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 96.24 22 B 7.8% 45%   6% -43%
Amphenol APH NYSE Industrial Goods Cables, Connectors & Cabling Networks USD 103.49 31 B 11.4% 40%   6% -37%
Coca-Cola Company KO NYSE Consumer Non-Durables Beverages - Diversified USD 49.09 211 B -5.9% 33%   4% -37%
Ecolab ECL NYSE Industrial Goods Pollution Control Equipment USD 198.47 57 B 2.2% 46%   6% -40%
Fidelity National Information Services FIS NYSE Finance Financial Transaction Services USD 144.02 89 B 10.3% 43%   6% -35%
Fortive FTV NYSE Industrial Goods Precision, Measurement & Processing USD 72.37 24 B 6.6% 46%   6% -47%
Honeywell International HON NYSE Conglomerates Industrial Conglomerates USD 161.37 113 B -2.0% 43%   6% -43%
Johnson & Johnson JNJ NYSE Health Care Drug Manufacturers - Diversified USD 145.10 382 B 13.2% 30%   4% -27%
Lockheed Martin LMT NYSE Industrial Goods Aerospace/Defense - Major Diversified USD 379.61 106 B 0.2% 40%   5% -36%
Marsh & McLennan Companies MMC NYSE Finance Specialty Insurers & Brokers USD 116.27 59 B 17.0% 36%   5% -36%
McDonald's Corp. MCD NYSE Services Hotels, Restaurants, Fast-Food & Resorts USD 216.41 161 B 5.7% 40%   5% -36%
Moody's Corp. MCO NYSE Finance Financial Database Services USD 280.04 53 B 31.8% 49%   7% -42%
NextEra Energy NEE NYSE Utilities Renewable Energy Generation USD 276.20 135 B 24.8% 41%   5% -35%
Northrop Grumman NOC NYSE Industrial Goods Aerospace/Defense - Engineered Systems USD 325.89 54 B -10.0% 39%   5% -29%
Raytheon Technologies RTX NYSE Industrial Goods Aerospace/Defense - Engineered Systems USD 60.02 91 B -27.7% 76%   8% -52%
Roper Industries ROP NYSE Industrial Goods Engines, Industrial Equipt & Cpts USD 392.25 41 B 9.7% 39%   5% -35%
Torchmark Corp. TMK NYSE Finance Life Insurance USD 88.10 10 B 0.0% 0%   0% 0%
Visa V NYSE Finance Electronic Payments Services USD 197.45 384 B 14.1% 41%   6% -36%
Waste Management WM NYSE Utilities Environmental Services & Waste Mngt USD 114.30 48 B 1.0% 34%   4% -30%