Kevin Kelly

About Kevin Kelly

Mr. Kelly is the Portfolio Manager of Fixed Income and a member of the Investment Committee. Before joining ACM, Mr. Kelly was a portfolio manager at Verition Fund Management in New York, NY where his duties included managing a long/short portfolio. Prior, Mr. Kelly was a Vice President at Goldman Sachs and a research analyst at Oak Hill Advisors. A native of South Florida, Mr. Kelly is a Summa Cum Laude graduate of The Wharton School at the University of Pennsylvania.

By Kevin Kelly, Portfolio Manager Given low Investment Grade yields, inflation concerns, and investors’ need (or desire) to stay invested, many fixed investors have found themselves chasing higher yield. Too often, most investors do not know when to stop chasing yield and either to accept a lower, safer yield or switch into other asset classes…

By Kevin Kelly, Portfolio ManagerIf analyzed carefully, I believe most fixed investors would not be happy with the current risk versus reward trade-offs they are consciously or unconsciously accepting. Many investors have resorted to one of the following three options in this low yield environment: 1) to essentially avoid interest rate and credit spread (risk…

Interest rates and risk premiums (credit spreads) are both very low. This has caused some investors to chase yield via more aggressive fixed income opportunities without appreciating the incremental risk associated with those decisions. To increase yield, investors must increase interest rate exposure (duration) and/or increase the amount of credit risk they are taking. The…

Many fixed income investors with traditional investment-grade bond portfolios were likely disappointed by their performance in 1Q’21. This is understandable, because for the 5 years through 2020, the average annual investment-grade bond returned over 6.5%, whereas in 1Q, that return was -4.6%. Investors may not appreciate that the average investment-grade bond has a maturity of…

Too many fixed income investors surprisingly do not pay close enough attention to their fixed income portfolios, mostly because they think their investments are safe and they think they have few other options for a safe portfolio. While fixed income yields are currently near record lows, investors can do far better with a mix of…

Many investors do not realize they are playing with fire in the fixed income portion of their portfolios by choosing to own common, high quality investment grade bonds. The typical, easy to construct investment grade portfolio of brand name bonds will leave investors with low yielding assets that have significant interest rate risk exposure. These…

If anything, the title is an understatement. Some investors own a large basket of high quality, investment grade bonds of well-known companies. The yields on such securities have declined dramatically and many are now 1% or even less. Many investors do not realize this, however, because they are looking at their coupons. The same logic…

Fixed Income yields have declined rapidly in 2020 and many investors are not fully aware how little their ‘traditional’ Fixed Income portfolio likely yields. Two main forces account for this common misunderstanding. First, fixed income yields have moved dramatically and quickly in 2020 because of record low Treasury interest rates and relatively tight credit spreads….

During the first half of 2020, fixed income yields moved substantially, behaving far more volatile than normal and deviating from historical levels of normal volatility (perhaps the understatement of the year!). Consequently, almost every fixed income portfolio has seen the widest swings in principle values since the Global Financial Crisis. All this volatility, combined with…

While there are lower-risk and higher-risk fixed income assets, investors could find no safe havens during the recent selloff. From the early 2020 highs to the March lows, investment grade corporates, high yield, and preferred indices declined by 15%, 24% and 38% respectively. This compares to the S&P500’s peak decline of 36% and highlights that…

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