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With A Democrat In The White House, These ETFs Are Set To Charge Higher

By Investing.com (Tezcan Gecgil/Investing.com )ETFsNov 09, 2020 04:53AM ET
www.investing.com/analysis/bidens-victory-means-these-etfs-are-on-track-charge-higher-200543924
With A Democrat In The White House, These ETFs Are Set To Charge Higher
By Investing.com (Tezcan Gecgil/Investing.com )   |  Nov 09, 2020 04:53AM ET
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U.S. President-elect Joe Biden's key campaign promises are in focus as investors consider how to adjust their portfolios to gain from the next administration's policies.

During the presidential debates and in written plans throughout his campaign, Biden highlighted several areas that would be the cornerstone of his presidency. Two areas in particular stand to benefit from the Biden administration: infrastructure spending and clean energy.

Against this background, here are two exchange-traded funds (ETFs) focusing on those domains that stand to benefit:

iShares U.S. 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, will likely benefit firms in the space. We can divide companies into owners—railroads and utilities, and enablers—and operators, including materials and construction companies.

When analyzing individual infrastructure stocks, the strength of their assets, quality of management, and valuation levels 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:IFRA) provides access to U.S.-based firms likely to benefit from increased infrastructure activities. The fund started trading in April 2018.

IFRA Weekly
IFRA Weekly

IFRA, which has 134 holdings, tracks the NYSE FactSet U.S. Infrastructure Index. The top ten firms have a weighting of 9%, so no single company can significantly influence ETF's price by itself.

Chemical products manufacturer Olin (NYSE:OLN), global engineering firm Fluor (NYSE:FLR), equipment and components manufacturer Dover (NYSE:DOV), diversified energy operator Chesapeake Utilities (NYSE:CPK), construction equipment manufacturer Terex (NYSE:TEX) and pool and irrigation products distributor Pool (NASDAQ:POOL) are the leading names in the fund.

Since the start of the year, IFRA is down about 8%. Trailing 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 trailing dividend yield stands at 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 utilities, renewable energy and electric vehicle (EV) companies also stand to gain from the Biden administration.

Volkswagen (OTC:VWAPY) CEO Herbert Diess has recently said a Biden administration would be better for the group's efforts to increase EV sales globally.

SPDR S&P Kensho Smart Mobility (NYSE:HAIL) is an investment in the evolution of consumer and commercial transportation. EV as well as drone technology are the main features of this fund.

HAIL Weekly
HAIL Weekly

HAIL, which has 56 holdings, started trading in 2017. The top ten firms compose around 40% of the ETF. China-based EV group NIO (NYSE:NIO), makes up 11.05% of the fund and has surged by 935% in 2020. Top U.S. based companies include Hydrogen fuel cell system manufacturer Plug Power (NASDAQ:PLUG), EV heavyweight Tesla (NASDAQ:TSLA), electrically-powered delivery vehicle firm Workhorse (NASDAQ:WKHS), and automotive industry components supplier BorgWarner (NYSE:BWA).

Automobile Manufacturers make up 25.76% of HAIL, followed by Auto Parts & Equipment (20.25%), and Semiconductors (11.70%). Year-to-date, the fund is up by 44% and hit an all-time high of $43.97 on Nov. 6. Trailing P/E and P/B ratios are 25.21 and 2.51. Investors may regard any upcoming profit-taking in the ETF as an opportunity to buy.

Other ETFs market participants could research include:

  • First Trust NASDAQ Clean Edge Green Energy Index Fund (NASDAQ:QCLN)
  • First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index (NASDAQ:GRID)
  • Global Clean Energy ETF (NYSE:XLE) (NASDAQ:ICLN)
  • Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV)
  • Global X U.S. Infrastructure Development ETF (NYSE:PAVE)
  • Invesco Solar ETF (NYSE:TAN)
  • Invesco WilderHill Clean Energy ETF (NYSE:PBW)
  • iShares Self-Driving EV and Tech ETF (NYSE:IDRV)
  • SPDR S&P Global Infrastructure ETF (NYSE:GII)
  • SPDR S&P Kensho Clean Power ETF (NYSE:CNRG)
With A Democrat In The White House, These ETFs Are Set To Charge Higher
 

