(MENAFN - Baystreet) Donald Trump will begin his next four-year term as president next month, and his policies could have a significant impact on certain stocks. With the Republicans back in power and also controlling the House and Senate, the odds look high that there will be a lot of spending on defense in the near future.

One exchange-traded fund (ETF) which can be a potentially good play over the next four years as a result of this outlook is the iShares U.S. Aerospace & Defense ETF (CBOE:ITA). The fund holds many types of defense stocks in its portfolio, including big names such as RTX Corp (NYSE:RTX), Lockheed Martin (NYSE:LMT),and L3Harris (NYSE:LHX). The fund has a modest expense ratio of 0.40% and gives investors access to 35 stocks which could do well under a Trump presidency.

Year to date, the ETF has risen by 17% and it got a big bump from Trump's election win. That's a trend that could remain strong given the potential for the government to spend more heavily on defense and aerospace over the next four years.

At a time when many stocks may be trading at inflated values and running out of room to rise a whole lot higher, this ETF can position investors for some potentially strong gains over the next four years. Trump's policies can lead to some great growth opportunities for businesses involved in these sectors and rather than trying to pick individual winners, investors may simply be better off holding a basket of stocks through this ETF.

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