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US Large Cap Selection for Peace of Mind
- Pininvest Analysis
With the launch of a number of low volatility funds, the fact higher risk may not after all – and over time – be rewarded with higher performance, as the theory suggests, has been given publicity
However, a few sectors will be overweight in low volatility asset selections, with Utilities and Finance counting for 50¨% of a 100 low volatility / large market cap asset selection
The sensitivity of these dominant sectors to the business cycle will determine the actual outcome over time, as the business cycle runs its course – and not over just one year
Under the assumption an investor might seek stability without having to align his or her expectations with the full cycle, we create – as a reference dated mid-January 2018 – a portfolio based on the lowest volatilities and the lowest Maximum Drawdown (smallest continuous price drop observed over the past year), resulting in a fairly balanced sector combination in the large cap universe
If this selection provides peace of mind (by outperforming the benchmark SPDR® S&P® 500 ETF) remains to be seen
US Large Cap Selection for Peace of Mind • Updated:
| Name | Ticker | Exchange | Sector | Industry | Currency | Cur.Price | Mkt.Cap | Perf. | Vol. | Risk Contrib. | MDD |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| AMETEK | AME | NYSE | Industrial Goods | Precision, Measurement & Processing | USD | 96.24 | 22 B | 7.8% | 45% | 6% | -43% |
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| Amphenol | APH | NYSE | Industrial Goods | Cables, Connectors & Cabling Networks | USD | 103.49 | 31 B | 11.4% | 40% | 6% | -37% |
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| Coca-Cola Company | KO | NYSE | Consumer Non-Durables | Beverages - Diversified | USD | 49.09 | 211 B | -5.9% | 33% | 4% | -37% |
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| Ecolab | ECL | NYSE | Industrial Goods | Pollution Control Equipment | USD | 198.47 | 57 B | 2.2% | 46% | 6% | -40% |
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| Fidelity National Information Services | FIS | NYSE | Finance | Financial Transaction Services | USD | 144.02 | 89 B | 10.3% | 43% | 6% | -35% |
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| Fortive | FTV | NYSE | Industrial Goods | Precision, Measurement & Processing | USD | 72.37 | 24 B | 6.6% | 46% | 6% | -47% |
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| Honeywell International | HON | NYSE | Conglomerates | Industrial Conglomerates | USD | 161.37 | 113 B | -2.0% | 43% | 6% | -43% |
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| Johnson & Johnson | JNJ | NYSE | Health Care | Drug Manufacturers - Diversified | USD | 145.10 | 382 B | 13.2% | 30% | 4% | -27% |
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| Lockheed Martin | LMT | NYSE | Industrial Goods | Aerospace/Defense - Major Diversified | USD | 379.61 | 106 B | 0.2% | 40% | 5% | -36% |
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| Marsh & McLennan Companies | MMC | NYSE | Finance | Specialty Insurers & Brokers | USD | 116.27 | 59 B | 17.0% | 36% | 5% | -36% |
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| McDonald's Corp. | MCD | NYSE | Services | Hotels, Restaurants, Fast-Food & Resorts | USD | 216.41 | 161 B | 5.7% | 40% | 5% | -36% |
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| Moody's Corp. | MCO | NYSE | Finance | Financial Database Services | USD | 280.04 | 53 B | 31.8% | 49% | 7% | -42% |
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| NextEra Energy | NEE | NYSE | Utilities | Renewable Energy Generation | USD | 276.20 | 135 B | 24.8% | 41% | 5% | -35% |
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| Northrop Grumman | NOC | NYSE | Industrial Goods | Aerospace/Defense - Engineered Systems | USD | 325.89 | 54 B | -10.0% | 39% | 5% | -29% |
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| Raytheon Technologies | RTX | NYSE | Industrial Goods | Aerospace/Defense - Engineered Systems | USD | 60.02 | 91 B | -27.7% | 76% | 8% | -52% |
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| Roper Industries | ROP | NYSE | Industrial Goods | Engines, Industrial Equipt & Cpts | USD | 392.25 | 41 B | 9.7% | 39% | 5% | -35% |
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| Torchmark Corp. | TMK | NYSE | Finance | Life Insurance | USD | 88.10 | 10 B | 0.0% | 0% | 0% | 0% |
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| Visa | V | NYSE | Finance | Electronic Payments Services | USD | 197.45 | 384 B | 14.1% | 41% | 6% | -36% |
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| Waste Management | WM | NYSE | Utilities | Environmental Services & Waste Mngt | USD | 114.30 | 48 B | 1.0% | 34% | 4% | -30% |
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