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2 Water ETFs to Know About
Gain investment exposure to substance vital for all known forms of life
Water is a substance that is vital for all known forms of living organisms. In late 2020, water futures based on the Nasdaq Veles California Water Index began trading on the CME. Water is essentially the most important commodity globally, so it makes sense that it is starting to gain more traction and interest from the investment world.
When it comes to us humans, water scarcity is a real, growing issue. Nearly two-thirds of the world’s population has been predicted to face water shortages by 2025. When it comes to the companies that are leading in water solutions today and will likely assist with making more of the Earth water drinkable, usable, and available over the next decade, the following are two ETFs that contain those companies:
1. First Trust Water ETF (FIW)
2. Invesco Water Resources ETF (PHO)
1. First Trust Water ETF (FIW)
FIW is an ETF that seeks to track the investment results of the ISE Clean Edge Water Index. The ISE Clean Edge Water Index is an index designed to track the performance of small-, mid-, and large-capitalization companies that derive a substantial portion of their revenues from the potable water and wastewater industry. Companies in FIW include Pentair, IDEX, Roper Technologies, and Essential Utilities. As of April 21st, 2021, FIW has a price of $81.95 and an expense ratio of 0.55%. Over the past five years, FIW has provided a total return of approximately 138% and an average annual total return of approximately 19%.
2. Invesco Water Resources ETF (PHO)
PHO is an ETF that seeks to track the investment results of the NASDAQ OMX US Water Index. The NASDAQ OMX US Water Index is an index designed to track the performance of companies that create products designed to conserve and purify water for homes, businesses, and industries. Companies in PHO include Roper Technologies, American Water Works, Xylem, and Danaher. As of April 21st, 2021, PHO has a price of $51.98 and an expense ratio of 0.60%. Over the past five years, PHO has provided a total return of approximately 128% and an average annual total return of approximately 18%.
You can gain investment exposure to one of the most vital substances on Earth. Water will always be needed. Will investing in an ETF such as FIW or PHO be the best choice for your long-term investment thesis? You have to decide that by conducting your research and due diligence.