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With A Democrat In The White House, These ETFs Are Set To Charge Higher

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Comments (18)
Catholic Man
CatholicMan Feb 06, 2021 12:05PM ET
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LOL, obummer talked about infrastructure for 8 years, nothing was done and corrupt unions ended up with all the money.
Steve Buchanan
Steve Buchanan Feb 06, 2021 12:05PM ET
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it all came back to Dem oarty
andrew mccorkle
andrew mccorkle Feb 06, 2021 12:05PM ET
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m mon u ccx way ino n
Randolph Russ
Randolph Russ Nov 17, 2020 7:43PM ET
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Nope!
Matthew PM
Matthew PM Nov 13, 2020 1:49PM ET
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Joe Biden is not officially the president-elect. why is Tobias? Do you really want Wars and our jobs to be lost and don't you want medicine manufactured in the United States or locally?
Dion Argueta
Dion Argueta Nov 13, 2020 1:49PM ET
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Where were you when he got elected??? Under a rock??? Stop drinking Trumps cool aide, He may get ticked and throw a temper tantrum again. It's kinda obvious now he is our president. So please wake up !!!!
Jo Pa
Jo Pa Nov 11, 2020 10:38AM ET
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Chinese and Ukrainian stocks are going up.
TL Chan
TL Chan Nov 09, 2020 4:39PM ET
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TAN and CNLG dropped 2% and around 0.37% respectively!
CSG Share
CSG Share Nov 09, 2020 4:00PM ET
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stocks go up regardless of who's in office, stop making it look like Biden is a genius. The guy likely thinks he won his Senate seat back.
Demetry Millas
Demetry Millas Nov 09, 2020 4:00PM ET
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'Maybe' so, but they climbed highest when Trump took office.
STEPHEN HEBERT
STEPHEN HEBERT Nov 09, 2020 3:01PM ET
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When did Trump turn Democratic? I thought he was in the White House and no votes have been certified for this election.
William Riley
William Riley Nov 09, 2020 2:57PM ET
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Obama did that,all the money went to unions, and then was donated to Democrat campaigns
WILLIAM HAGERTY
WILLIAM HAGERTY Nov 09, 2020 1:43PM ET
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recounts in 5 states
WILLIAM HAGERTY
WILLIAM HAGERTY Nov 09, 2020 1:35PM ET
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this rally is a Trump win:)
Derrick Smart
Derrick Smart Nov 09, 2020 1:25PM ET
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Trump LOST folks need to wake up
Jose Mibaresh
Jose Mibaresh Nov 09, 2020 1:23PM ET
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Democrat in the WH?
Sherri Yohe
Sherri Yohe Nov 09, 2020 1:17PM ET
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Read the constitution and election laws! The election is far from over and neither the mainstream media, Joe Biden or you can declare the "president elect". But go forward, Ms Gecgil, and follow along like a good little lamb. baa! baa!
York Regent
York Regent Nov 09, 2020 1:09PM ET
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Climate cuange, clean energy, EV and infrastructure related businesses should excel under a Biden administration.
Jimmy Smith
Jimmy Smith Nov 09, 2020 1:09PM ET
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You forgot China.
Co Gonz
Co Gonz Nov 09, 2020 1:01PM ET
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the elections haven't been declared.. misinformation at it's finest.. doesn't anyone report real mews anymore
Notvery Goodathis
Peteymcletey Nov 09, 2020 10:35AM ET
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False unless democrats flip senate seats in January.
War Beagle
War Beagle Nov 09, 2020 10:35AM ET
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Democrats are good at sniffing out hidden ballots so its definitely possible.
Charles Russell
Charles Russell Nov 09, 2020 6:34AM ET
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ETF's holding a Pot Party alreadyTading at or near their all time highs..
Pa Ag
Pa Ag Nov 09, 2020 5:50AM ET
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MJ ? Up 40% in last 8 days.
 
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