The provider of tactical ETF-based investment solutions, Beaumont Capital Management, reports that its BCM DynamicBelay Target Date Funds (TDF) series reached its three-year performance milestone, effective January 1, 2018.
The firm writes that the DynamicBelay portfolios address the need for more versatile retirement investment solutions that aim to provide both growth in up markets and protection in periods of severe market drawdowns. These products are designed to give investors greater choice in the TDF marketplace to help better match their varying goals and risk profiles.
The DynamicBelay series – named for the mountaineering technique in which a guide protects climbers from a long fall by adjusting their safety ropes – is offered in 10-year intervals currently through 2060.
Te firm writes that the TDFs are designed as age-based portfolios to meet a variety of retirement needs and goals. Unlike first-generation TDFs, which generally only make small annual adjustments, the DynamicBelay series offers overall strategic allocations that are adjusted over longer periods, the way most investment advisors would manage a long-term portfolio. Then, they use underlying tactical allocations to adjust to current market conditions, allowing portions of the portfolios to move to cash only when necessary.
“Our industry learned a tragic lesson in 2008. Most TDFs failed to deliver protection from major losses, even for investors fast approaching their retirement date,” says David Haviland, Managing Partner and Portfolio Manager of Beaumont Capital Management. “We took this lesson to heart. The DynamicBelay TDFs address the shortcomings of the set-it-and-forget-it TDFs that still dominate the market today and put retirement investors at unwarranted, and often unknown risks.”
Launched nearly 30 years ago, TDFs are currently the most common qualified default investment alternative (QDIA) used in 401(k)s today, and claim a majority of employer sponsored retirement plans. While the number of TDF offerings has grown over the past decade, their underlying construction and strategies have changed very little. As a result, participants are provided with the same solutions, rather than offered a variety of choices.
“As uncertainty looms in the markets again, plan sponsors and financial advisors are duty-bound to equip their clients with more versatile retirement options,” Haviland says. “We strongly feel that investors need both realistic growth and defensive capabilities designed to kick in only when necessary. If people preparing for their retirement know they are being given appropriate investments options, it could increase their confidence to remain invested longer providing them with a comfort they deserve.”