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In 7 Days, an Obama Win Could Send Four ETFs Soaring

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These sector ETFs have the potential to rally on the back of an Obama reelection.

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Believe it or not, Election Day is just six days away. With the polls showing the chances of nail-biter are growing, markets and investors are apt to remain pensive until at least next Wednesday. Hopefully, there will not be a repeat of 2000 when a clear winner did not immediately emerge after the polls closed.

Since it became clear that Republican Mitt Romney would be President Barack Obama's challenger, analysts, experts, and pundits have been attempting to figure out which sectors and stocks will perform well assuming either outcome.

An array of predictable calls have been made. Buy energy and financial services ETFs if Romney wins, some analysts and traders have said. Bet on health care and telecom funds if President Obama is reelected.

There is always a chance that any reaction by sector ETFs to the election will be short-lived. However, it does pay to be prepared. With that, here is one last run through some sector ETFs that have the potential to rally on the back of an Obama reelection.

iShares Dow Jones US Telecom Index Fund (NYSEARCA:IYZ): A solid performer for most of 2012, the iShares Dow Jones US Telecom Index Fund has fallen on hard times recently, sliding 4.3% in the past month. An Obama victory could be just what IYZ and rival telecom funds need to get back on track. S&P Capital IQ explained why in a September research note.

"President Obama has been supportive of broadband expansion, through government subsidies, enticing carriers to build out their networks. In addition, the Federal Communications Commission's chairman has been a proponent of moving wireless spectrum from television broadcasters to telecom carriers. If Governor Romney wins, a new chairman would take over and could scuttle these efforts," the research firm said.

Guggenheim S&P 00 Equal Weight Health Care ETF (NYSEARCA:RYH): How the Guggenheim S&P 500 Equal Weight Health Care ETF reacts to an Obama reelection will be interesting to see. The ETF spreads about 78% of its weight between health care services providers, equipment makers and traditional pharmaceuticals names. In other words, this ETF has, to this point, benefited from Obamacare.

RYH's 25.6 allocation to health care equipment and supply firms could be a thorn in the ETF's side, though. Obamacare contains a tax on medical device firms that could lead to the loss of tens of thousands of jobs and billions of dollars of lost economic output.
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No positions in stocks mentioned.

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