May 18, 2008 at 1:00 am by Tom Lydon
One of the larger components of a water exchange traded fund (ETF) is actually better known for its creation of technology for modern warfare.
ITT (ITT) also derives 39% of its revenue from the water industry, reports Rob Wherry for Smart Money. The company is 3.8% of PowerShares Water Resources (PHO).
The company recently illustrated just how important and vital water is to nearly everything we do. It takes 62,000 gallons of it to make a ton of steel. The average automobile requires 39,000 gallons during manufacturing. 3,000 gallons are needed to produce a single semiconductor.
A global shortage of water coupled with the need in nearly every industry means that the resource is beginning to capture the attention of investors. Water has its own problems, though: it’s heavy and expensive to transport it and it’s full of political potholes.
Many investors and advisors are wisely looking to ETFs instead of trying to pick individual stocks. Some of the companies in the water ETFs actually derive just a portion of their revenue from water, so if the entire sector turns into a slip n’ slide, your portfolio won’t.
Other water-focused ETFs:
Tags: Material ETFs, Sector ETFs, Steel, Water
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