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S&P Capital IQ names 2006 PowerPicks

FWR Staff

4 January 2006

Research firm reckons that, together, these 40 will beat its broad-market benchmark. Last week financial research firm Standard & Poor’s unveiled its PowerPicks model portfolio for 2006. The 40-stock portfolio, gleaned from the 1,500-plus stocks covered by Standard & Poor’s 65 U.S. equity analysts, is meant to exceed the total return – including capital appreciation and dividends paid – generated by the S&P 500 Index during the year.

The PowerPicks concept beat the S&P 500 in five of the eight years it has been around. Last year, for example, the PowerPicks portfolio saw a 9.7% return for the calendar year through 30 November, or roughly twice the S&P 500’s gains through the same period. From its inception in January 1997 through 30 November 2005, the PowerPicks model portfolio added 11.2% on an annualized basis versus a 7.7% increase for the S&P 500 in the same period.

This year’s PowerPicks emphasize large-cap stocks with 27 such stocks in the portfolio. That, says Stephen Biggar, head of Standard & Poor's Equity U.S. equity research, “reinforces the S&P equity research department's stance that large capitalization stocks are poised to resume a leadership position in 2006 following six years of under-performing” S&P’s mid- and small-cap indices.

Standard & Poor’s is a unit of McGaw-Hill, a New York-based publisher. –FWR