Republicans and Democrats may bicker and nitpick over many policies, but the two parties can find common ground on some investments. Retail investors can also track the thematic plays through diversified sector-related exchange traded funds.
Currently, members of the 113th Congress hold heavy stakes in technology, financial and telecom stocks, reports Karma Allen for CNBC.
Specifically, 57 members hold Microsoft (NasdaqGS: MSFT), 48 hold Apple (NasdaqGS: AAPL), 48 hold IBM (NYSE: IBM), 44 hold Cisco Systems (NasdaqGS: CSCO), 50 hold Wells Fargo (NYSE: WFC), 46 hold JPMorgan Chase (NYSE: JPM), 47 hold AT&T (NYSE: T) and 47 hold Verizon Communications (NYSE: VZ).
Along with these stock exposures, ETFs provide investors the opportunity to access a diversified portfolio of equities taken from the sectors.
For instance, the Technology Select Sector SPDR (NYSEArca: XLK), the largest tech-related ETF, has a 16.8% position in AAPL, 10.1% in MSFT, 5.3% in VZ, 4.6% in T and 3.8% in IBM. Alternatively, the iShares U.S. Technology ETF (NYSEArca: IYW) has a heftier 19.5% weight toward AAPL, along with MSFT 11.8%, IBM 4.4%, CSCO 3.8% – the iShares Tech ETF, though, does not include any exposure to the telecom stocks. XLK has a 0.16% expense ratio and IYW has a 0.45% expense ratio. [A Return to Tech ETFs]
The iShares U.S. Financial Services ETF (NYSEArca: IYG) and the Financial Select Sector SPDR (NYSEArca: XLF) both include large positions in JPMorgan and Wells Fargo. IYG has 11.4% WFC and 10.2% JPM while XLF includes 8.5% WFC, and 7.6% JPM. IYG has a 0.45% expense ratio and XLF has a 0.16% expense ratio.
Additionally, the Vanguard Telecommunication Services ETF (NYSEArca: VOX) holds a heavy 23.0% position in AT&T and 22.9% in Verizon while the Fidelity MSCI Telecommunication Services Index ETF (NYSEArca: FCOM), the newest member of the telecom ETF group, weights T at 22.4% and VZ at 22.6%. FCOM has a 0.12% expense ratio and VOX has a 0.14% expense ratio.
Under the STOCK Act, members of Congress are required to provide public disclosures on their stock positions as a deterrent to trade based on insider information or abuse their positions of power.
“Members of Congress act every day on decisions which will earn, or cost, companies billions of dollars,” Daniel Newman, co-founder of MapLight, said in the CNBC article.
For more information on the market sectors, visit our sector ETFs category.
Max Chen 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.