Infrastructure and clean energy ETFs have been the early beneficiaries of a Joe Biden presidency thus far this year. An infrastructure package that will incorporate climate change initiatives can especially help this pair of iShares ETFs.
“President Joe Biden this week is set to unveil details of a major infrastructure package that’s expected to include record spending on mitigating climate change and accelerating a nationwide transition to clean energy,” a CNBC article reported. “The president is expected to introduce up to $3 trillion in spending on efforts to boost the economy, including rebuilding aging infrastructure like highways, bridges and rail lines, and investing in technologies to reduce planet-warming greenhouse gas emissions,” the report added.
“The president is expected to introduce up to $3 trillion in spending on efforts to boost the economy, including rebuilding aging infrastructure like highways, bridges and rail lines, and investing in technologies to reduce planet-warming greenhouse gas emissions,” the report added.
A Pair of ETFs to Watch
A bolstering of infrastructure spending can certainly help the case of the iShares U.S. Infrastructure ETF (IFRA). The fund seeks to track the investment results of the NYSE® FactSet U.S. Infrastructure Index, an index composed of equities of U.S. companies that have infrastructure exposure.
With its 0.40% expense ratio, the fund generally will invest at least 90% of its assets in the component securities of the underlying index. The index is designed to measure the performance of equity securities of U.S. companies involved in U.S. focused infrastructure activities.
Overall, IFRA offers investors:
- Exposure to U.S. infrastructure companies that could benefit from a potential increase in domestic infrastructure activities.
- Access to two groups of infrastructure companies that are equally weighted: owners and operators, such as railroads and utilities, and enablers, such as materials and construction companies.
- Use to express a thematic view on U.S. infrastructure stocks.
- Strong performance, with the fund up almost 70% the past year.
Addressing climate change will also further the case of the iShares Global Clean Energy ETF (ICLN), which is up 45% the past six months.
With its 0.46% expense ratio, the fund seeks to track the S&P Global Clean Energy Index, which is designed to track the performance of approximately 30 clean energy-related companies. Overall, ICLN gives investors access to:
- Exposure to companies that produce energy from solar, wind, and other renewable sources.
- Targeted access to clean energy stocks from around the world.
- Use to express a global sector view.
- Strong performance, with the fund up close to 150% within the past year.
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