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