US Large Cap Selection for Peace of Mind

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

Read our note

US Large Cap Selection for Peace of Mind • Updated:

Name Ticker Exchange Sector Industry Currency Cur.Price Mkt.Cap Perf. Vol. Risk Contrib. MDD
 
Ametek AME NYSE Industrial Goods Precision, Measurement & Processing USD 84.49 19 B 13.3% 22%   7% -22%
Amphenol Corp. APH NYSE Industrial Goods Cables, Connectors & Cabling Networks USD 89.51 27 B 3.6% 21%   6% -23%
Coca-Cola Company KO NYSE Consumer Non-Durables Beverages - Diversified USD 49.61 212 B 20.7% 17%   3% -12%
Ecolab ECL NYSE Industrial Goods Pollution Control Equipment USD 182.48 53 B 27.3% 16%   5% -14%
Fidelity National Information Services FIS NYSE Services Design Engng, Supply Chain & IT Services USD 118.74 38 B 16.0% 19%   6% -13%
Fortive FTV NYSE Industrial Goods Precision, Measurement & Processing USD 78.04 26 B 3.6% 22%   6% -27%
Honeywell International Inc. HON NYSE Conglomerates Industrial Conglomerates USD 166.68 121 B 17.0% 18%   6% -25%
Johnson & Johnson JNJ NYSE Health Care Drug Manufacturers - Diversified USD 138.85 369 B 18.1% 19%   4% -17%
Lockheed Martin Corp. LMT NYSE Industrial Goods Aerospace/Defense - Major Diversified USD 338.78 96 B 8.2% 22%   6% -30%
Marsh & McLennan Companies MMC NYSE Finance Specialty Insurers & Brokers USD 95.38 48 B 19.4% 18%   5% -15%
McDonald's Corp. MCD NYSE Services Hotels, Restaurants, Fast-Food & Resorts USD 197.77 151 B 23.8% 17%   3% -10%
Moody's Corp. MCO NYSE Finance Financial Database Services USD 185.10 35 B 7.4% 25%   7% -31%
NextEra Energy NEE NYSE Utilities Renewable Energy Generation USD 203.37 97 B 28.0% 16%   2% -8%
Northrop Grumman Corp. NOC NYSE Industrial Goods Aerospace/Defense - Engineered Systems USD 312.07 53 B -4.5% 26%   5% -33%
Raytheon Company RTN NYSE Industrial Goods Aerospace/Defense - Engineered Systems USD 180.00 50 B -13.1% 23%   5% -32%
Roper Industries ROP NYSE Industrial Goods Engines, Industrial Equipt & Cpts USD 348.07 36 B 25.2% 22%   8% -21%
Torchmark Corp. TMK NYSE Finance Life Insurance USD 87.19 10 B 2.5% 19%   5% -21%
Visa Inc. V NYSE Finance Financial Transaction Services USD 162.64 326 B 24.6% 23%   7% -19%
Waste Management WM NYSE Utilities Environmental Services & Waste Mngt USD 108.43 46 B 33.0% 16%   4% -11%