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