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How Midterms Could Impact Your ETF Portfolio

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  • (0:45) - Should Investors Chase The Market Rally?
  • (4:30) - What Impact Will The Mid-term Elections Have On The Stock Market?
  • (8:40) - Will The Energy Policies Open Up Investment Oppurtunites?
  • (13:35) - Can We Expect The Defense Spending To Increase After Elections?
  • (17:00) - Investing Around Tax Policies: RWR & SPYD
  • (23:30) - ETF Fund Flows: What Are The Current Investment Trends?
  •                 Podcast@Zacks.com

 

In this episode of ETF Spotlight, I speak with Matthew Bartolini, Head of SPDR Americas Research at State Street Global Advisors, about midterm elections and their likely impact on key policy issues.

Stocks have generally had positive returns in the year following midterm elections. Per WSJ, the S&P 500 index has risen in the one-year period following every midterm election since 1942.  Could this time be different?

Recent polls suggest that a split Congress is the most likely outcome, with Republicans winning the House and Democrats retaining the Senate. Stocks generally do well during periods of gridlock.

The SPDR S&P Kensho Clean Power ETF (CNRG - Free Report) , which provides a modified equal weighted exposure to firms associated with clean power generation, could benefit if Democrats retain control of Congress.

A Republican-controlled Congress could boost traditional energy ETFs like the Energy Select Sector SPDR ETF (XLE - Free Report) and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP - Free Report) . Exxon Mobil (XOM - Free Report) and Chevron (CVX - Free Report) are among the top holdings in these funds.

If Republicans win the House and Senate, large technology and semiconductor companies with substatial international exposure, like Apple (AAPL - Free Report) and NVIDIA (NVDA - Free Report) could benefit. Take a look at the SPDR S&P Semiconductor ETF (XSD - Free Report) and the SPDR NYSE Technology ETF (XNTK - Free Report) .

The SPDR Portfolio S&P 500 High Dividend ETF (SPYD - Free Report) is worth a look If Democrats retain control of Congress as companies may prioritize returning cash to investors via dividends.

Increasing defense spending is one of the few areas that the two parties agree on. Bipartisan support for further infrastructure spending is also likely.

Tune in to the podcast to learn more.

Make sure to be on the lookout for the next edition of ETF Spotlight! If you have any comments or questions, please email podcast@zacks.com.

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