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ETFs to Gain/Lose on Trump's Impeachment

Sanghamitra Saha

By a historic 230-to-197 vote in the Democratic-majority House, President Donald Trump was impeached on Dec 18. The votes mark only the third time in American history that the House has impeached a president.

The announcement followed reports that Trump may have abused his presidential powers and “sought help from a foreign government to undermine the former Vice President Joe Biden, the current Democratic frontrunner, and help his own reelection.”

Now, the President will face a trial in the Senate that will decide whether he will be able to hold his position or not. Chances of Trump leaving the office is very low as the Republican Senate majority leader, was reportedly preparing for defending the President even before the House vote happened.

Still, we highlight below some ETFs that can top or flop if Trump gets impeached.

Likely Winners

China

Trump’s impeachment hints at the complete end to the trade war with China. Though the phase-one trade deal was announced in December, many issues have still not been resolved. In a recent speech at the United Nations General Assembly, Trump urged nations to opt for nationalism and reject globalism. So, China ETFs like iShares China Large-Cap ETF FXI may be in a good spot at the moment (read: 6 Trade-Proof Sector ETFs to Follow if No Deal is Cracked).

Low-Volatility ETFs

Low-volatility ETFs like Franklin Liberty U.S. Low Volatility ETF FLLV, SPDR SSGA US Large Cap Low Volatility Index ETF LGLV and Invesco S&P 500 Low Volatility ETF SPLV should also prosper as Trump’s impeachment talks may keep the broader market edgy.

Gold

Gold is often viewed as a safe-haven asset offering protection against financial risks and may perform well on heightened market volatility. Worries related to Trump’s impeachment will likely make the market edgy. Gold bullion ETF SPDR Gold Shares GLD should thus benefit in the near-term.

Likely Losers

Defense

Trump is a proponent of boosting the defense budget. Though any major fiscal tightening is unlikely despite a divided government, defense-oriented stocks may lose if Trump’s impeachment talks continue. So, defense and aerospace ETFs like iShares US Aerospace & Defense ITA may come under pressure.

Infrastructure

Trump is in favor of beefing up public spending by hundreds of billions of dollars on infrastructure. Thus, construction ETFs like Invesco Dynamic Building & Construction Portfolio ETF PKB and infrastructure ETFs like iShares U.S. Infrastructure ETF IFRA may feel some threat.

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Click to get this free report SPDR Gold Shares (GLD): ETF Research Reports Invesco Dynamic Building & Construction ETF (PKB): ETF Research Reports First Trust Utilities AlphaDEX Fund (FXU): ETF Research Reports Invesco S&P 500 Low Volatility ETF (SPLV): ETF Research Reports iShares China Large-Cap ETF (FXI): ETF Research Reports iShares U.S. Aerospace & Defense ETF (ITA): ETF Research Reports Franklin Liberty U.S. Low Volatility ETF (FLLV): ETF Research Reports SPDR SSgA US Large Cap Low Volatility Index ETF (LGLV): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report