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