Sector ETFs to Win/Lose If Biden Wins Elections
Zacks Investment Research | Sep 28, 2020 01:00AM ET
Apart from COVID-19, the presidential election is a pretty hot topic now, especially with the event just a few weeks away. Chances of Democrats taking over the House and Senate in November are rising. Per the asset management company DWS, there is a XHB . A low-rate environment is another boost for the housing stocks.
h3 Manufacturing & Infrastructure/h3While tax hike is a negative for Wall Street, Biden’s push for tax incentives will encourage domestic manufacturing. Biden proposed a $1.3-trillion infrastructure overhaul last year. The Democratic presidential candidate’s campaign aims to invest in restoring highways, roads and bridges, changing water pipes, building out rural broadband access, and updating schools among other works.
The proposals should boost ETFs like iShares U.S. Infrastructure ETF (IFRA) and Invesco Dynamic Building & Construction ETF (PKB) and First Trust RBA American Industrial Renaissance ETF as quoted on S&P Global (NYSE:SPGI) . This along with better relations with China will provide another tailwind to tech shares.
Amazon has a solid exposure to funds like Fidelity MSCI Consumer Discretionary Index ETF (FDIS) while tech funds like Technology Select Sector SPDR Fund per Goldman Sachs (NYSE:GS) . Banks also enjoyed easing of regulatory stringencies in recent years.
However, under Biden's plan of tax hike, the 10 largest U.S. banks may see their combined annual net income decline by more than $7 billion, XHS could lose ahead.
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