After the American Rescue Plan, President Joe Biden proposed the American Jobs Plan that is directed toward investing nearly $2.3 trillion to create jobs, rebuild America’s infrastructure, provide high-speed Internet with better security and position the United States in an advantageous position compared to China. While the plan is in its very early stages and may hit several roadblocks from the Republicans, there are a few sectors that will benefit in the long run.
Biden’s American Jobs Plan specifically focuses on traditional infrastructure projects like roads and transportation and may account for one-third of the bill’s amount. Hence, the plan emphasizes mostly on fixing highways, rebuilding bridges and upgrading ports, airports, and transit centers along with rebuilding a clean infrastructure for safe drinking water, renewed electric grid and providing high-speed broadband to the entire nation. As the President also puts more emphasis on green initiatives and plans to achieve net-zero emissions by 2050, this plan invests significant amount in modernizing homes, commercial buildings, schools and federal buildings, making them energy efficient. This will also provide additional perks to those transitioning into green and clean energy.
Additionally, it will fortify America’s cyber defenses. Nearly $20 billion will be invested in the Department of Energy to support modernization of critical infrastructure through grid resilience, clean electricity and cybersecurity efforts. During the pandemic, there have been constant cyberattacks on different level of administration and public infrastructure. This has raised questions on what constitutes necessary infrastructure in the 21st century economy, which is dramatically turning into a digital book? Biden’s bill addresses the issue and to promote secure network, a $100-billion investment in broadband and network security has also been planned for.
The President also plans to invest $180 billion in artificial intelligence, biotechnology and computing to increase economic competitiveness and national security. He also plans to offer funding to support production of critical goods, especially in semiconductor manufacturing and research.
Lastly, elder care initiative has taken a spotlight in this plan. It aims to create caregiving jobs and raise wages and benefits for those working in essential home care. Nearly $400 billion is being slated to give quality, affordable home or community-based care for aging people and those with disabilities. It is intended to expand and subsidize healthcare plans and construct new senior living centers, long-term care facilities, or skilled nursing homes. Additionally, it includes $30 billion in new investments in bio-preparedness and biosecurity. The pandemic has highlighted the need for stockpiling of personal protective equipment in case of calamities and upgrading research infrastructure in laboratories.
4 Top Fund Picks
Though the plan is yet to materialize, once signed, it should open up a big opportunity for the infrastructure, communications, semiconductorand healthcare industries along with millions of jobs. Here are four mutual funds from the aforementioned industries that can benefit from Biden’s “American Jobs Plan” and investors can grab them for higher returns. All the funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) and are poised to grow. Moreover, these funds have encouraging year-to-date (YTD) returns. Additionally, the minimum initial investment is within $5000. We expect these funds to outperform peers in the future.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Real Estate Investment Portfolio FRESX fund aims for above-average income and long-term capital growth, which is consistent with reasonable investment risk. This non-diversified fund invests primarily in common stocks. The majority of FRESX’s assets are invested in securities of companies, principally engaged in the real estate industry and other real estate-related investments.
This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 11.1% and 7.2% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FRESX has an annual expense ratio of 0.74% versus the category average of 1.11%.
Fidelity Select Health Care Portfolio FSPHX fund aims for capital appreciation. This non-diversified fund invests majority of assets in common stocks of companies principally engaged in the design, manufacture or sale of products or services used for or in connection with health care or medicine.
This Zacks sector – Health product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 20.5% and 17.9% over the past three and five-year period, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FSPHX has an annual expense ratio of 0.70% versus the category average of 1.03%.
Fidelity Select Semiconductors Portfolio FSELX fund aims for capital appreciation. The non-diversified fund invests majority of assets in securities of companies principally engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment.
This Zacks sector – Tech fund has a history of positive total returns for more than 10 years. Specifically, FSELX has three and five-year annualized return of 32.1% and 33.6%, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FSELX has an annual expense ratio of 0.72%, which is below the category average of 1.05%.
Fidelity Select Technology Portfolio FSPTX fund aims for capital appreciation. This non-diversified fund invests primarily in equity securities, especially common stocks of companies that are engaged in offering, using, or developing products, processes, or services that will provide or will benefit significantly from technological advances and improvements.
This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. Specifically, FSPTX has returned 31.3% and 32.7% in the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FSPTX has an annual expense ratio of 0.71% versus the category average of 1.05%.
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