The first year and a half of President Obama's term has been market by bold initiatives to reshape domestic policies and transform the U.S. economy. And for the most part the administration has followed through on its promises, already pushing through overhauls of the health care and financial systems. During his January State of the Union Address, Obama announced his National Export Initiative, a plan to double the country's exports within five years. By boosting the value of American goods shipped overseas the president hopes to create new jobs on the home front, overcoming one of the most significant obstacles standing in the way of a sustained economic recovery [see UNG: Proof Of A U.S. Recovery].

According to the White House, exports surged almost 17% in the first four months of this year, indicating that the ambitious export agenda is moving forward. "This puts the US on track to reach the president's goal of doubling exports and supporting several million new jobs over five years," the White House said in a statement. According to an analysis from the Council of Economic Advisors, the increase in exports over the last nine months has contributed more than 1% to GDP growth. "Boosting America's exports strengthens our economic growth and supports millions of good, high-paying American jobs," said Obama.

ETF plays on an export boom
Although the early data has been promising, investors remain understandably skeptical over the prospect of U.S. exports doubling by 2015. The gains racked up in the first part of the year represent the low-hanging fruit; easy gains made after one of the most severe economic contractions in generations. Others are more optimistic that exports will continue to surge in coming years, noting recent progress made in talks with South Korea and the abundance of relatively easy gains. The number of domestic firms sending goods overseas represents only about 1% of U.S. companies, and the majority of those send goods to a single international market.

For investors who think that the surge in exports will continue, there are a number of interesting plays out there. The country's dependence on foreign oil and Chinese goods has been well documented, but few are aware of areas in which the U.S. is an active exporter. If Obama's NEI continues to make progress, the following ETFs could get a boost in the intermediate term:

  • Market Vectors Agribusiness ETF (NYSE: MOO): This ETF tracks the performance of the DAXglobal Agribusiness Index, a benchmark comprised of companies that generate at least half of their revenues from the business of agriculture. The U.S is one of the largest exporters of agricultural products, sending livestock, grains, and other food products to markets around the world. It's worth noting that only about 40% of MOO's assets are U.S. stocks; the remainder is spread across Canada, Singapore, Switzerland, and a number of other markets [see MOO vs. PAGG: Agribusiness ETFs Head-To-Head].
  • PowerShares Aerospace & Defense (NYSE: PPA): This ETF offers exposure to companies involved in the development, manufacturing, operations and support of U.S. defense, homeland security and aerospace operations. The U.S. is also a major supplier of aircraft and other industrial goods, and new trade deals could open up markets for components of PPA.
  • Semiconductor HOLDRS (AMEX: SMH): This fund, like most HOLDRS, is very concentrated; Intel, Texas Instruments, and Applied Materials account for more than half of total assets. Most investors think of Taiwan and South Korea as major exporters of tech devices, but the U.S. is a big player in this space as well. If barriers to trade continue to fall, components of SMH could be affected as well.
  • Dow Jones U.S. Pharmaceuticals Index Fund (NYSE: IHE): Much of the focus on the pharmaceutical industry has been on the impact of legislation pushed through earlier this year. But Big Pharma could also get a shot in the arm from increased import activity; domestic companies already generate significant overseas sales and could thrive from a more open environment.
  • Teucrium Corn Fund (NYSE: CORN): The U.S. is responsible for a significant portion of the world's corn output, exporting massive quantities of this agricultural commodity each year. If the current administration achieves its objectives, corn exports could surge even higher, potentially driving up prices [see What's Gotten Into The Corn ETF?]

Disclosure: No positions at time of writing.

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