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 89.76 21 B -0.8% 45%   7% -43%
Amphenol APH NYSE Industrial Goods Cables, Connectors & Cabling Networks USD 98.14 29 B 0.8% 41%   6% -38%
Coca-Cola Company KO NYSE Consumer Non-Durables Beverages - Diversified USD 45.23 194 B -10.1% 33%   4% -38%
Ecolab ECL NYSE Industrial Goods Pollution Control Equipment USD 201.72 58 B 3.3% 45%   7% -40%
Fidelity National Information Services FIS NYSE Services Design Engng, Supply Chain & IT Services USD 137.52 85 B 9.6% 44%   7% -35%
Fortive FTV NYSE Industrial Goods Precision, Measurement & Processing USD 69.15 23 B -14.3% 46%   5% -49%
Honeywell International HON NYSE Conglomerates Industrial Conglomerates USD 147.22 103 B -14.6% 43%   5% -43%
Johnson & Johnson JNJ NYSE Health Care Drug Manufacturers - Diversified USD 142.98 377 B 4.5% 31%   4% -28%
Lockheed Martin LMT NYSE Industrial Goods Aerospace/Defense - Major Diversified USD 362.61 102 B 0.6% 39%   5% -37%
Marsh & McLennan Companies MMC NYSE Finance Specialty Insurers & Brokers USD 107.88 55 B 6.8% 36%   5% -36%
McDonald's Corp. MCD NYSE Services Hotels, Restaurants, Fast-Food & Resorts USD 188.50 140 B -8.4% 40%   5% -38%
Moody's Corp. MCO NYSE Finance Financial Database Services USD 283.66 53 B 41.9% 50%   10% -42%
NextEra Energy NEE NYSE Utilities Renewable Energy Generation USD 246.96 121 B 21.2% 39%   6% -36%
Northrop Grumman NOC NYSE Industrial Goods Aerospace/Defense - Engineered Systems USD 312.40 52 B -2.3% 39%   4% -30%
Raytheon Technologies RTX NYSE Industrial Goods Aerospace/Defense - Engineered Systems USD 63.32 18 B -23.2% 75%   4% -68%
Roper Industries ROP NYSE Industrial Goods Engines, Industrial Equipt & Cpts USD 393.34 41 B 5.1% 39%   6% -35%
Torchmark Corp. TMK NYSE Finance Life Insurance USD 88.10 10 B -4.0% 6%   0% -9%
Visa Inc. V NYSE Finance Financial Transaction Services USD 197.76 384 B 12.6% 41%   7% -36%
Waste Management WM NYSE Utilities Environmental Services & Waste Mngt USD 105.21 44 B -7.9% 34%   4% -30%