Back to top

Trump or Clinton: These ETFs to Face Same Fate

Read MoreHide Full Article
As we draw closer to the November election, speculation is getting louder in Wall Street. Analysts are busy analyzing the sectors that would benefit if the democrats win or if the republicans come to power (read: Trump, Clinton Race Ahead: ETFs in Contest).

Hypothetical match-ups between the candidates in lead, with emphasis on a Clinton versus Trump contest, are rampant. In the latest poll, the Democrat presidential front-runner Clinton’s edge over likely Republican presidential hopeful Trump shrunk from 5 points last week to 3 points this week.

Though it is too early to comment on who will finally make it to the White House, we can say for sure that the below-mentioned investing areas and their related ETFs will face the same fate no matter who wins in November.

Sector ETFs

As per the chief market strategist at Convergex, these sectors are likely to continue gaining or losing irrespective of Democrats or the Republicans win, going by a Financial Times article.


Clinton: Hillary Clinton proposed a $275 billion infrastructure plan over the next five years in a bid to create new jobs.

Trump: Donald Trump is also in favor of beefing up public spending by hundreds of billions of dollars, in spite of the fact that Republicans intend to check government spending.

Beneficiary: Whoever wins, infrastructure and utilities ETFs should get a boost. Utilities ETFs like First Trust Utilities AlphaDEX Fund (FXU) and PowerShares S&P SmallCap Utilities Portfolio ETF (PSCU) are likely to benefit from this trend. Guggenheim S&P High Income Infrastructure ETF (GHII), which invests about 50% of its assets in the U.S., may also get a nudge.


Clinton: Clinton has been seen as a supporter of ‘a strong U.S. military’.
Trump: He appears aggressive in foreign policy framing from his ‘America first’ speech. He stressed on the need for additional investments in missile defense in Europe and charged the Obama administration for moderate support for Israel.

Beneficiary: So, defense and aerospace ETFs including iShares US Aerospace & Defense (ITA), SPDR S&P Aerospace & Defense ETF (XAR) and PowerShares Aerospace & Defense ETF (PPA) should get a lift (read: Upbeat Aerospace & Defense Results Lift ETFs).


Clinton: Hillary Clinton’s tweet raised concerns over the pricing on life-saving drugs in September. Questions over biotech pricing came on the heels of a 5,455% price hike (in about two months) of a drug called Daraprim, used to treat malaria and toxoplasmosis. This gigantic leap in pricing action was taken by a privately held biotech company Turing Pharmaceuticals. Since then, pharma and health care stocks have been under pressure barring occasional jumps (read: How Hillary Clinton Crushed Biotech ETFs with One Tweet).

Trump: He is a believer of the fact that medicare could save as much as $300 billion annually through negotiation with drugmakers. Trump has intended to cancel the Obamacare program.

Loser: The above-said comments and tweets may put pharma and health care ETFs on pins and needles. PowerShares Dynamic Pharmaceuticals Portfolio ETF (PJP) and Health Care Select Sector SPDR Fund (XLV) are some of the ETFs that may face trouble.


Clinton: She is expected to embark on new regulations on fracking, the key cause of the U.S. energy sector boom. Clinton proclaimed that she would not back fracking in states or local communities that don’t want it because of pollution issues.

Trump: He vows to make Mexico pay for a wall along the border as a part of his immigration plan. If this concept of Trump Wall turns into a reality, it might hamper booming U.S. exports of its natural gas surpluses to Mexico.

Loser: ETFs like VanEck Vectors Unconventional Oil & Gas ETF (FRAK), First Trust ISE-Revere Natural Gas Index Fund (FCG) and SPDR S&P Oil & Gas Exploration & Production ETF (XOP) may come under pressure.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

More from Zacks ETF News And Commentary

You May Like