This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Funds That Could Profit From Clinton, Obama in Office

The recent article "If McCain Wins, So Could These Funds" looked at investments that could do well if the current Republican front-runner were to capture the White House this fall.

This article explores the same theme on the Democratic side with the party's current front-runners, Hillary Clinton and Barack Obama.

If Gov. Mike Huckabee gains substantial ground in the Republican race, we will then look at funds that would be attractive during a Huckabee administration.

On the Democratic side of the presidential campaign race, the momentum is with Barack Obama.

His victories this week in Virginia, Maryland, and the District of Columbia bring him closer to the nomination -- at least for now.

If Obama wins the nomination and presidency, his Web site calls for $150 billion over 10 years to be invested in clean energy advances in biofuels and plug-in hybrids as well as the doubling of research and development funding for biomass, solar and wind power. His goal is 25% renewable electricity generation by 2025.

The fund pick for an Obama administration is PowerShares Wilderhill Clean Energy Portfolio (PBW). A third of this ETF is invested in alternative-energy stocks such as First Solar (FSLR), Ascent Solar Technologies (ASTI), Sunpower (SPWR) and FuelCell Energy (FCEL).

Clean energy would also be a Clinton priority.

Obama has repeatedly attacked the influence of lobbyists in Washington, D.C., and promised tax-code changes that may impact the profitability of these big corporations.

According to opensecrets.org , the top two industries ranked by lobbyist expenditures for 2007 were $114.3 million from pharmaceuticals/health products and $70.4 million from the insurance sector.

Obama's desire to bring down prices may hurt companies such as Pfizer (PFE), Eli Lilly (LLY), and Forest Laboratories (FRX). These are holdings of the SPDR Pharmaceuticals ETF (XPH), which may not fare well in an Obama administration.

The health-care plan submitted by Obama relies on forcing price cuts through the insurance industry without mandating that everyone join up. Clinton claims that would leave out 15 million Americans.

On balance, this may be bad for the industry. Insurance works by spreading risk. With everyone, including healthy people, in the system, average costs may be lower while revenue and profits rise.

Under a Clinton administration, the iShares Dow Jones US Insurance Index Fund (IAK) may stage a comeback but continue to suffer with Obama. Large holdings in the index include American International Group (AIG), Prudential Financial (PRU), Aflac (AFL) and Travelers (TRV).

Clinton shook up her campaign leadership, adjusted her message and launched a big-state strategy to pass Obama on March 4. If she does get nominated, the Consumer Discretionary Select Sector SPDR Fund (XLY) also may be worthy of consideration.

Although she says she's tough enough to take it, a Clinton nomination may inspire sidelined Republicans to dig deep and give huge sums of money.

Nearly one-third of the Consumer Discretionary fund is invested in media companies gobbling up the lion's share of the quarter of a billion dollars raised by political candidates for television commercials and other outreach activities. And, that is not including the unaffiliated 527 groups that are set to unleash their own "swift-boating" attack TV ads.

Large holdings include Walt Disney (DIS), Time Warner (TWX), Comcast (CMCSA), News Corp. (NWS) and Viacom (VIA).

If Clinton can divert money that would have been spent in Iraq, to the domestic economy, the 39% of the Consumer Discretionary SPDR invested in retail stocks such as Home Depot (HD), Target (TGT)and Nike (NKE) could benefit as well.

While Clinton may be more favorable to retail business, Obama claims his plan provides for higher levels of spending on roads, bridges and schools. His proposed National Infrastructure Reinvestment Bank would expend $60 billion over 10 years.

To capture this renewal, consider the PowerShares Dynamic Building & Construction fund (PKB). The allocation of this ETF is 30.6% engineering and construction, 20.1% building materials, 8.4% retail and 7.4% machinery. Big names include Trane (TT), Home Depot, Mohawk Industries (MHK) and Caterpillar (CAT).

Kevin Baker is senior financial analyst for TheStreet.com Ratings.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs