Tactical: BCM U.S. Sector Rotation
This strategy uses a quantitative, rules-based approach to shift defensively during major market downturns by raising partial or full cash equivalents. The strategy invests in 11 sectors of the S&P 500® Index, primarily through the SSgA SPDR U.S. Sector ETFs—offering pure U.S. sector rotation strategies and three diversified portfolios for smaller accounts.
How the strategies fit into client portfolios
The strategy is designed to be a full or partial replacement of core (strategic) equity exposure (U.S. or global) to add defensive measures.
The rotation process is based on these considerations:
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Seek to own all sectors with positive momentum.
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Consider additional metrics when a sector’s trend turns negative to determine when to sell.
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Apply additional investment rules to confirm conviction in a trend change.
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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.
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.
| Strategy | Allocation | Notes |
|---|---|---|
| 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. |
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