Water is one of the most important and necessary resources in the world – so why are exchange traded fund (ETF) investors having such a hard time making gains that are more in line with the soaring demand?
First Trust ISE Water (FIW) is down 6.4% year-to-date; PowerShares Global Water (PIO) is down 8.6% year-to-date; PowerShares Water Resources (PHO) is down 10.2% and Claymore S&P Global Water (CGW) is down 9.6%. Other scarce commodities, such as oil and wheat, are at record prices. What gives?
The fact of the matter is, water isn’t like other commodities.
More than one in six people lack access to safe drinking water. The cost of treating and purifying water amounts to hundreds of billions each year. And access to clean water has been hurt by population growth and competition from industry and agriculture, say Carolyn Cui and Ann Davis for the Wall Street Journal.