Financial markets are on edge ahead of the United States presidential election on November 5. Both candidates’ proposed policies could drive market volatility, leaving investors searching for assets to protect against any emerging uncertainty.
While stocks and precious metals have shown strength leading up to the election, one overlooked area is exchange-traded funds (ETFs).
ETFs are generally considered safe investments. They offer diversification, transparency, and liquidity to help investors spread risk across multiple assets.
Picks for you
With this in mind, as the market offers several options, Finbold turned to ChatGPT-4o, an artificial intelligence (AI) tool by OpenAI, to identify two ETFs investors should consider after the polls.
iShares U.S. Infrastructure ETF (IFRA)
The AI tool noted that the iShares U.S. Infrastructure ETF (IFRA) will likely see upward momentum, given that infrastructure spending is a priority for both Donald Trump and Kamala Harris.
ChatGPT pointed out that IFRA could benefit if policies favor infrastructure investment. Notably, IFRA tracks companies in sectors like construction, materials, and transportation.
Vice President Harris has already signaled her support for infrastructure. Her administration, alongside President Joe Biden, allocated $62 billion from the Bipartisan Infrastructure Law this year for critical upgrades and improvements to transportation systems. If elected, there is high anticipation that she might continue with this policy.
On the other hand, if re-elected, Trump supports streamlining regulations in the infrastructure sector, promoting public-private partnerships, and expanding and modernizing pipelines, refineries, and energy distribution networks.
This outlook aligns with a forecast from analysts at Mordor Intelligence, predicting that the infrastructure market has the potential to grow from $2.72 trillion in 2024 to $3.69 trillion by 2029.
As of press time, IFRA was valued at $46.68, reflecting year-to-date gains of nearly 16%.
Invesco Solar ETF (TAN)
Second on the list is the Invesco Solar ETF (TAN), with the AI model noting that investments in renewable energy ETFs are well-positioned to rally. According to ChatGPT-4o, the ETF could see gains if the winning candidate favors advancements in clean energy and climate change policies.
It is worth noting that climate and energy policies remain among the most hotly contested topics in the current polls, and the election outcome could impact related investment products.
In this case, both candidates offer different outlooks on energy. Harris intends to implement policies that favor clean energy technologies, while her challenger focuses on rolling back green regulations that hinder oil and gas drilling and coal mining.
Since the ETF encompasses products on both sides of this spectrum, a win for either candidate might be bullish for the investment.
At the last market close, TAN was trading at $39.79, down 25% in 2024.
In conclusion, both IFRA and TAN offer compelling opportunities for investors, considering the poll outcome could significantly impact infrastructure and energy policies. However, these prospects do not rule out the fact that both ETFs are still susceptible to general market volatility.
Featured image:
Kamil Zajaczkowski – Poland -11 December 2022. Digital Image. Shutterstock.
