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Creating Market Cap Weighted Portfolios with Monthly Rebalancing
A financial analysis exploring different portfolio strategies based on the top 100 stocks by market capitalization in 2021, with monthly rebalancing and varying limits on the number of assets.
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Aurora
Hello. Would you like to perform some financial analysis? Maybe on Google or Intel?
User
What 100 stocks had the highest market cap in 2021
Aurora
Okay, I can definitely help with that! Here's a summary of the top 100 stocks by market capitalization at the end of 2021, based on the data you provided:
Top 100 Stocks by Market Cap (Year-End 2021)
| Ticker | Company Name | Market Cap (USD) | Date |
|---|---|---|---|
| AAPL | Apple Inc. | 2,963,222,636,670 | 2021-12-31 |
| MSFT | Microsoft | 2,533,019,152,992 | 2021-12-31 |
| GOOG | Alphabet Inc. | 1,926,437,348,800 | 2021-12-31 |
| AMZN | Amazon | 1,683,872,000,000 | 2021-12-31 |
| TSLA | Tesla | 1,054,666,440,000 | 2021-12-31 |
| META | Meta Platforms | 946,488,900,000 | 2021-12-31 |
| NVDA | NVIDIA | 735,250,000,000 | 2021-12-31 |
| TSM | TSMC | 623,936,814,508 | 2021-12-31 |
| TM | Toyota Motor | 562,881,338,711 | 2021-12-31 |
| UNH | UnitedHealth | 472,941,186,675 | 2021-12-31 |
| JPM | JPMorgan Chase | 471,455,455,000 | 2021-12-31 |
| V | Visa | 463,644,829,324 | 2021-12-31 |
| JNJ | Johnson & Johnson | 450,495,054,233 | 2021-12-31 |
| HD | Home Depot | 437,984,412,427 | 2021-12-31 |
| WMT | Walmart | 401,352,474,088 | 2021-12-31 |
| PG | P&G | 400,481,919,134 | 2021-12-31 |
| BAC | Bank of America | 365,996,985,000 | 2021-12-31 |
| MA | Mastercard | 358,215,216,043 | 2021-12-31 |
| PFE | Pfizer | 331,624,800,000 | 2021-12-31 |
| DIS | Disney | 281,536,729,786 | 2021-12-31 |
| AVGO | Broadcom | 273,889,478,035 | 2021-12-31 |
| ACN | Accenture | 272,251,353,921 | 2021-12-31 |
| ADBE | Adobe | 269,807,148,000 | 2021-12-31 |
| CSCO | Cisco | 267,277,925,060 | 2021-12-31 |
| NFLX | Netflix | 266,637,466,767 | 2021-12-31 |
| LLY | Eli Lilly | 264,229,013,580 | 2021-12-31 |
| NKE | Nike | 263,638,810,004 | 2021-12-31 |
| TMO | Thermo Fisher Scientific | 262,892,560,000 | 2021-12-31 |
| XOM | ExxonMobil | 260,940,048,082 | 2021-12-31 |
| KO | Coca-Cola | 255,668,780,000 | 2021-12-31 |
| COST | Costco | 250,823,377,505 | 2021-12-31 |
| ABT | Abbott Labs | 248,868,708,017 | 2021-12-31 |
| PEP | PepsiCo | 240,067,220,000 | 2021-12-31 |
| ABBV | AbbVie | 239,371,014,961 | 2021-12-31 |
| ORCL | Oracle | 238,796,590,590 | 2021-12-31 |
| DHR | Danaher | 235,275,051,000 | 2021-12-31 |
| CRM | Salesforce | 234,053,730,000 | 2021-12-31 |
| CMCSA | Comcast | 230,914,040,000 | 2021-12-31 |
| CVX | Chevron | 224,776,884,000 | 2021-12-31 |
| PYPL | PayPal | 221,392,920,000 | 2021-12-31 |
| VZ | Verizon | 216,517,320,000 | 2021-12-31 |
| INTC | Intel | 209,450,500,000 | 2021-12-31 |
| QCOM | Qualcomm | 206,460,230,000 | 2021-12-31 |
| MCD | McDonald's | 200,314,081,616 | 2021-12-31 |
| WFC | Wells Fargo | 194,621,274,000 | 2021-12-31 |
| MRK | Merck | 193,899,200,000 | 2021-12-31 |
| UPS | UPS | 187,547,500,000 | 2021-12-31 |
| LOW | Lowe's | 178,980,001,711 | 2021-12-31 |
| LIN | Linde | 178,469,996,670 | 2021-12-31 |
| BHP | BHP Group | 178,061,360,794 | 2021-12-31 |
| INTU | Intuit | 175,658,190,571 | 2021-12-31 |
| AMD | AMD | 174,694,600,000 | 2021-12-31 |
| TXN | Texas Instruments | 173,957,810,000 | 2021-12-31 |
| MS | Morgan Stanley | 171,878,160,000 | 2021-12-31 |
| UNP | Union Pacific | 163,426,991,000 | 2021-12-31 |
| SCHW | Charles Schwab | 159,117,200,000 | 2021-12-31 |
| PM | Philip Morris | 147,981,841,050 | 2021-12-31 |
| TMUS | T-Mobile US | 144,890,600,890 | 2021-12-31 |
