Sector Rotation with a Rules-Based Approach
BCM’s Sector Rotation portfolios are growth strategies that use a quantitatively-researched approach. Our rules-based process evaluates trends in the sectors of each respective asset class on a weekly basis. Allocations are determined primarily by momentum, with secondary inputs helping to determine how quickly we react to changes in momentum. Key features include:
- Sectors are purchased in equal weights.
- No equity ETF purchase will represent more than 25% of the portfolio.
- The portfolio raises cash (or substitute) when three or fewer sectors are owned, and can go to 100% cash if momentum in all sectors is determined to be negative.
- The rules applied to the strategy allow us to determine the reaction time of the purchase or sale decision based on additional attributes of the sectors’ momentum, helping to avoid whipsaw.
Each sector rotation portfolio is seeking to provide growth and large loss avoidance.
Conquering a mountain demands intense focus on safety. Proper equipment and training can provide protection against a catastrophic fall.
Respecting ever-changing terrain and conditions can give you a distinct advantage. The same applies to the different asset classes of global markets.
This principle is built into the design of every BCM strategy. We believe that reducing volatility and avoiding failing asset classes are two keys to long-term investment success.
Pure Sector Rotation: Applying our Rules-Based Approach Across Asset Classes
BCM’s pure sector rotation strategies apply our flagship process to U.S. Large Cap and Global equity sectors providing defensively oriented, core growth portfolios.
Where do you need exposure?
BCM U.S. Sector Rotation
Invests in 10 sectors of the S&P 500® Index (which includes Telecom in the Technology sector), primarily through the SSgA SPDR U.S. Sector ETFs.
The strategy is also available as a Collective Investment Fund for Qualified Plans.
BCM Global Sector Rotation
Invests in 11 sectors of the S&P Cap 1200 Index, primarily through the iShares® Global Sector ETFs.
The BCM U.S. Sector Rotation strategy is also available to investors through a ’40 Act mutual fund that has received a 5-star rating from Morningstar. Learn more here.*
Beaumont strategies are available to individual separate accounts; via SMA/wrap sponsors; through Collective Investment Funds (in retirement plans only); and in ’40 Act mutual funds.
Growth and Diversification: Applying Sector Rotation to Asset Allocation Strategies
Our Asset Allocation strategies use the BCM U.S. Sector Rotation portfolio (U.S. Large Cap equity) as the core equity exposure, and supplement it with diversifying allocations for a suite of comprehensive solutions. Like our Sector Rotation portfolios, each allocation can go to 100% cash or substitute if market conditions warrant.
International Equity Allocation
Quantitatively driven, fundamentally focused.
This allocation uses quantitative research to help determine if and when to invest in International Equity, but applies fundamental analysis to decide where.
BCM Diversified Equity
Investing 100% in Equity, this portfolio can allocate up to 70% in U.S. Large Cap, 15% in International and 15% in Global Macro Equity for more diversified exposure to global equity.
Global Macro Equity Allocation
Fundamentally managed, theme-based allocations.
Determined by the investment committees, this allocation invests in long-term themes, acknowledging the evolution of the global economy.
With an overall target allocation of 80% Equity/20% Fixed Income, this portfolio invests up to 55% in U.S. Large Cap Equity, 13% in International Equity, 12% in Global Macro Equity and 20% in High Quality Fixed Income.
High Quality Fixed Income Allocation
Fundamentally managed, seeking to lower portfolio volatility.
Investing only in investment grade or government-backed fixed income, this allocation is primarily managed to duration with the goal of reducing volatility.
BCM Moderate Growth
With an overall target allocation of 65% Equity/35% Fixed Income, this portfolio invests up to 45% in U.S. Large Cap Equity, 10% in International Equity, 10% in Global Macro Equity and 35% in High Quality Fixed Income.
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To take shelter in a temporary camp.
BCM Sector Strategies:
A suite of BCM strategies that own sectors with positive momentum. The strategies raise cash or cash substitutes when they hold three or fewer sectors—bivouacking when the investment climate warrants.
*The Cavalier Funds are distributed by Capital Investment Group, Inc. All fund-related inquiries should be directed to Capital Investment Group, Inc., which is not affiliated with Beaumont Capital Management. Information regarding the Cavalier Funds available through the link above is presented exclusively by Capital Investment Group, Inc.
Morningstar rating as of April 30, 2017. The 5-star rating is based on a three-year return period, however BCM began sub-advisor responsibilities August 1, 2016 and was a model manager from April 2016 through August 2016; while from August 2014 through November 2015 BCM was a model manager for the fund while it was under previous management.
The Cavalier Tactical Rotation Fund (Institutional Class) and Cavalier Global Opportunities Fund (Institutional Class) each received a 5-star rating out of 248 funds in the Tactical Allocation category, as of 4/30/2017. The Morningstar RatingTM for funds, or “star rating,” is calculated for funds with at least a three-year history. (Exchange-traded funds and open-end mutual funds are considered a single population for comparative purposes.) It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each fund category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star.
BCM is not a distributor of mutual funds, is not affiliated with any third party distributors and has not been involved in the preparation of the content supplied on any third party website. BCM does not guarantee or assume any responsibility for its content.