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ETFs to Win on Biden's Infrastructure Plan

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President Joe Biden presented a $2.3-trillion infrastructure plan on Mar 31 to restore about 20,000 miles of roads and 10,000 bridges along with rail lines and utilities over a span of eight years. He brought about the plan after Congress passed a nearly $2 trillion COVID-19 economic stimulus plan.

The plan also pledges to "spark the electric vehicle revolution" by building a network of 500,000 EV chargers by 2030, replacing 50,000 diesel transit vehicles and electrifying about 20% of the School buses

An increase in the corporate tax rate to 28% from 21% and measures designed to avert offshoring of profits will finance the spending, according to the White House, as quoted on CNBC. The President also made it clear that the tax burden on anyone making less than $400,000 per year will not be increased.

Below are the highlights of the plan, according to a CNBC article.

The proposal would:

  • Allocate $621 billion to transportation infrastructure such as bridges, roads, public transit, ports, airports and electric vehicle development
  • Direct $400 billion to care for elderly and disabled Americans
  • Allot about $300 billion to improving drinking-water infrastructure, expanding broadband access and upgrading electric grids
  • Allocate more than $300 billion into building and retrofitting affordable housing along with constructing and upgrading schools
  • Invest about $580 billion in American manufacturing, research and development and job training efforts

ETF Picks

iShares U.S. Infrastructure ETF (IFRA - Free Report)

The fund offers exposure to U.S. infrastructure companies that could benefit from a potential increase in domestic infrastructure activities. No stock accounts for more than 0.88% of the fund. The fund charges 40 bps in fees.

Invesco Dynamic Building & Construction ETF (PKB - Free Report)

The underlying Dynamic Building & Construction Intellidex Index comprises stocks of U.S. building and construction companies. The fund charges 59 bps in fees.

ProShares DJ Brookfield Global Infrastructure ETF (TOLZ - Free Report)

The fund offers access to an asset class with growing global demand, increasing opportunities for private investment, and high barriers to entry that limit competition. The United States accounts for about 50% of the fund. It charges 47 bps in fees.

Global X Autonomous & Electric Vehicles ETF (DRIV - Free Report)

The underlying Solactive Autonomous & Electric Vehicles Index tracks the price movements in shares of companies, which are active in the electric vehicles and autonomous driving segments. The United States takes the top spot in the fund with about 60% exposure. (read: Guide to Electric Vehicle ETFs).

SPDR S&P Kensho Smart Mobility ETF (HAIL - Free Report)

The underlying S&P Kensho Smart Transportation Index is comprised of U.S.-listed equity securities of companies domiciled across developed and emerging markets worldwide, which are included in the Smart Transportation sector. The fund charges 45 bps in fees.

Vanguard Communication Services ETF (VOX - Free Report)

The underlying MSCI US Investable Market Communication Services 25/50 Index is designed to capture the large, mid and small cap segments of the U.S. equity universe. The fund charges 10 bps in fees (read: Can Telecom ETFs Gain Despite Mixed Q4 Earnings?).

Invesco Water Resources ETF (PHO - Free Report)

The underlying NASDAQ OMX US Water Index tracks the performance of U.S. exchange-listed companies that create products designed to conserve and purify water for homes, businesses and industries. The fund charges 60 bps in fees.

First Trust RBA American Industrial Renaissance ETF (AIRR - Free Report)

The underlying Richard Bernstein Advisors American Industrial Renaissance Index measures the performance of small and mid-cap US companies in the industrial and community banking sectors. The fund charges 70 bps in fees.

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