Biden's Big Plan... Which ETFs Benefit?

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[Asia Economy Reporter Junho Hwang] With U.S. President Joe Biden unveiling a $2.25 trillion infrastructure investment plan, benefits are expected for industrial sectors such as construction equipment, building materials, transportation, steel, and green energy industries. Advanced infrastructure sectors like semiconductors/telecommunications, data centers (REITs), and security are also areas of benefit. Kiwoom Securities has selected ETFs expected to benefit from the healthy recovery of the U.S. economy, the widening technology gap with China, and securing future competitiveness of the country. For overseas stocks, these ETFs are worth watching closely by Korean investors who prefer relatively safer exchange-traded funds (ETFs) over direct investments.

First, the Global X Infrastructure Development ETF (PAVE:US) is an ETF that allows diversified investment in U.S.-listed infrastructure development companies. Specifically, it covers 20 sectors including railroads, architecture/construction, heavy equipment, electronic components, trade, and steel, enabling broader investment in the U.S. infrastructure industry compared to similar ETFs. It tracks the 'The INDXX U.S. Infrastructure Development Index' as its benchmark, classifying stocks that meet two conditions in sectors such as construction services, raw materials and composites, products and equipment, and raw materials and equipment transportation, then selecting the top 100 companies by market capitalization. Compared to IFRA, it has an industrial goods weighting of over 70%. Individual stock weights are limited to 0.3?3%, and rebalancing is conducted once annually on the last business day of January.

The iShares U.S. Infrastructure ETF (IFRA:US) invests in companies that can benefit from U.S. infrastructure investment. It targets companies in energy transportation and storage, railroads, utilities, construction, and engineering services with a minimum market capitalization of $300 million and an average daily trading volume of over $1 million for three months.

The VanEck Vectors Semiconductor ETF (SMH:US) focuses on 25 companies spanning global non-memory, memory, and equipment sectors. It ranks second in assets under management (AUM) among semiconductor ETFs after SOXX and is the most actively traded product in terms of liquidity. It is based on the MVIS US Listed Semiconductor 25 Index. This index is composed by market-cap-weighting companies that generate over 50% of their revenue from semiconductors/equipment and have a market capitalization of at least $150 million or an average three-month trading volume of over $1 million. The individual stock weight limit is high at 20%.

This content was produced with the assistance of AI translation services.