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 equally weighted when owned.
  • 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.

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.

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.

For BCM U.S. Sector Rotation only, Beaumont now provides investment management services to individual separate accounts, SMA/wrap sponsors, Collective Investment Funds and as a subadvisor to ’40 Act funds.

BCM Global Sector Rotation

Invests in 11 sectors of the S&P Cap 1200 Index, primarily through the iShares® Global Sector ETFs.

Click here to gain access to strategy materials or learn more on our GIPS® verified performance.

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. 

Diversifying Allocations

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.

Diversified Portfolios

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.

BCM Growth

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.

Click here to gain access to strategy materials or learn more on our GIPS® verified performance.

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Bivouac:

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.