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 117.35 27 B 18.6% 47%   7% -43%
Amphenol APH NYSE Industrial Goods Cables, Connectors & Cabling Networks USD 132.24 39 B 26.5% 41%   6% -35%
Coca-Cola Company KO NYSE Consumer Non-Durables Beverages - Diversified USD 48.49 208 B -13.1% 35%   4% -37%
Ecolab ECL NYSE Industrial Goods Pollution Control Equipment USD 212.39 61 B 8.2% 49%   6% -40%
Fidelity National Information Services FIS NYSE Finance Financial Transaction Services USD 129.08 80 B -11.8% 46%   6% -35%
Fortive FTV NYSE Industrial Goods Precision, Measurement & Processing USD 69.32 23 B -9.5% 49%   6% -47%
Honeywell International HON NYSE Conglomerates Industrial Conglomerates USD 202.25 142 B 16.2% 45%   6% -42%
Johnson & Johnson JNJ NYSE Health Care Drug Manufacturers - Diversified USD 163.55 431 B 13.0% 30%   4% -27%
Lockheed Martin LMT NYSE Industrial Goods Aerospace/Defense - Major Diversified USD 339.88 95 B -19.1% 41%   5% -37%
Marsh & McLennan Companies MMC NYSE Finance Specialty Insurers & Brokers USD 111.52 56 B -0.4% 37%   5% -36%
McDonald's Corp. MCD NYSE Services Hotels, Restaurants, Fast-Food & Resorts USD 213.38 159 B 3.4% 40%   5% -36%
Moody's Corp. MCO NYSE Finance Financial Database Services USD 266.70 50 B 5.2% 50%   7% -42%
NextEra Energy NEE NYSE Utilities Renewable Energy Generation USD 84.21 165 B 29.8% 42%   5% -35%
Northrop Grumman NOC NYSE Industrial Goods Aerospace/Defense - Engineered Systems USD 298.16 50 B -20.4% 39%   4% -30%
Raytheon Technologies RTX NYSE Industrial Goods Aerospace/Defense - Engineered Systems USD 67.58 103 B -32.0% 79%   8% -52%
Roper Industries ROP NYSE Industrial Goods Engineered Industrial Products USD 419.22 44 B 11.8% 41%   5% -35%
Visa V NYSE Finance Electronic Payments Services USD 202.02 392 B -0.9% 43%   6% -36%
Waste Management WM NYSE Utilities Environmental Services & Waste Mngt USD 115.36 49 B -2.9% 35%   5% -30%