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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 | 99.33 | 23 B | 39.2% | 18% | 7% | -10% |
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| Amphenol | APH | NYSE | Industrial Goods | Cables, Connectors & Cabling Networks | USD | 103.41 | 31 B | 21.3% | 20% | 6% | -20% |
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| Coca-Cola Company | KO | NYSE | Consumer Non-Durables | Beverages - Diversified | USD | 57.01 | 244 B | 23.6% | 17% | 4% | -10% |
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| Ecolab | ECL | NYSE | Industrial Goods | Pollution Control Equipment | USD | 198.18 | 57 B | 29.0% | 16% | 5% | -13% |
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| Fidelity National Information Services | FIS | NYSE | Services | Design Engng, Supply Chain & IT Services | USD | 147.96 | 91 B | 44.2% | 19% | 7% | -10% |
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| Fortive | FTV | NYSE | Industrial Goods | Precision, Measurement & Processing | USD | 75.03 | 25 B | 2.2% | 21% | 5% | -28% |
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| Honeywell International | HON | NYSE | Conglomerates | Industrial Conglomerates | USD | 175.46 | 125 B | 26.2% | 17% | 6% | -12% |
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| Johnson & Johnson | JNJ | NYSE | Health Care | Drug Manufacturers - Diversified | USD | 149.50 | 393 B | 17.6% | 16% | 2% | -12% |
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| Lockheed Martin | LMT | NYSE | Industrial Goods | Aerospace/Defense - Major Diversified | USD | 437.17 | 123 B | 52.8% | 16% | 6% | -7% |
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| Marsh & McLennan Companies | MMC | NYSE | Finance | Specialty Insurers & Brokers | USD | 115.14 | 58 B | 42.0% | 16% | 6% | -8% |
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| McDonald's Corp. | MCD | NYSE | Services | Hotels, Restaurants, Fast-Food & Resorts | USD | 210.39 | 158 B | 18.1% | 15% | 3% | -15% |
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| Moody's Corp. | MCO | NYSE | Finance | Financial Database Services | USD | 260.19 | 49 B | 69.0% | 20% | 9% | -11% |
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| NextEra Energy | NEE | NYSE | Utilities | Renewable Energy Generation | USD | 265.81 | 130 B | 56.7% | 14% | 2% | -7% |
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| Northrop Grumman | NOC | NYSE | Industrial Goods | Aerospace/Defense - Engineered Systems | USD | 381.84 | 64 B | 38.2% | 22% | 7% | -12% |
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| Raytheon Company | RTN | NYSE | Industrial Goods | Aerospace/Defense - Engineered Systems | USD | 227.62 | 63 B | 35.1% | 21% | 5% | -9% |
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| Roper Industries | ROP | NYSE | Industrial Goods | Engines, Industrial Equipt & Cpts | USD | 377.90 | 39 B | 34.1% | 18% | 7% | -14% |
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| Torchmark Corp. | TMK | NYSE | Finance | Life Insurance | USD | 88.10 | 10 B | 7.4% | 12% | 2% | -9% |
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| Visa Inc. | V | NYSE | Finance | Financial Transaction Services | USD | 202.85 | 399 B | 51.0% | 17% | 7% | -9% |
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| Waste Management | WM | NYSE | Utilities | Environmental Services & Waste Mngt | USD | 121.05 | 51 B | 29.9% | 14% | 4% | -10% |
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