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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 | 73.72 | 17 B | -10.4% | 42% | 6% | -43% |
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| Amphenol | APH | NYSE | Industrial Goods | Cables, Connectors & Cabling Networks | USD | 75.83 | 23 B | -18.7% | 35% | 4% | -38% |
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| Coca-Cola Company | KO | NYSE | Consumer Non-Durables | Beverages - Diversified | USD | 45.00 | 193 B | -0.5% | 28% | 4% | -38% |
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| Ecolab | ECL | NYSE | Industrial Goods | Pollution Control Equipment | USD | 161.40 | 47 B | -7.5% | 39% | 6% | -40% |
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| Fidelity National Information Services | FIS | NYSE | Services | Design Engng, Supply Chain & IT Services | USD | 125.29 | 77 B | 12.0% | 40% | 7% | -35% |
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| Fortive | FTV | NYSE | Industrial Goods | Precision, Measurement & Processing | USD | 52.10 | 18 B | -37.6% | 39% | 4% | -53% |
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| Honeywell International | HON | NYSE | Conglomerates | Industrial Conglomerates | USD | 131.75 | 94 B | -14.9% | 37% | 5% | -43% |
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| Johnson & Johnson | JNJ | NYSE | Health Care | Drug Manufacturers - Diversified | USD | 133.01 | 350 B | -2.1% | 29% | 4% | -28% |
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| Lockheed Martin | LMT | NYSE | Industrial Goods | Aerospace/Defense - Major Diversified | USD | 348.85 | 98 B | 19.3% | 36% | 6% | -37% |
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| Marsh & McLennan Companies | MMC | NYSE | Finance | Specialty Insurers & Brokers | USD | 89.55 | 45 B | -2.7% | 31% | 5% | -36% |
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| McDonald's Corp. | MCD | NYSE | Services | Hotels, Restaurants, Fast-Food & Resorts | USD | 168.13 | 125 B | -8.9% | 36% | 5% | -38% |
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| Moody's Corp. | MCO | NYSE | Finance | Financial Database Services | USD | 222.22 | 42 B | 23.9% | 45% | 9% | -42% |
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| NextEra Energy | NEE | NYSE | Utilities | Renewable Energy Generation | USD | 246.01 | 120 B | 29.9% | 34% | 7% | -36% |
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| Northrop Grumman | NOC | NYSE | Industrial Goods | Aerospace/Defense - Engineered Systems | USD | 313.72 | 53 B | 18.3% | 36% | 6% | -30% |
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| Raytheon Company | RTN | NYSE | Industrial Goods | Aerospace/Defense - Engineered Systems | USD | 141.21 | 39 B | -20.4% | 41% | 5% | -52% |
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| Roper Industries | ROP | NYSE | Industrial Goods | Engines, Industrial Equipt & Cpts | USD | 317.46 | 34 B | -6.6% | 36% | 6% | -35% |
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| Torchmark Corp. | TMK | NYSE | Finance | Life Insurance | USD | 88.10 | 10 B | 7.9% | 10% | 0% | -9% |
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| Visa Inc. | V | NYSE | Finance | Financial Transaction Services | USD | 165.57 | 325 B | 6.7% | 36% | 7% | -36% |
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| Waste Management | WM | NYSE | Utilities | Environmental Services & Waste Mngt | USD | 94.60 | 40 B | -7.0% | 30% | 4% | -30% |
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