Another stock index from Standard & Poor's for investors?
Not quite, but it is a passive portfolio, which S&P's equity research staff is promoting for its potentially outstanding performance, even against the redoubtable S&P 500 index.
The S&P PowerPicks portfolio contains only 26 stocks. It was chosen the first of the year and frozen, meaning no changes to, or trading of, the stocks until Dec. 31.
Last year, the PowerPicks portfolio had a 31.5% total return, including dividends, outpacing the S&P 500's return of 28.6%, noted Kenneth Shea, vice president and director of S&P equity research. "We went out and said our goal is to beat the S&P 500," Mr. Shea said.
But in 1997, its first year, the PowerPicks portfolio returned 21.2% compared with the S&P 500's 33.3%.
The PowerPicks holdings represent a favorite stock picked by each of S&P's 26 senior equity analysts. The equity research staff equally weights the 26 stocks in the portfolio, diversifying the stocks by industries and market capitalization.
The 1999 PowerPicks portfolio comprises 14 large-cap stocks with market caps exceeding $5 billion, seven midcap stocks with market caps between $1 billion and $4.9 billion, and five small-cap stocks with less than $1 billion in market cap.
Fifteen issues are growth stocks and 11 value stocks; 13 of the stocks are in the S&P 500.
The 26 stocks are: America Online, Apache, Applied Materials, Armco, AT&T, Biogen, Cablevision Systems, CIGNA, Cisco Systems, CMS Energy, Coca-Cola Enterprises, Continental Airlines, EMC, Federal Home Loan, Health Management Associates, Impath, Kroger, MBNA, Meritor Automotive, Roper Industries, Saks, Solutia, Tyco International, Univision Communications, Viacom and Zebra Technologies.