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