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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 | 88.61 | 20 B | 22.6% | 22% | 7% | -22% |
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| Amphenol Corp. | APH | NYSE | Industrial Goods | Cables, Connectors & Cabling Networks | USD | 97.15 | 29 B | 11.4% | 22% | 6% | -23% |
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| Coca-Cola Company | KO | NYSE | Consumer Non-Durables | Beverages - Diversified | USD | 51.22 | 219 B | 17.5% | 17% | 3% | -12% |
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| Ecolab | ECL | NYSE | Industrial Goods | Pollution Control Equipment | USD | 197.24 | 57 B | 41.8% | 17% | 6% | -14% |
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| Fidelity National Information Services | FIS | NYSE | Services | Design Engng, Supply Chain & IT Services | USD | 131.09 | 42 B | 21.1% | 20% | 6% | -13% |
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| Fortive | FTV | NYSE | Industrial Goods | Precision, Measurement & Processing | USD | 78.99 | 26 B | 4.1% | 22% | 6% | -27% |
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| Honeywell International Inc. | HON | NYSE | Conglomerates | Industrial Conglomerates | USD | 173.58 | 125 B | 19.2% | 18% | 6% | -25% |
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| Johnson & Johnson | JNJ | NYSE | Health Care | Drug Manufacturers - Diversified | USD | 128.64 | 342 B | 4.5% | 19% | 4% | -17% |
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| Lockheed Martin Corp. | LMT | NYSE | Industrial Goods | Aerospace/Defense - Major Diversified | USD | 357.63 | 101 B | 15.0% | 21% | 6% | -30% |
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| Marsh & McLennan Companies | MMC | NYSE | Finance | Specialty Insurers & Brokers | USD | 100.98 | 51 B | 17.4% | 18% | 5% | -15% |
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| McDonald's Corp. | MCD | NYSE | Services | Hotels, Restaurants, Fast-Food & Resorts | USD | 215.00 | 164 B | 38.3% | 16% | 3% | -10% |
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| Moody's Corp. | MCO | NYSE | Finance | Financial Database Services | USD | 202.27 | 38 B | 9.7% | 25% | 6% | -31% |
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| NextEra Energy | NEE | NYSE | Utilities | Renewable Energy Generation | USD | 209.36 | 100 B | 26.8% | 15% | 2% | -8% |
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| Northrop Grumman Corp. | NOC | NYSE | Industrial Goods | Aerospace/Defense - Engineered Systems | USD | 323.20 | 55 B | 3.6% | 26% | 6% | -29% |
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| Raytheon Company | RTN | NYSE | Industrial Goods | Aerospace/Defense - Engineered Systems | USD | 180.56 | 51 B | -6.4% | 24% | 5% | -30% |
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| Roper Industries | ROP | NYSE | Industrial Goods | Engines, Industrial Equipt & Cpts | USD | 370.91 | 39 B | 32.0% | 22% | 8% | -21% |
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| Torchmark Corp. | TMK | NYSE | Finance | Life Insurance | USD | 91.10 | 10 B | 8.8% | 19% | 5% | -21% |
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| Visa Inc. | V | NYSE | Finance | Financial Transaction Services | USD | 180.57 | 360 B | 29.6% | 23% | 8% | -19% |
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| Waste Management | WM | NYSE | Utilities | Environmental Services & Waste Mngt | USD | 117.13 | 50 B | 44.8% | 16% | 5% | -11% |
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