EXCLUSIVE: Expert Predicts 'Double-Digit Growth' In 2 Sectors, Fueled By $1 Trillion From CHIPS, IRA, Infrastructure Acts
In an exclusive interview with Benzinga, Michael Sayers, CFA and vice president and portfolio manager at Rockland Trust, shared valuable insights into today’s investment opportunities.
Below, we explore the key questions and Sayers’ insightful responses:
How The CHIPS Act, IRA Act & Infrastructure Act Create Investment Opportunities
When asked about the anticipated influence of recent legislative developments like the CHIPS Act, IRA Act, and Infrastructure Act on investment opportunities, Sayers provided a comprehensive overview.
Regarding the potential effects of the CHIPS Act on technology investments and the semiconductor industry, Sayers pointed out the significant earmarked funds for semiconductors.
He highlighted the substantial infrastructure-related spending authorized by these acts, totaling approximately $1 trillion over the next decade.
A Significant Amount Of Money Still On The Table
Some quick back-of the napkin math by Sayers went as follows;
“Infrastructure-related spending across the Inflation Reduction Act (IRA), Infrastructure, and CHIPS acts totals ~$1 Trillion over a period of 10 years ending in 2031. About $650 billion has been authorized/committed so far.”
- About $250 billion has been allocation to semiconductors.
This should benefit investments into the iShares Semiconductor ETF (NYSE:SOXX) which provides exposure to the semiconductor equity sector in the U.S.
- Another $250 billion to clean energy and power.
The iShares Global Clean Energy ETF (NYSE:ICLN), along with the Invesco Solar ETF (NYSE:TAN) are among the two most popular ETFs that should benefit from this allocation.
- $150 billion has been allocated for EV and EV batteries.
Investors in the Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV), the iShares Self-Driving EV and Tech ETF (NYSE:IDRV) and the KraneShares Electric Vehicles and Future Mobility Index ETF (NYSE:KARS) which invest in stocks of electric vehicle manufacturers, should see this benefit trickling down to them.
“That leaves a significant amount of money still on the table, particularly under the IRA & CHIPS acts,” Sayer said pointing to $350 billion remaining from the total $1 trillion allocation.
Multi-Year Runway Of Annualized Double-Digit Growth Ahead
Backed by the $350 billion remaining, Sayers emphasized, “There is a multi-year runway of annualized double-digit growth in infrastructure-related construction & manufacturing spending ahead of us through the end of the decade.”
Rockland Trust allocates to the Russell Global Infrastructure Fund (RGISX) to take advantage of this positive outlook but also to provide diversification to the high-quality stock & bond portfolios that the firm manages for its clients
Investment Opportunities: Building upon Sayer’s insights into the potential growth in infrastructure and manufacturing sectors, let’s explore capital market instruments that investors could utilize to partake in this anticipated growth. Various Exchange-Traded Funds (ETFs) present attractive options for investors seeking exposure to these sectors.
ETFs for Infrastructure and Manufacturing Sectors: Infrastructure ETFs such as PAVE, IGF, and IFRA, as well as Manufacturing/Industrials ETFs like XLI and ITA, offer exposure to sectors poised for growth amid these legislative developments.
Let’s first look at the top infrastructure ETFs
These ETFs provide investors with diversified portfolios of companies operating in infrastructure development, manufacturing, and related industries, aligning with the anticipated growth trajectories highlighted by Sayers.
Some popular Infrastructure ETFs include:
| Symbol | ETF | Total Assets ($MM) | YTD% (as of April 15) |
| PAVE | Global X US Infrastructure Development ETF | $7,514.84 | +11.32% |
| IGF | iShares Global Infrastructure ETF | $3,503.42 | -1.49% |
| IFRA | iShares U.S. Infrastructure ETF | $2,320.23 | 4.71% |
| NFRA | FlexShares STOXX Global Broad Infrastructure Index Fund | $2,215.70 | -2.04% |
Now let’s look at the top Manufacturing/Industrial ETFs
Symbol | ETF | Total Assets ($MM) | YTD% (as of April 15) |
| XLI | XLI Industrial Select Sector SPDR Fund | $18,253,700 | 8.15% |
| ITA | ITA iShares U.S. Aerospace & Defense ETF | $5,998,910 | 1.09% |
| VIS | VIS Vanguard Industrials ETF | $5,328,240 | 7.99% |
| PPA | PPA Invesco Aerospace & Defense ETF | $3,012,080 | 7.63% |
| FXR | FXR First Trust Industrials/Producer Durables AlphaDEX Fund | $1,942,100 | 8.12% |
Investors can strategically navigate legislative developments and capitalize on emerging growth sectors by leveraging ETFs tailored to infrastructure and manufacturing industries.
With the guidance of financial professionals and thorough research, investors can position themselves to benefit from the evolving economic landscape.
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Image generated using artificial intelligence via Midjourney.