Investment Products and Services Launches

Beaumont Capital Management launches smart beta solutions; Vanguard adds 2065 TDF; Pacific Funds cuts fees on fixed income funds; and more.

By Javier Simon | January 05, 2017
Page 1 of 6 View Full Article

Beaumont Capital Management Launches Smart Beta Solutions

Beaumont Capital Management (BCM) has launched two new smart beta solutions. The BCM Paradigm Series includes BCM Paradigm Tactical Fixed Income and BCM Paradigm Tactical Factor Selection, which have inception dates of October 1, 2015, and June 1, 2015, respectively. The Paradigm process seeks risk-adjusted returns and downside protection through rules-based analysis of investor behavior by identifying shifts between normal and volatile markets, the firm explains. The Paradigm Series broadens the range of BCM’s offerings and provides new solutions to meet the challenges of evolving markets and the demands of today’s investors.

“Lots of smart beta, or factor-based ETFs [exchange-traded funds], have been launched recently, but few strategies, in our opinion, seek to use these products in a constructive way,” says Eric Biegeleisen, BCM’s director of Quantitative Research and portfolio manager of the Paradigm strategies. “With Paradigm, we are striving to use smart beta to pursue alpha.”

Through the Paradigm investment process, ETFs are examined for their relative and absolute levels of volatility and then categorized as either ‘normal’ or ‘volatile’. The normal candidates are then allocated based upon their relative attractiveness, which leads to the construction of a portfolio seeking positive returns, while minimizing volatility and drawdown, BCM notes. The strategies’ quantitative models analyze each ETF for inclusion in the portfolio daily and rebalances typically occur weekly.

“Based upon the continued flows to smart beta, it is clear that investors today find significant value in the benefits offered by smart beta products, particularly those that seek to provide downside protection,” says Biegeleisen. “The Paradigm investment thesis is designed with minimizing portfolio drawdowns as its primary objective. This ultimately allows the strategies to ideally deliver alpha that investors need for long-term financial planning and portfolio growth. We believe the best investment processes include a good defense.”

NEXT: Charles Schwab Expands ETF OneSource Series with OppenheimerFunds