ETF Trends
ETF Trends

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:

  • Claymore S&P Global Water (CGW)
  • PowerShares Global Water Portfolio (PIO)

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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.