ETFs
ETFs to watch as Biden performs better in key states
Despite calls for his withdrawal after his debate performance, a recent poll shows President Joe Biden gaining ground in seven key states.
The Bloomberg News/Morning Consult poll found Republican Donald Trump leading Democrat Biden by just 2 percentage points, 47% to 45%, in the battleground states needed to win the November election. That’s the smallest margin since the poll began last October.
Biden currently leads Trump in Michigan and Wisconsin. In Arizona, Georgia, Nevada and North Carolina, Biden’s position is within the poll’s margin of error. However, he faces his biggest deficit in the crucial state of Pennsylvania.
If Biden wins the November presidential election, his policies and their economic impact could impact several key investment areas.
Focus on ETF strategies
Here are some ETF investing strategies that could be considered if Biden wins again.
Focus on infrastructure-related actions
Biden favors infrastructure expansion. Investors may want to consider stocks of companies that provide products and services for building roads, bridges, and other infrastructure projects. iShares U.S. Infrastructure Exchange Traded Fund (ETF) IFRA and Invesco Dynamic Building & Construction ETF PKB should therefore be in the spotlight (read: Biden raises tariffs on some Chinese imports: ETFs will be impacted).
Bet on renewable energy sector stocks
Biden made it clear from his first term that he would prioritize combating climate change. He has set ambitious goals for the country to reach net-zero emissions by 2050. Investors can look to renewable energy stocks, such as solar, wind and hydroelectric, to benefit from the clean energy transition.
Companies involved in clean energy, electric vehicles and green infrastructure stand to benefit from Biden’s push for a greener economy. That could benefit ETFs like Invesco Solar ETF TAN and iShares Global Clean Energy Exchange Traded Fund CILN.
Will Cannabis Stocks Stay High?
President Biden supports the gradual legalization of marijuana. Cannabis stocks benefited last year from the reintroduction of the Secure and Fair Enforcement (SAFE) Banking Act. Biden has demonstrated his commitment to marijuana reform by advocating that no one should be imprisoned for using or possessing the substance.
The Justice Department has recommended that cannabis be reclassified as a Schedule III drug, which indicates a moderate to low risk of physical and psychological dependence. Cannabis companies would benefit from this because they would no longer be subject to Section 280E of the U.S. federal tax code, which is one of the most notable benefits. AdvisorShares Pure US Cannabis Exchange Traded Fund (ETF) (MSOS) and ETFMG Alternative ETF for Harvest (MJ) could be potential winners.
The story continues
Consider Defense and Aerospace Stocks
Biden has also pledged to continue investing in national defense and technology. Investors may want to consider defense and aerospace stocks that stand to benefit from the administration’s focus on improving the country’s national security and technological capabilities. This makes aerospace and defense ETFs a good fit for iShares US Aerospace and Defense ETF ITA and Invesco Aerospace & Defense ETF PPA in the spotlight.
Bet on American industrial companies
The Biden administration this year announced a significant increase in tariffs on $18 billion worth of Chinese imports to protect American industries from unfair competition. The new tariffs affect a wide range of products, with major impacts on sectors such as electric vehicles, solar energy and steel.
The Biden administration has pointed to overproduction and the potential flooding of the market by Chinese manufacturers as the main reasons for the tariff increases. The latest round of tariff increases is expected to boost U.S. manufacturing and benefit First Trust RBA American Industrial Renaissance ETF AIRR.
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Invesco Solar ETF (TAN): ETF Research Reports
Invesco Building & Construction ETF (PKB): ETF Research Reports
iShares Global Clean Energy ETF (ICLN): ETF Research Reports
iShares US Aerospace & Defense ETF (ITA): ETF Research Reports
Invesco Aerospace & Defense ETF (PPA): ETF Research Reports
First Trust American Industrial Renaissance RBA ETF (AIRR): ETF Research Reports
iShares US Infrastructure ETF (IFRA): ETF Research Reports