Big unemployment numbers are a big problem. That’s why President Obama and his administration used the long weekend to unveil a public works plan that is largely aimed at bringing the 9.6% rate down to something more palatable. These exchange traded funds (ETFs) can benefit.
The Obama administration is rolling out a multi-part economic jobs plan that is aimed at fighting the high unemployment numbers. About $50 billion in government spending is allocated to upgrade infrastructure, including roads, rail lines and runways, explains Peter Grier for The Christian Science Monitor. [5 ETFs Affected By Infrastructure.]
Obama’s new plan will also include a proposal to allow businesses to fully write off capital investments through 2011, and a permanent extension of R&D tax credits, according to administration officials. That’s just a teaser; the official details will be heard on Wednesday. [How To Invest In A Jobs Recovery.]
According to the White House, this new public works plan is not expected to add to an already ballooning deficit over time and is expected to be funded through the elimination of tax deductions for oil and gas companies, explains Kevin Grewal for Daily Markets.
Many factors are hanging over the administration such as the Democrats losing control of Congress, mixed economic reports and upticks in the nations unemployment rate.
Consider these following ETFs once this new plan gets under way. If it’s a success and contributes to economic growth the way the administration hopes it will, these funds may be best positioned to benefit.
- iShares Dow Jones Transportation Average (NYSEArca: IYT): Rail additions and upgrades would be most evident in IYT, which primarily holds rail companies. More lines and improved lines would vastly improve the way goods are transported cross-country.
- PowerShares Dynamic Building & Construction Portfolio (NYSEArca: PKB): This ETF has 68% allocated to U.S. industrials, putting it in a position to benefit from any pickup in construction and building activity here.
- PowerShares DB Base Metals (NYSEArca: DBB): Base metals are the cornerstone of industrial activity, used in everything from building support to wiring and piping.
- PowerShares Build America Bond (NYSEArca: BAB): Build America Bonds are a way for Americans to support the U.S. recovery. More than $125 billion have been issued since the program was put in place and demand has outpaced supply. [Investing in the Recovery.]
- Market Vectors Steel (NYSEArca: SLX): As building around the country resumes, it will increase the demand for steel. The companies held in SLX will need to ramp up production to keep pace with supply.
- SPDR FTSE/Macquarie Global Infra 100 (NYSEArca: GII): Although GII is an international infrastructure ETF, nearly 40% of it contains holdings in the United States. It’s largely a utility play, with 86.6% of the fund allocated to the sector.
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.