Furthermore, USMC’s underlying index utilizes a modified equal-dollar weighting methodology where securities in the top 10% of aggregate market capitalization are weighted by market-cap, but the remaining securities are equally weighted and volatility adjusted to give a higher tilt toward those that are more liquid and less volatile.
“The Fund has the potential to provide investors a systematic tilt toward lower historical volatility seeking to provide more stability and better downside protection; a highly focused, yet risk-aware, exposure to mega-cap stocks with the potential for better risk-adjusted returns,” according to Principal.
Top holdings include Apple (NasdaqGS: AAPL) 3.6%, McDonalds (NYSE: MCD) 3.3%, Honeywell International (NYSE: HON) 3.0%, 3M Co. (NYSE: MMM) 2.9% and Home Depot (NYSE: HD) 2.9%.
The portfolio includes a combination of well-known brands among the blue chip names with a strong balance sheets and a long history.
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