The great divergence among large-cap stocks

Large cap stocks underperformed last year, with the ASX 20 falling by more than 13%, while the broader ASX 200 fell just 5.6%, and the Small Ordinaries gained more than 8.5%. However, the divergence in performance isn’t just among different market capitalisations, even amongst the largest stocks there’s been a huge different between holding the best performers and the worst performers. Within the ASX 20 Index, the top five stocks (SCG, TCL, CSL, WFD, & BXB) produced an average total return of 28.6%, while the bottom five (BHP, QBE, ANZ, WOW, & WPL) produced an average total loss of 20.4%. It’s interesting to note that the top five are all ‘defensive’ companies with reliable earnings, while the bottom five (excluding Woolworths, which has faced company-specific issues) are all cyclical companies in either finance or resources. (Image credit: Livewire, FactSet)