2 Mutual Funds To Benefit From America's Defense Resolve

President Trump’s huge defense spending bill, ever-growing geopolitical tensions, and America’s defense resolve should lead to gains for defense stocks in 2019. As a matter of fact, defense stocks have had a great run since Donald Trump’s ascension to the post of the United States’ President.

Moreover, Trump has allegedly asked his Defense Secretary to present a $750-billion defense budget proposal for fiscal 2020, per a report by Politico. Under such circumstances, adding mutual funds with significant exposure to defense companies seems prudent.

Humongous Defense Budget to Propel Gains for the Space

America’s defense sector has gained significantly from the Republican-controlled Congress’ humongous defense budget. Moreover, it goes without saying that GOP’s tax overhaul late last year also provided the sector the required stimulus for growth.

According to a Bloomberg report, the United States increased missile defense spending by 25% to $9.9 billion in the current fiscal year. Also, in September 2018 the Pentagon announced it would spend approximately $2 billion over the next five years on development of artificial intelligence (AI).

Interestingly, the removal of “sequestration" budget caps last year by the Congress has been a welcome relief for the sector. The amendment also lifted limits on defense spending that have been around since 2013. Finally, the most-recent defense spending bill was passed without any “continuing resolution,” which enabled companies to gauge their future sales better.

Space Might Soon Become Reality

As proposed by both Vice President Mike Pence and President Trump, the newest branch of U.S. military would be incorporated by 2020. The force would be officially called “Space Operations Force.” America is specifically interested in laying out a layer of sensors in space that can easily detect enemy strikes at the moment of launch.

Pence urged the U.S. Congress to earmark $8 billion over the next five years for the much-ambitious project. He also stated that a fully incorporated space force is going to cost much more.

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