Sector ETFs to Win If Kamala Harris Wins Presidential Election

The race to the White House is becoming more unpredictable as the 2024 U.S. presidential election draws closer. With no clear front-runner emerging, the contest remains tight. The outcome will largely depend on key battleground states, which are set to play a crucial role in deciding who gains the upper hand in the final polls.

According to the RacetotheWH Presidential Forecast, Kamala Harris is currently leading Donald Trump in national polls 49.1% to 46%.

Sector ETFs to Gain if Harris Wins

Against the afore-mentioned backdrop, below we highlight a few sectors and their related ETFs that can gain if Harris wins.

Presidential Hopeful Harris to Boost AI Stocks?

Harris, known for her involvement in AI policy, could bring increased focus on technology issues if elected, building on initiatives like the government's AI executive order. Her Silicon Valley connections and endorsements suggest strong support from tech circles.

Before entering politics, Harris was San Francisco’s first female district attorney and later, she became California’s first female attorney general, the Los Angeles Times reported. During her career as a prosecutor, Harris launched a data transparency project called OpenJustice. In 2016, Harris was elected to the U.S. Senate where she announced a bill called the Digital Service Act.

With AI technology rapidly advancing and becoming increasingly integral to various industries, investors must be looking for ways to capitalize on this trend. Hence, investors can keep a close tab on ETFs like Global X Robotics & Artificial Intelligence ETF BOTZ.

Harris to Hike Taxes?

Democratic presidential candidate Kamala Harris has proposed hiking the corporate tax rate from 21% to 28% if she wins the November election. According to Goldman Sachs analysts, this hike could lower earnings for companies on the benchmark S&P 500 Index by about 5% (read: Will S&P 500 ETFs be Affected by Harris' Proposed Tax Hike?).

Harris also looks to introduce a taxation of foreign income and raise the alternative minimum tax rate from 15% to 21%, which could further lower earnings by up to 8%, as quoted on Reuters. Goldman Sachs estimates that a 1 percentage point change in the U.S. statutory domestic tax rate would result in a slight shift in S&P 500 earnings per share (EPS), amounting to less than 1% or about $2 of S&P 500 EPS. The proposal puts focus on SPDR S&P 500 ETF SPY.

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Fracking and Energy Policy

Previously, Harris promoted the Green New Deal, which included a ban on fracking, a controversial drilling technique in the fossil fuel industry. In contrast, her current campaign has moderated this stance. Her stance now seeks to achieve environmental goals while maintaining energy production and affordability. She now opposes a fracking ban. This could be good news for energy ETFs like Energy Select Sector SPDR ETF XLE.

Harris puts more stress on incentivizing change through market mechanisms rather than government mandates. This again aligns more closely with the idea of using tax credits and subsidies for green energy. ETFs like iShares Global Clean Energy ETF ICLN should go well with this idea.

Cannabis Stocks to Gain

In early 2024, in a White House meeting, Vice President Kamala Harris urged the DEA to expedite the rescheduling of marijuana, criticizing its current Schedule 1 classification as "absurd" and "patently unfair." She stressed on the need for swift action and highlighted the ongoing efforts toward rescheduling. Pot stocks and ETFs like Roundhill Cannabis ETF WEED, Amplify Seymour Cannabis ETF CNBS should thus benefit (read: Is Rescheduling a Certainty for Cannabis? ETFs That Surge).

Real Estate Sector May Gain?

Harris prioritized affordable housing, advocating for the Rent Relief Act, offering tax credits to renters earning under $100,000, aiming to ease housing cost burdens. Real estate ETFs like iShares U.S. Real Estate ETF IYR could be beneficial.

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