As you likely know, the Biden Administration is at loggerheads with congressional Republicans over the size and scope of a national infrastructure-improvement plan, observes John Bonnanzio, fund expert and editor of Fidelity Monitor & Insight.

As of this writing, the GOP says it’s willing to spend $928 billion but limit that spending to physical improvements, repairs and expansions to roads, bridges, railways, water-ways, airports, etc.

Conversely, President Biden’s plan reaches well beyond infrastruc-ture to include social spending pro-grams such as child care. His pack-age initially carried a price tag of $1.7 trillion with an estimated $621 billion in actual infrastructure spending.

Regardless of the final number, it will be big. That has prompted some readers to ask us if Fidelity Infrastructure Fund (FNSTX) stands to benefit from all this federal largess.

At the very least, Infrastructure certainly has the right-sounding name. However, its mandate is to invest in infrastructure companies — the businesses who actually own and/or operate the nation’s airports, electric utilities, oil and gas transmission lines, etc.

Yes, they will eventually benefit from this spending. But they will not be either the biggest or most immediate beneficiaries. The biggest winners will likely be those companies whose employees wear hard hats.

Unfortunately, that’s a small piece of Infrastructure’s assets, and it’s largely outside the fund’s investment mandate. That said, Manager Pranay Kirpalani does emphasize renewable energy, 5G networks and cloud computing. But collectively, they’re small positions (see pie chart below).

pie chart

There are, however, alternatives to Infrastructure (though we would not rush out to buy any of these funds based solely on government spending).

They include several Select funds within Fidelity’s industrials group (Environmental & Alternative Energy, Industrials and Transportation), Chemicals and Materials from their materials group, and two tech funds: Communications Equipment and its distant cousin Communication Services.

With that in mind, here are our picks that stand to benefit directly from the spending bills now being proposed:

Fidelity Select Environment & Alternative Energy (FSLEX) —

Clean energy initiatives abound in the Biden proposal including $100 billion to support clean energy manufacturing.

Fidelity Select Industrials (FCYIX) —

It’s likely that many of this fund’s 52 holdings may benefit from proposed infrastructure improvements. From industrial machinery makers to building products and especially construction machinery and trucks, this mid-cap blend fund is uniquely suited to the task at hand.

Fidelity Select Materials (FSDPX) —

This fund’s 9% stake in construction materials is just the tip of the iceberg in terms of the products its portfolio holdings are likely to sell if America’s rebuilding program, well, materializes. From industrial chemicals and gases to copper, steel and forest products, this fund could get an added boost to the wind at its back.

Fidelity Water Sustainability (FLOWX) —

Rebuilding the country’s aging water supply network appears to have bi-partisan support. This fund’s charter and current holdings seem tailor-made to benefit from the president’s plan to spend $11 billion in that area alone.

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