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  • Five ETFs For The Republican Tidal Wave 0 comments
    Nov 4, 2010 11:54 AM | about stocks: OIH, KOL, XLV, VIG, SDY, PPA, VYM

    By Jason Raznick

    Alright, there are three Senate races still in doubt, but we knew heading into today the upper house would remain in the hands of the Democrats, but the House went to Republicans in a big way and the GOP made some nice gains in governors races.

    Putting together a list of several ETFs that could be winners over the next few months on the back of these election results leads us to some very predictable suspects.

    With that, here are five ETFs that look poised to be winners thanks to Republican tidal wave of 2010.

    1) Oil Services HOLDRs (NYSEARCA:OIH):
    The entire oil patch had to be cheering as the election returns were coming in last night. Both houses of Congress and the White House in Democratic control is not good news for oil stocks, but that grip has been loosened a bit.

    As oil services stocks are more volatile and more sensitive to oil prices, OIH is an excellent, albeit risky, way to benefit from a Republican majority in the House.

    2) Market Vectors Coal ETF (NYSEARCA:KOL):
    Republicans picked up senate seats in Illinois and Pennsylvania and the new Democrat senator from West Virginia is no California/New York Democrat, so the thesis here is that KOL constituents will benefit from a more favorable regulatory environment.

    3) Health Care Select Sector SPDR (NYSEARCA:XLV):
    Reforming or completely throwing out ObamaCare is going to be a top priority for House Republicans. Don't bet on all-out destruction of healthcare reform, but XLV could see a short-term pop on the election results.

    4) PowerShares Aerospace & Defense (NYSEARCA:PPA):
    Even defense spending is not safe from cuts, but Republicans aren't going to run to pare spending here. PPA might be a winner under a "less bad" scenario, which is what the defense sector got last night.

    5) Any dividend ETF:
    Yes, this means our list is longer than five ETFs, but it's obvious the Republicans will fight to extend the Bush tax cuts and that's good news for dividend stocks. The Vanguard Dividend Appreciation ETF (NYSEARCA:VIG), the SPDR S&P Dividend ETF (NYSEARCA:SDY) and the Vanguard High Dividend Yield Index ETF (NYSEARCA:VYM) look like compelling plays.

    Disclosure: No position



    Disclosure: No position
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