Chart of the Day: Water ETFs

August 17th at 10:46am by Paul Weisbruch, Street One Financial

With our focus yesterday on infrastructure-based exchange traded funds and the obvious implications on many emerging economies, we also note that the importance of the availability of clean water and industries centered around the treatment and transportation of water is pivotal in the build-outs that many of these countries and regions are currently undergoing.

The presence and availability of clean water has also taken on a major importance in developed nations including the U.S. for instance. This said, there are a handful of “water” based equity ETFs on the market that may find a place in investor portfolios.

First Trust ISE Water (NYSEArca: FIW) invests in equities that “derive a substantial portion of their revenues from the potable and wastewater industry.” Top holdings include Nalco Holding, Aqua America, and American Water Works.

Guggenheim S&P Global Water (NYSEArca: CGW) on the other hand delivers exposure to equities involved in water utilities and infrastructure, and PowerShares Water Resource (NYSEArca: PHO) invests in equities that focus on the provision and treatment of water as well as water consumption related services.

Finally, PowerShares Global Water (NYSEArca: PIO) has considerably more global exposure than some of the other ETFs, investing in local ordinary shares of companies such as Kemira Oyj, Organo, and Hyflux Ltd to name a few.

Since each of these water based index methodologies have subtle nuances and differences in index construction and objectives, it would make sense for the portfolio manager to dig deeper in deciding which one, or which combination of these funds may be a potential fit. In the trailing one year period, CGW has returned 10.91%, followed by FIW up 10.88%, PHO (+8.83%), and PIO (+2.96%).

First Trust ISE Water

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