The House of Representatives approved the trillion-dollar infrastructure bill last Friday night, opening up opportunities for a pair of ETF trades from Direxion Investments.
The obvious play is to get bullish on infrastructure with the Direxion Daily US Infrastructure Bull 2X Shares (DOZR). The fund adds a double dose of risk or reward with twice the exposure to its index, the Indxx US Infrastructure Index (IUSINFI).
The index is designed to track the performance of U.S.-listed securities, including ADRs, of companies that are involved in infrastructure through the engineering, design, maintenance, and construction of infrastructure projects. The index provider defines infrastructure as being comprised of construction and engineering services and industrial transportation companies.
Companies that derive a minimum of 50% of their total revenue from construction and engineering services or industrial transportation are eligible for inclusion in the index. The index provider screens companies based on various market capitalization and liquidity metrics and selects the top 100 securities by market capitalization.
A Healthcare Trade to Consider
Another trade to consider aside from the infrastructure play is building off the procedural vote, which could line up the passage of the Build Back Better Act. In this instance, traders can opt for a healthcare play with the Direxion Daily Healthcare Bull 3X ETF (CURE).
“Many of the healthcare provisions are in the Build Back Better Act, but the infrastructure bill does include expanded broadband internet,” a Healthcare Finance article says. “This will help consumers, especially in rural areas, take advantage of new telehealth policies in the physician fee schedule final rule released by the Centers for Medicare and Medicaid Services last week.”
CURE seeks daily investment results equal to 300% of the daily performance of the Health Care Select Sector Index. The fund achieves this exposure by investing at least 80% of its net assets in financial instruments, such as swap agreements, securities of the index, ETFs that track the index, and other financial instruments that provide daily leveraged exposure to the index or to ETFs that track the index.
The index includes domestic companies from the healthcare sector, which includes pharmaceuticals, healthcare equipment and supplies, healthcare providers and services; biotechnology, life sciences tools and services, and more. These sub-industries have all been affected by the pandemic in some form or fashion, giving traders dynamic opportunities to play the market.
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