These ETFs are winners if Biden’s infrastructure plan is passed, Bank of America says
President Joe Biden's ambitious infrastructure package could spell big upside for a handful of exchange-traded funds with exposure to the semiconductor, health care and industrials sectors, Bank of America told its clients. ETF strategist Jared Woodard wrote that the end of the Covid-19 pandemic and Biden's $2 trillion infrastructure plan are expected to spark a "boom" in capital expenditures as companies build new factories and plants in the U.S. That, in turn, will benefit a host of sectors involved in the construction of roads and bridges, the expansion of broadband access and the manufacturing of electric vehicles, Woodard added. "Recent fiscal packages contain some clear catalysts that will send capex higher," the strategist wrote. The "US capital stock is the oldest it has ever been, with an average age of 22 years. Consumers want goods made locally, want jobs kept locally, and reward decision-makers who listen." Woodard and his colleagues highlighted seven winning themes and associated ETFs in light of the Biden administration's recent fiscal stimulus packages. If approved by Congress, the president's proposal would earmark $621 billion for transportation systems such as bridges, roads and airports. It would also inject more than $300 billion into improving drink-water infrastructure, expanding broadband access and upgrading electric grids. Strategists across Wall Street have cautioned that the bill's fate is murky with the vast majority of the Republican caucus opposed to another massive round of stimulus and a rollback of former President Donald Trump's 2017 tax cuts. Still, Woodard told clients he's bullish on industrials, as well as engineering and construction — two classic infrastructure plays. The capital rebound will likely benefit robot makers and firms that can automate their production lines, Woodard explained, including Rockwell, Eaton or Parker Hannifin. As such, Bank of America recommends clients consider Invesco's S & P 500 Equal Weight Industrials ETF , or RGI. That ETF tracks the performance of industrials stocks found in the S & P 500, including those in the aerospace and defense, building products, construction and engineering and electrical equipment businesses. He also recommends the First Trust Nasdaq Clean Edge Green Energy Index Fund , or QCLN, as a savvy way to play the Biden administration's clean-energy focus and a push toward electric vehicles. "Several different methods to target this have been proposed including the extension of tax credit, a return of the 'cash for clunkers' program (i.e. incentivizing the replacement of older energy inefficient vehicles) and greater investment in charging infrastructure," Woodard wrote. — CNBC's Michael Bloom contributed reporting.

A Skanska AB construction worker guides a crane carrying lumber as a concrete boom pours concrete on the Sixth Street Viaduct replacement project in Los Angeles, California, U.S. on Tuesday, April 6, 2021. Bing Guan | Bloomberg | Getty Images