RBC's Top Picks for 2016

With both the Dow and S&P down around six percent already this year, investors worry if the plunge will be indicative of what we're going to see for all of 2016.

Despite the global slowdown, RBC released a report of its top picks this year which focused on three themes: Business transformation, cyclical opportunities and higher interest rates.

"Whether through merger and acquisition, productivity efforts, divestitures, and/or greater corporate transparency, we believe some management teams have taken their corporate fortunes into their own hands," Marc Harris, RBC's head of research told CNBC as part of their report.

RBC predicts companies positioned to do well in transformation include Avago Technologies, Google and Newell Rubbermaid.

The next theme is cyclical opportunities. "Despite the lackluster environment for economically-sensitive stocks, we see opportunities to invest in high-quality cyclical companies, where negative sentiment in their sectors has created an undue discount to their longer-term franchise value."

The companies that could benefit from such opportunities include Brookfield Asset Management, CBOE Holdings and Whirlpool.

Finally, the higher rates and a normalization of interest rate policies will benefit course businesses like PNC Financial Services and Toronto-Dominion Bank.