Sector Rotation Using Quantitative Research, Investment Rules and Common Sense
BCM’s Sector Rotation based growth portfolios are built using a quantitatively researched approach and investment rules, and have the ability to get defensive by raising partial or 100% cash equivalents during longer and/or larger market drawdowns.
Offering a pure U.S. sector rotation strategy and sector rotation as part of three diversified portfolios for standalone or smaller account solutions.
U.S. Large Cap Sector Rotation
Momentum-based, repeatable sector rotation process. Here are the primary considerations:
Is price trend/momentum positive or negative? The strategy will seek to own all sectors with positive momentum.
When a sector’s trend turns negative, we ask how. Three additional metrics are considered to determine when to sell a sector.
Additional investment rules are applied. Confirming conviction in a trend change helps avoid whipsaw, cash drag and unnecessary trading.
Get defensive by raising cash. In addition to selling negative trending sectors, the strategy can move to partial or 100% cash equivalents in bear markets.
BCM U.S. Sector Rotation
Invests in 11 sectors of the S&P 500® Index, primarily through the SSgA SPDR U.S. Sector ETFs.
Fit within a client account:
Designed to be a full or partial replacement of core (strategic) equity exposure (U.S. or global) to add defensive measures.
Setting expectations:
Expect ordinary stock market movement, but the strategy will seek to avoid large drawdowns when the markets enter longer or more severe periods of duress.
Sector Rotation as part of a Diversified Allocation Portfolio
We’ve done the work for you. You can choose a 100% diversified equity, 80% equity/20% fixed income or a 65% equity/35% fixed income solution.
Our diversified sector rotation-based strategies use the BCM U.S. Sector Rotation portfolio (U.S. Large Cap Equity) as the core equity exposure, and pair it with diversifying allocations including International Equity, Global Macro and High Quality Fixed Income. Each allocation can go to 100% cash equivalents if market conditions warrant.
International Equity
Quantitatively driven, fundamentally focused. .
Uses quantitative research to help determine if and when to invest in international equity markets, but applies fundamental analysis to decide where.
Global Macro
Fundamentally managed, theme-based allocations.
Determined by the investment committees, this allocation invests in long-term themes, acknowledging the evolution of the global economy.
High Quality Fixed Income
Fundamentally managed, seeking to lower portfolio volatility.
Investing only in investment grade or government-backed fixed income, this allocation focuses on managing duration with the goal of reducing volatility.
BCM Diversified Equity
100% Equity portfolio investing up to 70% in U.S. Large Cap, 15% in International Equity and 15% in Global Macro.
Designed for investors who are seeking growth but want to capitalize on the fact that we live in a global economy.
BCM Growth
80% Equity/20% Fixed Income portfolio investing up to 55% in U.S. Large Cap Equity, 13% in International Equity, 12% in Global Macro and 20% in High Quality Fixed Income.
Designed for investors seeking lower volatility and for whom 100% equity is not appropriate.
BCM Moderate Growth
65% Equity/35% Fixed Income portfolio investing 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.
Designed for investors seeking low volatility and for whom 100% equity is not appropriate.
Fit within a client account:
Designed to be a diversified, total account solution for clients seeking global growth with lower volatility and ability to avoid large drawdowns.
Setting expectations:
Expect ordinary stock and bond market movement, but the strategies will seek to avoid large drawdowns when markets enter longer or more severe periods of duress.
Strategy objective:
Seek to meet or beat their respective indices over a full market cycle, including both a bull and a bear market, while reducing volatility and large drawdowns.
Ascend Prudently.
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.
Our Philosophy
Ascend when conditions are right, and seek shelter when they’re not.
Want to know if you can access BCM’s strategies?
We are available through many TAMPs, and to hundreds of broker dealers and RIAs. We can help guide you in the right direction.
Fill out this quick form and we will get back to you with the best method to access these sector rotation-based strategies, or any of our other strategies that may be available to you.
Or call our consultants at (844) 401-7699.