What ASX stocks could benefit from Biden

One member made a very sensible suggestion for a Biden Basket. A basket of ASX stocks that could benefit from Biden . Very sensible suggestion.

I watched Jokin’ Joe on CNBC this morning. He was almost looking Presidential.  The new agenda is likely to include stimulus spending and investment in multiple areas of the economy, including infrastructure, broadband, affordable housing, and rebuilding schools.

So how do we as ASX facing investors get into some of the action?

Of course, there are ETFs, but Marcus has that covered. I will leave that to him but plenty around giving exposure to the US economy

Here are a few key ones:

• GGUS – Geared exposure to the returns of US market but hedged in AUD.
• IVV – Tracks returns of largest US companies.
• NDQ – Nasdaq tracker.
• IJH – Tracks mid cap US stocks.
• IJR – 600 of the smaller US equities.
• MOAT – Tracks the price and yield performance the 20 most attractively priced companies with sustainable competitive advantages according to Morningstar’s equity research team.

The idea though is to pick six stocks that have exposure to the Biden recovery plan. Here are some potential winners.

• JHX – Building recovery. Could also switch with BLD perhaps.
• WHK – Increase cyber security but smaller and speculative.
• MQG – The ‘Big Daddy’ of infrastructure experts.
• APT or Z1P – Increase consumer spending.
• PLL – Lithium as green policies take off.
• TWE – Thawing relationship with China.
• A2M – That same thawing.
• IKE – Building out 5G infrastructure and using data better (small and illiquid)
• EDE – Concrete additive but tiny market cap.
• LYC – Strategic partner in Rare Earths. ARR/NTU/REE in that frame too.
• MIN/PLS/ORE – lithium production.
• CSL – blood plasma bounce
• FPH – Healthcare devices.
• TCL – Infrastructure owner.
• WSA – Nickel producers.
• ASB/EOS/ XTE – defence spending increases (not as likely)
• BSL – US steel winner
• DRO/OEC – drone companies.

Now to distil them down into six is the tricky bit.

These six will be far more speculative and carry more risk/reward obviously and I will track them to see how they go. Six stocks makes it relatively cheap to get set with brokerage and easy to manage with just enough diversity to ensure it is not a conviction portfolio. I present to you the Biden Basket:

• JHX – Housing exposure
• MQG – Infrastructure experts.
• TWE – Better relations with China and US consumer exposure
• A2M – Chinese exposure
• BSL – US automaker exposure and Building products
• FPH – CV19 exposure in US hospitals.
  
  

Bear in mind that the market has had a good run so if you are looking at building a Basket it may pay to finesse and time entry into any positions.

I will track the performance of this basket in the newsletter, but they are long term trend baskets, so timing is key to optimise returns.

This is just a guide and there are many companies that could benefit and many permutations.