in options that derive their performance from the performance of the S&P 500 Index. Selling (writing) and buying options are speculative activities and entail greater than ordinary investment risks. The Strategy’s use of put options can lead to losses because of adverse movements in the price or value of the underlying asset, which may be magnified by certain features of the options. When selling a put option, the Strategy will receive a premium; however, this premium may not be enough to offset a loss incurred by the Strategy if the price of the underlying asset is below the strike price by an amount equal to or greater than the premium. Purchased put options may expire worthless and the Strategy would lose the premium it paid for the option. The Strategy may lose significantly more than the premiums it receives in highly volatile market conditions.
The Strategy will invest in short term put options which are financial derivatives that give buyers the right, but not the obligation, to sell (put) an underlying asset at an agreed-upon price and date. The Strategy’s use of options may reduce the Strategy’s ability to profit from increases in the value of the underlying asset. The Strategy could experience a loss or increased volatility if its derivatives do not perform as anticipated or are not correlated with the performance of their underlying asset or if the Strategy is unable to purchase or liquidate a position.
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