U.S. President-elect Joe Biden's key campaign promises take center stage when investors consider how to adjust their portfolios to take advantage of the next administration's policies.
During the presidential debates and in written plans during his campaign, Biden highlighted several areas that would be the cornerstone of his presidency. Two areas in particular could benefit from the Biden administration:
Against this backdrop, here are two exchange-traded funds (ETFs) targeting the domains that will benefit:
iShares US Infrastructure ETF
Current price: $ 26.42
52 Week Range: $ 16.69 – $ 29.03
Yield: 1.03%
Expense Ratio: 0.40%
The President-elect's plans to increase spending on building roads, bridges, tunnels, and other infrastructure projects are likely to benefit businesses in the space. We can divide businesses into owners – railways and utilities, and enablers – and operators, including materials and construction companies.
When analyzing individual infrastructure stocks, the strength of their assets, the quality of management, and the level of valuation are all important factors. A company's growth prospects in terms of revenue and cash flow, market position and regulatory issues should also be considered.
The iShares U.S. Infrastructure ETF (NYSE 🙂 provides access to US-based companies likely to benefit from increased infrastructure activity. The fund started trading in April 2018.
IFRA, which has 134 interests, follows the NYSE FactSet U.S. Infrastructure Index. The top ten companies have a weight of 9%, so no company can significantly influence the price of ETFs itself.
Chemicals Manufacturer Olin (NYSE 🙂 Global Engineering Company Fluorine (NYSE 🙂 Equipment and Component Manufacturer Dover (NYSE :), Diversified Power Management Chesapeake Utilities (NYSE 🙂 Construction Equipment Manufacturer Terex (NYSE 🙂 and Distributor of Pool and Irrigation Products Pool (NASDAQ 🙂 are the leading names in the fund.
Since the beginning of the year, IFRA has fallen by about 8%. The underlying P / E and P / B ratios are 17.01 and 1.70, respectively. Investors in infrastructure stocks typically look for passive income and capital appreciation. The fund's lagging dividend yield is 2.25%.
SPDR S&P Kensho Smart Mobility
Current Price: $ 43.47
52 Week Range: $ 15.7 – 44.19
Yield: 1.16%
Expense Ratio: 0.45%
In addition to utility companies, renewable energy and electric vehicle (EV) companies also benefit from Biden's administration.
Volkswagen (OTC 🙂 CEO Herbert Diess recently said that a Biden administration would be better for the group's efforts to increase sales of electric cars worldwide.
SPDR S&P Kensho Smart Mobility (NYSE 🙂 is an investment in the evolution of consumer and commercial transportation. EV and drone technology are the main features of this fund.
HAIL, which has 56 interests, started trading in 2017. The top ten companies make up about 40% of the ETF. China-based EV group NIO (NYSE 🙂 makes up 11.05% of the fund and is up 935% in 2020. Top US companies include manufacturer Plug Power (NASDAQ 🙂 EV Heavyweight Tesla (NASDAQ 🙂 Electric Van Company Workhorse (NASDAQ 🙂 and automotive component supplier BorgWarner (NYSE :).
Car manufacturers make up 25.76% of HAIL, followed by auto parts and equipment (20.25%) and semiconductors (11.70%). Year-to-date, the fund is up 44%, hitting a record high of $ 43.97 on Nov. 6. The lagging P / E and P / B ratios are 25.21 and 2.51. Investors can view any upcoming profit taking in the ETF as an opportunity to buy.
Other ETF market participants might investigate, among others:
First Trust NASDAQ Clean Edge Green Energy Index Fund (NASDAQ 🙂
First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index (NASDAQ 🙂
Global Clean Energy ETF (NYSE 🙂 (NASDAQ 🙂
Global X Autonomous and Electric Vehicle ETF (NASDAQ 🙂
Global X U.S. Infrastructure Development ETF (NYSE 🙂
Invesco Solar ETF (NYSE 🙂
Invesco WilderHill Clean Energy ETF (NYSE 🙂
iShares Self-Driving EV and Tech ETF (NYSE 🙂
SPDR S&P Global (NYSE 🙂 Infrastructure ETF (NYSE 🙂
SPDR S&P Kensho Clean Power ETF (NYSE 🙂
