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 90.86 21 B 13.2% 23%   7% -22%
Amphenol Corp. APH NYSE Industrial Goods Cables, Connectors & Cabling Networks USD 95.05 28 B -0.2% 24%   6% -22%
Coca-Cola Company KO NYSE Consumer Non-Durables Beverages - Diversified USD 53.96 231 B 19.9% 18%   3% -12%
Ecolab ECL NYSE Industrial Goods Pollution Control Equipment USD 192.11 55 B 24.4% 19%   6% -14%
Fidelity National Information Services FIS NYSE Services Design Engng, Supply Chain & IT Services USD 133.06 82 B 22.8% 22%   7% -13%
Fortive FTV NYSE Industrial Goods Precision, Measurement & Processing USD 69.50 23 B -19.9% 24%   4% -27%
Honeywell International Inc. HON NYSE Conglomerates Industrial Conglomerates USD 166.21 120 B 6.1% 20%   5% -25%
Johnson & Johnson JNJ NYSE Health Care Drug Manufacturers - Diversified USD 129.54 342 B -4.8% 20%   3% -17%
Lockheed Martin Corp. LMT NYSE Industrial Goods Aerospace/Defense - Major Diversified USD 392.66 111 B 18.3% 22%   6% -30%
Marsh & McLennan Companies MMC NYSE Finance Specialty Insurers & Brokers USD 100.03 51 B 17.4% 19%   5% -15%
McDonald's Corp. MCD NYSE Services Hotels, Restaurants, Fast-Food & Resorts USD 207.40 158 B 34.1% 17%   4% -10%
Moody's Corp. MCO NYSE Finance Financial Database Services USD 213.33 40 B 21.7% 26%   7% -28%
NextEra Energy NEE NYSE Utilities Renewable Energy Generation USD 218.31 105 B 28.4% 16%   2% -8%
Northrop Grumman Corp. NOC NYSE Industrial Goods Aerospace/Defense - Engineered Systems USD 371.43 63 B 21.0% 27%   7% -29%
Raytheon Company RTN NYSE Industrial Goods Aerospace/Defense - Engineered Systems USD 204.06 57 B 1.3% 25%   5% -30%
Roper Industries ROP NYSE Industrial Goods Engines, Industrial Equipt & Cpts USD 356.73 37 B 15.1% 23%   7% -21%
Torchmark Corp. TMK NYSE Finance Life Insurance USD 88.10 10 B 3.5% 18%   4% -21%
Visa Inc. V NYSE Finance Financial Transaction Services USD 176.11 349 B 21.2% 24%   8% -19%
Waste Management WM NYSE Utilities Environmental Services & Waste Mngt USD 111.90 47 B 23.7% 16%   4% -11%