Water has become so scarce that it is now being called a commodity- and there are even exchange traded funds (ETFs) that give investors exposure to it. Companies are hoping to take advantage of shortages in clean water. John Waggoner for USAToday reports there are various reasons water is an investment opportunity, including the fact 450 million people in 29 different countries suffer from water shortages. Also, 20% of people in the world lack access to safe and clean drinking water. By 2025, it is projected that 28 billion people will live in areas with scarce water sources.

One way to play this drought is with the PowerShares Water Resources (PHO) which has assets reaching $1.7 billion in just 2 years. The companies in this ETF are involved with the treatment and technology of potable water.  Another liquid ETF is the Claymore S&P Global Water Index Fund (CGW). CGW follows the performance of 50 global equity securities from developed markets of companies that are involved in water-related businesses.

While you are fishing for an investment in water, use caution as there is no lifeguard on duty. Water is a specialized sector so these do your scouting and make sure it fits in your portfolio.

Tags: Commodity ETFs, Sector ETFs, Water