Passage of Infrastructure Bill Leads Markets Onwards and Upwards

Late last Friday, the House of Representatives passed the $1 trillion infrastructure bill that had been hanging in limbo since its passage in the Senate in August. The bill is now before President Biden for his sign-off and is a massive boost in funding for utilities, transportation, and internet improvements and access, reported CNBC.

Markets responded resoundingly to the news, with the Dow Jones Industrial Average hitting a new intraday high, gaining 175 points, the S&P gaining 0.2%, and the Nasdaq Composite rising 0.2% as well. This follows on the heels of record closes on Friday of last week after the jobs report was better than anticipated, adding 531,000 jobs in October.

With the announcement by the Fed last week of tapering bond purchases that have been aiding the struggling economy during the pandemic, as well as inflationary fears, markets have been hesitant recently after their run-up for most of the year. Inflation updates are expected mid-week with the producer price index and the consumer price index both reporting; both are anticipated to be high by economists.

“The economy is certainly picking up some momentum,” JPMorgan’s David Lebovitz said on Friday on CNBC’s “Squawk on the Street.” “We are expecting economic growth to accelerate here into the end of 2021 and the beginning of 2022.”

Capturing Growth While Hedging Against Inflation With American Century

For investors who want to capitalize on the growth broadly but are looking to hedge against inflationary fears, diversifying exposure is an excellent option; the Avantis U.S. Equity ETF (AVUS) offers diversification in spades. The fund is actively managed and invests in U.S. companies across all market caps and sectors, offering exposure to a variety of industries.

AVUS is benchmarked to the Russell 3000 Index. It works by overweighting smaller market cap companies, high profitability companies, and value companies, and it underweights or excludes large-cap companies that offer lower returns.

The portfolio managers consider the financials and market data of companies when investing, as well as industry classification, the performance of a security compared to its peers, and the stock’s liquidity, float, and tax considerations.

As of the end of September, sector allocations were information technology at 22%, financials at 17%, consumer discretionary at 15%, healthcare at 12%, and industrials at 11%, with smaller allocations to other sectors.

AVUS has an expense ratio of 0.15% and has 2079 holdings.

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