The numerous water focused exchange traded funds (ETFs) actually give investors a play in two areas. From one perspective, water can be an infrastructure investment and from another, it can be a commodities play.
Gary Gordon for ETFExpert says that an argument for investing in water is that it is the most precious of all commodities on an international level. People need to drink clean water, and water is needed for crop irrigation in oder to produce food.
PowerShares Water Resources Portfolio (PHO) is actually an investment in infrastructure, Gordon says. The idea incorporates everything a society may do to use electricity, roads, communication networks, water transportation and the creation and maintenance of sewage systems. Equal weighting of small and mid cap companies make it a quick growth investment.
The Claymore S&P Global Water Index Fund (CGW) is an attempt to capture the global demand for the precious natural resource.
First Trust ISE Water Index Fund (FIW) plays on the idea that drinking water and waste services are in high need and will continue to grow.
Be sure to look closely into what each fund actually represents.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.