iQ US MEGA CAP 10 MODEL
See historical selections here
Focused U.S. mega-cap leaders
Rules-based multi-factor discipline
Equal-weighted 10-stock portfolio
More balanced sector diversification
Seasonal, off-cycle rebalancing
Higher historical return, lower Ulcer Index*
*Past performance does not guarantee future returns.
INVESTMENT OBJECTIVE
The iQUANT U.S. Mega Cap 10 Model is built to pursue long-term growth by selecting a handpicked group of America’s biggest and most financially strong companies. The goal? To outperform traditional index funds that track large-cap stocks—but with more discipline and less downside. Over time, the model has shown smaller drawdowns, higher risk-adjusted returns, and a lower Ulcer Index than the S&P 500, meaning it aims to grow your wealth without the rollercoaster ride.
PROCESS
The iQUANT U.S. Mega Cap 10 Model uses a fully rules-based screen-of-screens process:
It all starts with the top 90 U.S. companies by market cap—the biggest, most established names traded on U.S. exchanges.
From there, the model looks for financial strength, picking companies with solid balance sheets and steady earnings. Then it digs deeper to find those that are efficient with cash flow—turning business activity into real profits.
Next, it screens for stability and quality, avoiding stocks with wild price swings or weak sales, and favoring companies with strong, long-term investor support.
Finally, it looks at profitability and pricing power—choosing businesses with strong profit margins that can weather different market conditions.
After all that, each company gets a score. The top 10 names rise to the top, equally weighted to keep things balanced.
The model is rebalanced February, May, August, and November—one month off from typical quarter-end dates. This helps avoid market noise, index reshuffles, and window dressing, so changes are driven by fundamentals and Earnings Quality, not the calendar.
Why invest in a focused U.S. mega-cap model?
1. Own the real backbone of U.S. equity markets—on purpose, not by default.
Mega-cap companies help power the U.S. economy. Most investors own them through a basic index fund or ETF—and leave it at that. This model starts with the same group of well-known names, but it takes things a step further. It only includes companies that show real financial strength, efficient earnings, and resilient profit margins. In other words, it's not just about owning the biggest companies—it's about owning the strongest ones.
2. Address the concentration problem instead of ignoring it.
The S&P 500 is top-heavy, but the iQUANT U.S. Mega Cap 10 Model takes a smarter approach. It holds 10 equal-weighted stocks chosen for quality, earnings strength, and pricing power—not just size. The result? Stronger returns, less stress during market drops, and a smoother ride than the typical index.
3. Pair rules, risk, and differentiation.
Advisors need to stand out while still putting clients first. This rules-based mega-cap model helps do both. It removes emotion from the process—no guessing, no headlines, no gut calls—just 10 carefully chosen stocks, backed by data. For broader diversification, it can be paired with other strategies that don’t move in lockstep.
Bottom line: you’re still investing in the core of America’s corporate strength—but now, with discipline and clarity.
Investing in U.S. mega-cap stocks involves equity market risk, including the possible loss of principal. Mega caps can be highly concentrated in a small number of companies and sectors, so setbacks in a few dominant names or industries may materially impact results. These stocks may also trade at higher valuations and be sensitive to global, regulatory, and technology shocks. Past performance of mega-cap stocks or any strategy investing in them does not guarantee future results.