| HON | Honeywell | 143,997,006,000 | 2021-12-31 |
| AMAT | Applied Materials | 142,084,828,760 | 2021-12-31 |
| MDT | Medtronic | 139,026,887,421 | 2021-12-31 |
| BLK | BlackRock | 139,002,357,237 | 2021-12-31 |
| BMY | Bristol-Myers Squibb | 138,354,650,000 | 2021-12-31 |
| SBUX | Starbucks | 137,825,751,000 | 2021-12-31 |
| CVS | CVS Health | 136,274,360,000 | 2021-12-31 |
| EL | Estee Lauder | 134,086,440,000 | 2021-12-31 |
| T | AT&T | 133,256,287,693 | 2021-12-31 |
| AMT | American Tower | 133,153,020,000 | 2021-12-31 |
| GS | Goldman Sachs | 132,591,830,000 | 2021-12-31 |
| TTE | TotalEnergies | 130,595,634,612 | 2021-12-31 |
| DHI | D.R. Horton | 129,248,237,864 | 2021-12-31 |
| NOW | ServiceNow | 129,172,890,000 | 2021-12-31 |
| RTX | Raytheon | 128,272,430,000 | 2021-12-31 |
| ISRG | Intuitive Surgical | 128,198,239,641 | 2021-12-31 |
| AMGN | Amgen | 127,557,990,000 | 2021-12-31 |
| AXP | American Express | 125,644,800,000 | 2021-12-31 |
| PLD | Prologis | 124,491,950,040 | 2021-12-31 |
| SE | Sea Limited | 123,853,793,007 | 2021-12-31 |
| BUD | Anheuser-Busch InBev | 121,826,600,000 | 2021-12-31 |
| IBM | IBM | 119,905,994,777 | 2021-12-31 |
| C | Citigroup | 119,831,877,000 | 2021-12-31 |
| BA | Boeing | 118,496,952,000 | 2021-12-31 |
| CHTR | Charter Communications | 116,892,400,864 | 2021-12-31 |
| ZTS | Zoetis | 115,670,220,000 | 2021-12-31 |
| SPGI | S&P Global | 113,687,937,000 | 2021-12-31 |
| TGT | Target | 112,951,758,426 | 2021-12-31 |
| ELV | Elevance Health | 112,507,960,913 | 2021-12-31 |
| CAT | Caterpillar | 111,370,838,000 | 2021-12-31 |
| JD | JD.com | 108,983,864,990 | 2021-12-31 |
| INFY | Infosys | 107,837,326,012 | 2021-12-31 |
| DE | Deere & Co. | 106,961,823,926 | 2021-12-31 |
| MU | Micron | 104,199,801,195 | 2021-12-31 |
| ADP | ADP | 103,908,812,000 | 2021-12-31 |
| GE | General Electric | 103,828,875,604 | 2021-12-31 |
| ABNB | Airbnb | 103,392,287,880 | 2021-12-31 |
| MMM | 3M | 102,954,348,000 | 2021-12-31 |
| MRNA | Moderna | 102,607,920,000 | 2021-12-31 |
| SNOW | Snowflake | 101,929,875,000 | 2021-12-31 |
| LRCX | Lam Research | 101,262,422,882 | 2021-12-31 |
| SYK | Stryker | 100,844,082,000 | 2021-12-31 |
Summary:
The table displays the top 100 publicly traded companies by market capitalization as of December 31, 2021. Apple (AAPL) held the top position with a market cap of nearly $3 trillion, followed by Microsoft (MSFT) and Alphabet (GOOG). The list includes companies from various sectors, including technology, finance, healthcare, consumer goods, and energy, reflecting the diverse nature of the global economy.
Interesting Observations:
- Tech Dominance: Technology companies occupy many of the top spots, highlighting the increasing importance of the tech sector in the global economy.
- Diverse Sectors: While tech is prominent, the list includes major players from other sectors, indicating a balance of economic activity.
- Global Representation: While most companies are US-based, there are also international companies like TSMC (TSM) and Toyota Motor (TM), showcasing global economic integration.
Pros:
- Provides a snapshot of the largest companies at a specific point in time.
- Useful for understanding market trends and sector dominance.
Cons:
- Only reflects a single point in time and doesn't account for market fluctuations.
- Doesn't provide insights into financial health or future growth potential.
Disclaimers:
- This analysis is based solely on the provided data and does not constitute financial advice.
- Market conditions can change rapidly, and past performance is not indicative of future results.
- Always conduct thorough research and consult with a qualified financial advisor before making any investment decisions. I am an AI and cannot provide financial advice.
