Five ETFs for the Obama AgendaPublished1/26/2011 11:40 AM EST President Obama's careful balance of Democratic objectives and Republican objections (such as resistance to an expanding budget) has helped to push the Dow past the important psychological level of 12,000 this morning as investors consider new ways to tap into an ambitious agenda for economic recovery. Obama touched on several large themes in his State of the Union speech last night, with the key word being "investment" instead of "spending." The president recommitted "investment" in areas such as information technology, research and "especially" clean energy. Here are five ETFs that should benefit from Obama's new agenda: 1. PowerShares WilderHill Clean Energy ETF ( PBW) Clean and renewable energy was clearly one of Obama's primary focus points during last night's State of the Union address. Americans should expect to see an increase in funding across many sub-sectors in of the clean energy industry. Investors looking to target this increase on a broader scale should consider PBW. Rather than tapping into a smaller sub-sectors of the clean energy industry (as the next few funds will do), PBW's underlying portfolio is designed to deliver capital appreciation through the selection of companies that focus on "greener and generally renewable sources of energy and technologies that facilitate cleaner energy." PBW's underlying holdings include everything from Trina Solar ( TSL) to Advanced Battery Technologies ( ABAT) to Broadwind Energy ( BWEN) and Ocean Power Technologies ( OPTT). 2. Global X Lithium ETF ( LIT) One aspect the clean energy movement that should see continued investment both in the U.S. and abroad is the development of new batteries as power sources for cars and other traditionally energy-needy technologies. Many of the new batteries that are being tested for use in cars, aircraft and other areas of transportation and tech include lithium. The focus on this type of fuel cell has helped to draw remarkable investor interest to the relatively new LIT, which tracks global firms such as Advanced Battery, Galaxy Resources, Canada Lithium and Lithium Americas. 3. Market Vectors Nuclear ETF ( NLR) Mentioned as yesterday's "
The Best Offense Is a Good Defense ETFPublished 1/27/2011 4:55 PM EST Despite looming budget cuts, defense firms such as Lockheed Martin ( LMT), Raytheon ( RTN) and L-3 Communications ( LLL) are soaring above estimates and shrugging off the shroud of negativity that's been hanging on the sector. In their respective releases, Lockheed Martin predicted better-than-expected profits, Raytheon said it expects higher full-year earnings and L-3 Communications increased its 2011 outlook. All three of these major defense players are included in the iShares Dow Jones U.S. Aerospace & Defense ETF ( ITA) (ITA). Lockheed Martin makes up 6.05% of the fund, Raytheon accounts for 5.58% and L-3 Communications clocks in at 3.95%. Though the U.S. government is certainly cutting back on spending in some areas -- the U.S. Defense Department earlier this month promised to cut $78 billion in spending over the next five years -- large defense firms are making their own cut-backs to boost the bottom line. As investors have seen in other sectors, including financials and manufacturing, these cut-backs often lead to glowing earnings reports. Trading in ITA can be shallow at times, but it is a well-balanced fund that shuns the top-heavy portfolio construction seen elsewhere in the ETF universe. If investors remember to break up large orders and trade efficiently, ITA will be a good tool for targeting a profitable sector in the weeks ahead. At the time of publication, Dion Money Management held no positions in the stocks mentioned.