Morningstar - Q3 2021 - 50

Strategies
Who Benefits From Infrastructure Plan?
Upside will be found among
nontraditional plays.
Research
57
Pros and Cons of Donor-Advised Funds
62 Do Low-Volatility Funds Deliver?
Quant U
64 A Ruler for Risk
Best Ideas
69 Manager: Bold Moves
70 Passive: A Smoother Ride
71
Equity: Nice Comeback
RESEARCH
David Sekera
This past spring, the White House proposed the
American Jobs Plan, a more than $2 trillion
infrastructure program. The plan would provide a
boost to a wide range of sectors, reinvigorating
both traditional infrastructure as well as
supporting new nontraditional infrastructure
programs. However, the plan's proposed increases
in the corporate tax rate would be a headwind
for U.S. markets.
As with any major initiative out of Washington,
D.C., this plan, along with other priorities
from the Biden administration, has been in intense
negotiations between the Democratic and
Republican parties. In addition, in a surprise move,
the Senate parliamentarian issued guidance that
essentially limits the Democrats to only one more
reconciliation bill this year, thus changing the
paths on how these initiatives will come to fruition.
While there are multiple routes the Democrats
could take, we expect they will lead to the same
place-the passage of most of the initiatives, just
at different times and in different manners.
With the U.S. market near its highs-and slightly
overvalued, in our view-many of the companies
that might be able to capitalize on the infrastructure
plan are either already fairly valued or
overvalued. Indeed, stock prices on the obvious
candidates have already run up. We think the most
opportunity can be found in sectors that are
not traditionally considered infrastructure plays.
Different Paths, but Same Endgame
The rule in Washington is that you should always
expect the unexpected, and this plan certainly
50
Morningstar Q3 2021
has been no exception. We had expected
that the Democrats would look to pass two budget
reconciliations this year-first, to address the
American Jobs Plan, and second, to address the
American Families Plan, which would expand
access to childcare and education. In reconciliation,
they can be passed in the divided Senate
with a simple majority and do not need to attract
Republican votes to overcome the filibuster.
However, we did not foresee that the Senate
parliamentarian would essentially limit the
Democrats to only one more reconciliation bill this
year. So, as of now, we see two potential
paths for Democrats to pass both the American
Jobs Plan and the American Families Plan.
The first path would be for Senate Democrats to
reach a bipartisan agreement with enough
Republicans to be able to bypass a filibuster and
bring a new bill to the floor to pass a substantial
amount of the American Jobs Plan. It would focus
on traditional infrastructure to be able to garner
bipartisan support. Then, the Democrats could use
the budget reconciliation process later this
year to address the nontraditional infrastructure
spending not included in the bill along with other
priorities, such as the American Families Plan.
If Democrats are unable to reach a bipartisan
agreement, then the second path would be
for them to lump both the Jobs Plan and Families
Plan together into a much larger reconciliation
and push it all through on a purely partisan basis.
So, Where Are We Today?
There has been a small working group of Democrats
and Republicans who have tentatively reached
an agreement on $1.2 trillion of spending, most of
which goes toward traditional infrastructure,
https://www.morningstar.com/authors/1514/david-sekera