- Double-check all financial data and observations generated by AI. While I strive for accuracy, it's always best to verify information from reliable sources before making any financial decisions.
User
Of the 100, create a strategy that rebalances all of them every month, weighted by their market cap
Aurora
Description:
This portfolio implements a monthly rebalancing strategy for the top 100 stocks by market capitalization from 2021. The strategy will automatically adjust the allocation of each stock in proportion to its market capitalization, ensuring that larger companies receive a greater percentage of the portfolio's funds. By rebalancing monthly (every 30 days), the portfolio will maintain alignment with the current market cap weights of these companies, allowing it to adapt to changing market conditions and company valuations. The initial portfolio value is set at $10,000, which will be distributed across all 100 stocks according to their relative market capitalizations. This approach provides broad diversification across major companies while maintaining a weighting that reflects each company's relative size in the market.
JSON:
User
Now keeping all of the 100 assets, include a limit to the top 50 by market cap. Still rebalance every month.
User
Now keeping all of the 100 assets, include a limit to the top 25 by market cap. Still rebalance every month.
Aurora
Description:
This portfolio implements a monthly rebalancing strategy that focuses on the top 25 stocks by market capitalization from the original list of 100 largest companies from 2021. The strategy will automatically select and invest in the 25 largest companies by market cap, while still maintaining the full list of 100 stocks in the strategy definition to allow for dynamic selection based on current market conditions. By rebalancing monthly (every 30 days), the portfolio will adjust to changes in relative company sizes, ensuring that capital is always allocated to the current market leaders. The initial portfolio value is set at $10,000, which will be distributed across the selected stocks according to their relative market capitalizations. This approach provides exposure to the most significant companies in the market while maintaining a manageable level of diversification.
JSON:
User
Now keeping all of the 100 assets, include a limit to the top 10 by market cap. Still rebalance every month.
Aurora
Description:
This portfolio implements a monthly rebalancing strategy that focuses on the top 10 stocks by market capitalization from the original list of 100 largest companies. The strategy will automatically select and invest in the 10 largest companies by market cap, while still maintaining the full list of 100 stocks in the strategy definition to allow for dynamic selection based on current market conditions. By rebalancing monthly (every 30 days), the portfolio will adjust to changes in relative company sizes, ensuring that capital is always allocated to the current market leaders. The initial portfolio value is set at $10,000, which will be distributed across the selected stocks according to their relative market capitalizations. This approach provides concentrated exposure to the most significant companies in the market while maintaining the flexibility to adapt as market conditions change.
JSON:
User
Now keeping all of the 100 assets, include a limit to the top 5 by market cap. Still rebalance every month.
Aurora
Description:
This portfolio implements a monthly rebalancing strategy that focuses on the top 5 stocks by market capitalization from the original list of 100 largest companies. The strategy will automatically select and invest in the 5 largest companies by market cap, while still maintaining the full list of 100 stocks in the strategy definition to allow for dynamic selection based on current market conditions. By rebalancing monthly (every 30 days), the portfolio will adjust to changes in relative company sizes, ensuring that capital is always allocated to the current market leaders. The initial portfolio value is set at $10,000, which will be distributed across the selected stocks according to their relative market capitalizations. This approach provides concentrated exposure to the most significant companies in the market while maintaining the flexibility to adapt as market conditions change.
For transparency, the full list of stocks includes AAPL, MSFT, GOOG, AMZN, TSLA, META, NVDA, TSM, TM, UNH, JPM, V, JNJ, HD, WMT, PG, BAC, MA, PFE, DIS, AVGO, ACN, ADBE, CSCO, NFLX, LLY, NKE, TMO, XOM, KO, COST, ABT, PEP, ABBV, ORCL, DHR, CRM, CMCSA, CVX, PYPL, VZ, INTC, QCOM, MCD, WFC, MRK, UPS, LOW, LIN, BHP, INTU, AMD, TXN, MS, UNP, SCHW, PM, TMUS, HON, AMAT, MDT, BLK, BMY, SBUX, CVS, EL, T, AMT, GS, TTE, DHI, NOW, RTX, ISRG, AMGN, AXP, PLD, SE, BUD, IBM, C, BA, CHTR, ZTS, SPGI, TGT, ELV, CAT, JD, INFY, DE, MU, ADP, GE, ABNB, MMM, MRNA, SNOW, LRCX, and SYK.
JSON:
User
I'm going to summarize the results here.
- The best portfolio from 2021 onwards is the one that takes the top 25 by market cap
- For the ones that take more, the performance moves similar to the baseline
- For the ones that take less, it's a lot more volatile, with bigger drops and bigger gains
Aurora
Okay, here's a summary of the results:
- The portfolio focusing on the top 25 stocks by market cap from 2021 onwards demonstrated the best performance.
- Portfolios including more than 25 stocks performed similarly to the baseline.
- Portfolios with fewer than 25 stocks exhibited higher volatility, with larger gains and losses.