11 Market Cap Leaders As A Portfolio

|
Includes: AAPL, F, GM, XOM
by: MyPlanIQ

John Reeves of the Motley Fool notes that market cap leaders don't change that often. While Apple (NASDAQ:AAPL) has surged past ExxonMobil (NYSE:XOM) into the No. 1 position, the crowning of a new market cap leader is far more unusual than you might think.There have been 11 leaders since 1926, and I wondered whether these companies would make for a good selection of stocks or is there a gradual decline after hitting the heights.

Below are the 11 market cap leaders of the past 86 years:

Company Industry Current Market Cap ($B)
Apple (AAPL) Personal computers $497
ExxonMobil (XOM) Major integrated oil and gas $410
Microsoft (NASDAQ:MSFT) Application software $267
IBM (NYSE:IBM) Diversified computer systems $233
Wal-Mart (NYSE:WMT) Discount, variety stores $204
General Electric (NYSE:GE) Diversified machinery $200
AT&T (NYSE:T) Telecom services $184
Cisco (NASDAQ:CSCO) Networking and communications $106
Altria (NYSE:MO) Cigarettes $62
DuPont (NYSE:DD) Chemicals $47
General Motors (NYSE:GM) Auto manufacture $41
Click to enlarge
List of companies from S&P Capital IQ. Industry and market cap info from Yahoo! Finance.

This is a top flight portfolio, although in this case, I replaced GM (GM) with Ford (NYSE:F) to give a longer history as GM only recently emerged from Bankruptcy. It will be interesting to measure them with our dividend bearing ETF portfolio:

Asset Fund in this portfolio
REAL ESTATE (NYSEARCA:ICF) iShares Cohen & Steers Realty Majors
CASH CASH
FIXED INCOME (NYSEARCA:TIP) iShares Barclays TIPS Bond
Emerging Market (NYSEARCA:VWO) Vanguard Emerging Markets Stock ETF
US EQUITY (NYSEARCA:DVY) iShares Dow Jones Select Dividend Index
US EQUITY (NYSEARCA:VIG) Vanguard Dividend Appreciation ETF
INTERNATIONAL EQUITY (NYSEARCA:IDV) iShares Dow Jones Intl Select Div Idx
High Yield Bond (NYSEARCA:HYG) iShares iBoxx $ High Yield Corporate Bd
INTERNATIONAL BONDS (NYSEARCA:EMB) iShares JPMorgan USD Emerg Markets Bond
Click to enlarge

Portfolio Performance Comparison

Portfolio/Fund Name YTD
Return
1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
Retirement Income ETFs Tactical Asset Allocation Moderate 1% 1% 0% 10% 76% 8% 59%
11 Market Cap Leaders 16% 25% 126% 36% 195% 13% 51%
Retirement Income ETFs Strategic Asset Allocation Moderate 5% 3% 12% 18% 138% 3% 11%
Click to enlarge

Many of these stocks are dividend bearing which is of added benefit. We also note that Apple has been on such an extended run that they end up being a dominant force -- and for how long will that go on? Despite this, I think this is an interesting set of equities because of their longevity, experience and strength. You can also look at this view which shows AAPL so that you can see Apple's impact overall.

Three Month Chart One Year Chart Three Year Chart Five Year Chart

More...

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.