Beacon Capital Management has launched two complementary exchange traded funds on the New York Stock Exchange Arca: the Beacon Tactical Risk (NYSE Arca: BTR) and the Beacon Selective Risk (NYSE Arca: BSR).
BTR uses an equal sector allocation across 11 sectors as a first line of defense and a mechanical stop-loss as a secondary defense to limit losses before they become too catastrophic. When the stop-loss is triggered, equity positions are sold and portfolio assets are repositioned into fixed income.
BTR has been designed to deliver on its core objective in both bear and bull market conditions.
Using the Vantage 2.0 Benchmark Index, Beacon’s team determines when traditional diversification may not be enough to protect investors from persistent market downturns. This approach automatically withdraws investors’ funds from equity positions to provide a safety valve helping minimize losses during volatile market periods.
BSR, meanwhile, operates with targeted loss-reduction protections at the sector level and has been designed as a supplement to BTR to help capture gains in sideways market conditions.
When fully invested in equities, the funds look identical. However, how they respond to volatility differs, which means they can complement each other. By using both funds together, with BTR as the primary holding, investors can add an additional layer of risk management style diversification to their portfolios.
“In today’s environment where persistent market volatility is now the norm, sharp declines in daily market value are not only more frequent, but more concentrated as well as powerful,” said Beacon Capital Management president and CIO Chris Cook in a news release. “After experiencing a catastrophic loss to their portfolio value, the average investor simply does not have the time often required just to get back to where they started. This is why we designed our investment strategy to have mechanical stop-loss measures—to limit losses before they become too catastrophic.”
Both funds have an expense ratio of 1.00%.
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