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 98.17 22 B 32.7% 21%   7% -17%
Amphenol Corp. APH NYSE Industrial Goods Cables, Connectors & Cabling Networks USD 102.25 30 B 16.2% 23%   6% -20%
Coca-Cola Company KO NYSE Consumer Non-Durables Beverages - Diversified USD 52.67 226 B 8.2% 18%   3% -12%
Ecolab ECL NYSE Industrial Goods Pollution Control Equipment USD 191.74 55 B 21.5% 19%   5% -14%
Fidelity National Information Services FIS NYSE Services Design Engng, Supply Chain & IT Services USD 135.82 83 B 27.2% 21%   6% -10%
Fortive FTV NYSE Industrial Goods Precision, Measurement & Processing USD 71.63 24 B -4.7% 24%   5% -28%
Honeywell International HON NYSE Conglomerates Industrial Conglomerates USD 181.75 130 B 24.6% 19%   6% -16%
Johnson & Johnson JNJ NYSE Health Care Drug Manufacturers - Diversified USD 134.94 355 B -5.0% 21%   3% -17%
Lockheed Martin LMT NYSE Industrial Goods Aerospace/Defense - Major Diversified USD 393.55 111 B 33.6% 20%   6% -19%
Marsh & McLennan Companies MMC NYSE Finance Specialty Insurers & Brokers USD 105.50 53 B 21.9% 18%   5% -15%
McDonald's Corp. MCD NYSE Services Hotels, Restaurants, Fast-Food & Resorts USD 193.97 146 B 5.9% 16%   3% -15%
Moody's Corp. MCO NYSE Finance Financial Database Services USD 220.15 42 B 50.8% 24%   9% -19%
NextEra Energy NEE NYSE Utilities Renewable Energy Generation USD 231.42 113 B 31.0% 15%   2% -7%
Northrop Grumman Corp. NOC NYSE Industrial Goods Aerospace/Defense - Engineered Systems USD 356.66 60 B 32.7% 24%   7% -17%
Raytheon Company RTN NYSE Industrial Goods Aerospace/Defense - Engineered Systems USD 218.88 61 B 22.2% 23%   6% -19%
Roper Industries ROP NYSE Industrial Goods Engines, Industrial Equipt & Cpts USD 345.64 36 B 16.7% 21%   7% -18%
Torchmark Corp. TMK NYSE Finance Life Insurance USD 88.10 10 B 2.6% 16%   3% -20%
Visa Inc. V NYSE Finance Financial Transaction Services USD 179.77 354 B 29.0% 22%   7% -16%
Waste Management WM NYSE Utilities Environmental Services & Waste Mngt USD 112.16 48 B 23.3% 16%   4% -10%