Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

2 ETFs Likely To Win Whether There's A Biden Or Trump Presidency

By Investing.com (Tezcan Gecgil/Investing.com )ETFsNov 02, 2020 09:41AM ET
www.investing.com/analysis/2-etfs-likely-to-win-under-a-biden-or-trump-presidency-200543139
2 ETFs Likely To Win Whether There's A Biden Or Trump Presidency
By Investing.com (Tezcan Gecgil/Investing.com )   |  Nov 02, 2020 09:41AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

With less than 24 hours until the U.S. Presidential election begins, anticipation about the results, and the impact on the economy are in full focus.

Last week's runup in volatility in U.S. equities is only adding to the anticipation. The uncertainty surrounding the election, as well as questions regarding the global economic recovery given the upswing in COVID cases, are key factors in the rise of volatility.

Seasoned investors realize election volatility is mostly short-term noise whereas well-managed companies that produce stable revenue are likely to do well regardless of party politics.

Research released in 2018 by the Board of Governors of the Federal Reserve System examined why the S&P 500 index moved higher from the November 2016 presidential election through the end of 2017.

Economics professors Olivier Blanchard and Robert M. Solow, who led the study, agreed more clarity about economic policy helped boost the markets, explaining:

"A bit more than half of the increase in the aggregate U.S. stock prices from the presidential election to the end of 2017 can be attributed to higher actual and expected dividends. A general improvement in economic activity and a decrease in economic policy uncertainty around the world—contrary to what was forecast before the U.S. election—were the main factors behind the stock market increase."

With this in mind, here is an ETF on track to benefit over the long-term no matter the election results:

SPDR S&P Internet ETF

  • Current Price: $116.86
  • 52-Week Range: $53.49 - $131.56
  • Dividend Yield: 1.15%
  • Expense Ratio: 0.35%

The SPDR® S&P Internet ETF (NYSE:XWEB) provides exposure to businesses that operate in internet services, infrastructure, e-commerce and interactive media. The fund started trading in 2016 and has close to $48 million under management.

XWEB Weekly
XWEB Weekly

XWEB, which has 46 holdings, tracks the S&P Internet Select Industry Index. As no firm has a weighting over 4%, no single stock can affect the fund's priceon its own. It is also not dominated by titans such as Alphabet (NASDAQ:GOOGL), (NASDAQ:GOOG), Amazon (NASDAQ:AMZN) or Facebook (NASDAQ:FB).

Several of the top names in the fund include the image sharing and social media platform Pinterest (NYSE:PINS), which recently announced robust Q3 results as revenue climbed 58% year-over-year to $443 million, multimedia messaging app Snap (NYSE:SNAP) whose Q3 revenue also increased 52% to $679 million, sell-side advertising firm Magnite (NASDAQ:MGNI), online personal styling service Stitch Fix (NASDAQ:SFIX) and e-commerce auto parts provider Carparts.com (NASDAQ:PRTS).

Since the start of the year, XWEB is up over 43%. It hit an all-time high of $131.56 Oct. 14. Understandably, the stay-at-home, work-from-home trend has provided tailwinds for many internet businesses.

As a result of the recent run-up in price, its valuation is extended. Trailing P/E and P/B ratios stand at 37.69 and 5.01. Those investors who track short-term technical charts should be aware that various indicators urge caution. In the coming weeks, a fall toward the $110 level or even below looks likely, providing long-term investors an opportunity to buy the fund.

Bottom Line

Many are understandably nervous about the effects of tomorrow's election on their investment portfolio. However, it is unlikely to have a lasting impact on the operations of robust companies or secular market trends, so those with a diversified portfolio shouldn't be concerned.

Another ETF to consider for the long-run could be the Invesco S&P 500 Equal Weight Consumer Staples ETF (NYSE:RHS), which gives access to consumer staples companies. The sector is typically regarded as a defensive play in volatile times. RHS has 32 holdings. It has been trading since 2006.

The top names in the fund include Costco Wholesale (NASDAQ:COST), Colgate-Palmolive (NYSE:CL), Campbell Soup (NYSE:CPB), Estee Lauder (NYSE:EL), Conagra Brands (NYSE:CAG), and Walmart (NYSE:WMT).

In addition to robust U.S. operations, most companies in the fund also have significant exposure to overseas markets. The second wave of the pandemic is leading to another round of lockdowns across the globe. Amid such uncertainty, consumer staples companies are expected to perform well. The current dividend yield of 2.2% could also appeal to those in search of passive income.

2 ETFs Likely To Win Whether There's A Biden Or Trump Presidency
 

Related Articles

2 ETFs Likely To Win Whether There's A Biden Or Trump Presidency

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Salami taiwo hassan
Salami taiwo hassan Nov 04, 2020 4:12PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
how are you doing
Emanuel Dabah
Emanuel Dabah Nov 03, 2020 3:52AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Bought will continue print Money by gold and wait 2-4 years
TL Chan
TL Chan Nov 03, 2020 12:54AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Yes, how can the corruption rotten so deep so long to the system, from Clinton, Hillary, Biden to Obama. Even US so lucky to get someone outside the system, Trump, he has been attacked by corrupted media non-stop, he is up against such giant corruption Cartel. The problem of the bipartisan system is that it take too long for self correction ! Need to improve the system ! Bipartisan is ok, it can be efficient, but somethings wrong here, why so many people in the system are corrupted by CCP for so long and so deep in the fabric and the bone marrow!
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email