Infrastructure, Oil, Alt Energy ETFs: Get Ready for the Obama Effect

Several months ago, I put together a report called, "5 ETFs for Obama, 5 ETFs for McCain." I made a case for 5 ETFs that would ignite, depending on which candidate secured the presidency.

Barack Obama was the victor, of course. Yet the global financial crisis has remained an ongoing thorn in the bull's side.

By Friday, however, President-elect Obama gave us a glimpse of his economic team, substantially lifting equities. And on Monday (11/24/08), we received greater certainty about the Obama job creation plan.

Not surprisingly, many of the items that Obama mentioned the most on the campaign trail, as well as in the outline of the job creation plan (i.e., infrastructure and alt energy), outpaced the markets at large. Here's a rundown on how the 5 Obama ETFs performed over the last 2 trading days.

There's not a lot of genuine rationale behind the movement, beyond a bump in confidence. That said, the President-elect is going to get most of what he asks for from a Congress that is heavily in his corner.

And that means... when Obama says we are going to be rebuilding the nation's physical infrastructure in a greener, cleaner way, you can expect Powershares Clean Tech (PZD) to benefit. PZD is a "greener" take on infrastructure. “Cleantech" companies are those that derive the majority of their business from products or services that improve productivity or performance while reducing costs, resource consumption, pollution and toxicity.

It also means that, while Obama stresses the sensible creation of alt energy, he's aware that the country must also gain access to some traditional sources of non-renewables, including natural gas. And that means good things for the PowerShares Dynamic Energy Exloration Production Fund (PXE).

This energy ETF is geared to smaller companies, rather than "Big Oil." With very attractive P/B and P/E ratios, and probable stimulus for small businesses, PXE stands to benefit from both the search for offshore oil as well as the acquisition of natural gas, an alt energy favorite.

Disclosure Statement: ETF Expert is a web log ("blog") that makes the world of ETFs easier to understand. Pacific Park Financial, Inc., a Registered Investment Advisor with the SEC, may hold positions in the ETFs, mutual funds and/or index funds mentioned above. Investors who are interested in money management services may visit the Pacific Park Financial, Inc. web site.

Comments

[Prudent Man...:]

Hardly a good sample. I have some "dogs" that did better than those etfs because of short covering.

I note the author failed to state how they performed since he recommended them.

2008 Nov 25 08:45 AM

[PWH:]

PXE?????


"Smaller companies"???? Since when is Exxon Mobil, Conoco, Chevron, et al smaller companies?

2008 Nov 25 05:35 PM

[Alan Young:]

Your ETF picks gained 14% vs. the broad market 13%? Wow! All this alpha is making me dizzy.

2008 Dec 09 02:30 AM