Donald Trump vs Kamala Harris: ETFs to Watch

Donald Trump presidential victory

Should Donald Trump secure a presidential victory, his administration would likely double down on protectionism—a theme characterized by his penchant for tariffs and a strong push for domestic industries such as energy, defense, and manufacturing.

Trump's straightforward "drill, baby, drill" approach aims to bolster America's position as a formidable contender to the OPEC cartel. A direct beneficiary of this policy would be the Energy Select Sector SPDR Fund

, which tracks 22 energy stocks contained in the S&P 500, predominantly led by giants like Exxon and Chevron.

For a more focused play, particularly in the midstream sector such as oil and natural gas pipelines, an unorthodox choice would be the Pacer American Energy Independence ETF

, which invests in U.S. and Canadian MLPs and incorporated pipelines, offering a 3.4% 30-day SEC yield.

Trump's defense policy would not only capitalize on ongoing global conflicts but also benefit from long-term contracts held by major defense contractors such as Lockheed Martin and General Dynamics.

While we have discussed some major options in a previous edition of "Tony's ETF Buyer's Guide," another compelling pick is the Global X Defense Tech ETF

. This ETF is attractive because it is globally diversified and specifically excludes aerospace-heavy companies like Boeing, focusing instead on defense technology, cybersecurity, and intelligence providers.

Turning to manufacturing, while a sector fund might seem an obvious choice, there are nuances to consider. The Vanguard Industrials ETF

, for example, includes a broader range of industries such as railways, waste management, HR services, and trucking—extending beyond pure manufacturing.

A more thematic and focused approach could be the iShares U.S. Manufacturing ETF

, which tracks the S&P U.S. Manufacturing Select Index. This ETF includes a mix of conglomerates like Honeywell, automotive giants like General Motors and Ford, and heavy machinery producers like Deere, along with numerous aerospace and defense players.

Kamala Harris presidential victory

Should Kamala Harris win the presidency, her agenda would likely emphasize social reforms, but there are still notable implications for ETF investors, particularly in housing and clean energy sectors.

Harris has proposed providing first-time homebuyers with up to $25,000 to assist with down payments, with additional support for first-generation homeowners. While potentially inflationary, this policy could spur demand within the residential property market.

Key beneficiaries would likely include homebuilders like DR Horton, Lennar, PulteGroup, NVR, and Toll Brothers, as well as suppliers and retailers such as Home Depot, Lowe's, and Sherwin Williams.

Investors looking to capitalize on this could consider the iShares U.S. Home Construction ETF

, which has an expense ratio of 0.39% and includes 44 market cap-weighted companies within the Dow Jones U.S. Select Home Construction Index.

Alternatively, the SPDR S&P Homebuilders ETF

, which tracks the S&P Homebuilders Select Industry Index, offers a lower expense ratio of 0.35% and is equally weighted, providing greater exposure to mid and small-cap companies in the sector.

Another focus of Harris's platform is to foster a robust clean energy economy. This initiative aims to advance environmental justice, protect public lands, promote public health, and increase resilience to climate disasters.

For ETF investors, this emphasis on clean energy presents opportunities to invest in specific sectors like solar and wind, or more broadly in diversified clean energy themes.

While the iShares Global Clean Energy ETF

and the First Trust NASDAQ Clean Edge Green Energy Index Fund ETF

QCLN

+1.67%

are dominant players by AUM, a particularly intriguing option is the Invesco WilderHill Clean Energy ETF

PBW

+1.11%

.

This ETF tracks the WilderHill Clean Energy Index, which has the distinction of being one of the first of its kind since its inception in 2004. It covers 70 holdings and carries an expense ratio of 0.66%, diversely spread among companies in industrials, materials, technology, and consumer discretionary sectors.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.