Morningstar - Q3 2021

Table of Contents for the Digital Edition of Morningstar - Q3 2021

Contents
Morningstar - Q3 2021 - Cover1
Morningstar - Q3 2021 - Cover2
Morningstar - Q3 2021 - 1
Morningstar - Q3 2021 - 2
Morningstar - Q3 2021 - Contents
Morningstar - Q3 2021 - 4
Morningstar - Q3 2021 - 5
Morningstar - Q3 2021 - 6
Morningstar - Q3 2021 - 7
Morningstar - Q3 2021 - 8
Morningstar - Q3 2021 - 9
Morningstar - Q3 2021 - 10
Morningstar - Q3 2021 - 11
Morningstar - Q3 2021 - 12
Morningstar - Q3 2021 - 13
Morningstar - Q3 2021 - 14
Morningstar - Q3 2021 - 15
Morningstar - Q3 2021 - 16
Morningstar - Q3 2021 - 17
Morningstar - Q3 2021 - 18
Morningstar - Q3 2021 - 19
Morningstar - Q3 2021 - 20
Morningstar - Q3 2021 - 21
Morningstar - Q3 2021 - 22
Morningstar - Q3 2021 - 23
Morningstar - Q3 2021 - 24
Morningstar - Q3 2021 - 25
Morningstar - Q3 2021 - 26
Morningstar - Q3 2021 - 27
Morningstar - Q3 2021 - 28
Morningstar - Q3 2021 - 29
Morningstar - Q3 2021 - 30
Morningstar - Q3 2021 - 31
Morningstar - Q3 2021 - 32
Morningstar - Q3 2021 - 33
Morningstar - Q3 2021 - 34
Morningstar - Q3 2021 - 35
Morningstar - Q3 2021 - 36
Morningstar - Q3 2021 - 37
Morningstar - Q3 2021 - 38
Morningstar - Q3 2021 - 39
Morningstar - Q3 2021 - 40
Morningstar - Q3 2021 - 41
Morningstar - Q3 2021 - 42
Morningstar - Q3 2021 - 43
Morningstar - Q3 2021 - 44
Morningstar - Q3 2021 - 45
Morningstar - Q3 2021 - 46
Morningstar - Q3 2021 - 47
Morningstar - Q3 2021 - 48
Morningstar - Q3 2021 - 49
Morningstar - Q3 2021 - 50
Morningstar - Q3 2021 - 51
Morningstar - Q3 2021 - 52
Morningstar - Q3 2021 - 53
Morningstar - Q3 2021 - 54
Morningstar - Q3 2021 - 55
Morningstar - Q3 2021 - 56
Morningstar - Q3 2021 - 57
Morningstar - Q3 2021 - 58
Morningstar - Q3 2021 - 59
Morningstar - Q3 2021 - 60
Morningstar - Q3 2021 - 61
Morningstar - Q3 2021 - 62
Morningstar - Q3 2021 - 63
Morningstar - Q3 2021 - 64
Morningstar - Q3 2021 - 65
Morningstar - Q3 2021 - 66
Morningstar - Q3 2021 - 67
Morningstar - Q3 2021 - 68
Morningstar - Q3 2021 - 69
Morningstar - Q3 2021 - 70
Morningstar - Q3 2021 - 71
Morningstar - Q3 2021 - 72
Morningstar - Q3 2021 - 73
Morningstar - Q3 2021 - 74
Morningstar - Q3 2021 - 75
Morningstar - Q3 2021 - 76
Morningstar - Q3 2021 - 77
Morningstar - Q3 2021 - 78
Morningstar - Q3 2021 - 79
Morningstar - Q3 2021 - 80
Morningstar - Q3 2021 - 81
Morningstar - Q3 2021 - 82
Morningstar - Q3 2021 - 83
Morningstar - Q3 2021 - 84
Morningstar - Q3 2021 - 85
Morningstar - Q3 2021 - 86
Morningstar - Q3 2021 - 87
Morningstar - Q3 2021 - 88
Morningstar - Q3 2021 - 89
Morningstar - Q3 2021 - 90
Morningstar - Q3 2021 - 91
Morningstar - Q3 2021 - 92
Morningstar - Q3 2021 - 93
Morningstar - Q3 2021 - 94
Morningstar - Q3 2021 - 95
Morningstar - Q3 2021 - 96
Morningstar - Q3 2021 - Cover3
Morningstar - Q3 2021 - Cover4
Morningstar - Q3 2021 - M1
Morningstar - Q3 2021 - M2
Morningstar - Q3 2021 - M3
Morningstar - Q3 2021 - M4
Morningstar - Q3 2021 - M5
Morningstar - Q3 2021 - M6
Morningstar - Q3 2021 - M7
Morningstar - Q3 2021 - M8
Morningstar - Q3 2021 - M9
Morningstar - Q3 2021 - M10
Morningstar - Q3 2021 - M11
Morningstar - Q3 2021 - M12
Morningstar - Q3 2021 - M13
Morningstar - Q3 2021 - M14
Morningstar - Q3 2021 - M15
Morningstar - Q3 2021 - M16
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2021q3
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2021q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2021q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2020q4
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2020q3
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2020q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2020q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2019winter
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2019fall
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2019summer
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2019spring
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20191201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20181011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20180809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20180607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20180405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20180203
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20181201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20171011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20170809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20170607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20170405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20170203
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20171201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20161011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20160809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20160607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20160405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20160203
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20161201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20151011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20150809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20150607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20150405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20150203
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20151201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20141011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20140809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20140607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20140405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20140203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20141201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20131011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20130809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20130607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20130405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20130203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20131201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20121011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20120809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20120607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20120405
https://www.nxtbook.com/nxtbooks/morningstar/investorconference2012
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20120203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20121201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20111011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20110809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20110607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20110405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20110203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20111201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20101011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100809_lincoln
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100607_lincoln
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100405_lincoln
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20101201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20091011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20090809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20090607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20090405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20090203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008fall
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008summer
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2007spring
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2007fall
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2007summer
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008spring
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008catalog
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008winter
https://www.nxtbookmedia.com