Interview With Ed McRedmond: Positioning Your Portfolio For The Obama Administration

Barack Obama will be sworn in as the US President in a few days’ time, and investors are looking at how to position their portfolios to benefit from the new administration’s projects. In this interview, Ed McRedmond, Senior Vice President at Invesco Powershares, gives investors some ideas about how to position themselves using Exchange Traded Funds (ETFs).

The new administration has promised to take on major infrastructure upgrades as a way of boosting the economy. What would be some of the ways to take advantage of this upcoming government spending?

There are a number of options investors can look at to benefit from the new administration’s infrastructure plans. Logical beneficiaries of an increase in infrastructure spending would be companies focused on building, construction and basic materials and therefore ETFs such as the PowerShares Dynamic Building & Construction (PKB) and the PowerShares Dynamic Basic Materials Sector (PYZ).

It also appears that a major part of any infrastructure upgrades will include renewable energy infrastructure, which would likely benefit areas like wind power, solar power, geothermal and certainly energy efficiency where some of the new administration’s major appointees have significant expertise and interests. ETFs such as the PowerShares Clean Energy Portfolio (PBW), PowerShares Global Wind Energy (PWND) and PowerShares Progressive Energy (PUW) provide exposure to companies that might benefit from an increase in spending on renewable energy infrastructure.

We’ve seen commodities slump over the last year. Will the Obama administration’s infrastructure projects give related commodities such as industrial metals a boost? If so, how can investors position their portfolio to take advantage of this?

Industrial metals might see an incremental boost in demand from infrastructure projects. A much bigger driver would be a pick-up in economic growth around the world. The PowerShares Global Steel (PSTL) and PowerShares DB Base Metals (DBB) ETFs would be two options offering exposure to this theme.

What is the main difference between your Progressive Energy Portfolio and Clean Energy Portfolio? Which of these portfolios can benefit under the new administration?

The PowerShares WilderHill Clean Energy Portfolio (PBW) and PowerShares Global Clean Energy (PBD) focus on zero-carbon pure plays such as solar and wind while the PowerShares WilderHill Progressive Energy Portfolio (PUW) focuses on innovative bridge technologies that reduce near-term pollutants stemming from fossil fuels and from today’s dominant energy sources. One or all of these ETFs might benefit from the incoming Obama administration, since all are relevant to the stated renewable energy goals of the new administration.

Do you think the new administration’s emphasis on the environment will inspire a worldwide adoption of clean technology? If so, how can an investor capitalize on this?

A big push from the new administration may inspire a greater global focus on clean technology, though it’s worth noting that the use of clean technology has already been adopted in a number of countries. One way for investors to capitalize would be through global ETFs that provide exposure to clean technology related industries such as the PowerShares Global Clean Energy (PBD)), PowerShares Global Wind Energy (PWND) or PowerShares Progressive Transportation (PTRP).

Ed McRedmond is the senior vice president of Portfolio Strategies for PowerShares Capital Management LLC. At Invesco PowerShares, Mr. McRedmond works on increasing the awareness and use of PowerShares ETFs within the various distribution channels, working with ETF analysts, due diligence groups and portfolio managers that construct ETF models and portfolios, along with sales and marketing personnel.

He joined PowerShares in 2005 after 17 years at A.G. Edwards, where he was Associate Vice President and a member of the Allocation Advisors Investment Committee. While at A.G. Edwards, Mr. McRedmond also served as senior analyst covering exchange-traded funds and closed-end funds and was a key part of the team that launched and managed A.G. Edwards’ discretionary ETF model portfolios.

Mr. McRedmond was also a member of the St. Louis Financial Analysts Society. Prior to joining A.G. Edwards, Mr. McRedmond was a founding member and supervisor of Charles Schwab’s Active Trader group.

Mr. McRedmond has been quoted in numerous publications such as Barron’s, The Wall Street Journal, Business Week, Forbes, The NY Times and Kiplinger’s Personal Finance Magazine. In 2008, he received the award for Contribution to the ETF Sector at the Capital Link Closed-End Funds and Global ETF Awards Conference and was also an Honorable Mention recipient at the 2007 Capital Link Closed-End Funds and Global ETF Awards Conference for Contribution to the ETF Sector.

Mr. McRedmond is a graduate of Quincy University with a B.S. degree in Economics & Finance and was a two-time winner of the school’s annual investment challenge for the top performing student selected portfolio.

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