ETF Trends
ETF Trends

What’s been flowing within the water industry during the past year of market and exchange traded fund(ETF) ups and downs?

A new report from TechKNOWLEDGEy Strategy Group takes a look at the state of the water industry, and there are some opportunities knocking if you look in the right places. TechKNOWLEDGEy Strategic Group (TSG) is a Colorado-based independent investment banking and management consulting firm that evaluates and takes action upon growth strategies within environmental industries.

The group reports that the year 2008-2009 could be looked upon as a turning point within the water industry. There is a changing in the mindset of every U.S. citizen and a transformation in American politics as well as interest in environmental and energy policy.

Among the recent trends in the water industry the report mentions are:

  • Water investments will gain attention as the economy falters. Water is beginning to be recognized as an alternative store of value, and water won’t be as badly affected by the crisis as other investments.
  • There will be a renewed focus on the environment. There is heightened interest in water and the environment overall, thanks to the Obama administration. The industry is eagerly watching for what affect the stimulus plans will have on the industry over the next few years. Our water infrastructure is dilapidated.
  • Water and global food production will get more attention. Food prices are rising quickly, causing many to take a look at how we’re using water. Are we being efficient? Could we be doing better?
  • Water to make oil, and vice versa. Where water and energy intersect, there are challenges. It takes water to produce energy, and energy to treat and move water around. Demand for one could cripple the other.
  • There could be more consolidation of municipal water and wastewater facilities in the future.

It is no secret that water is an essential part of everybody’s daily life and crucial for our existence. Water has since been recognized as a valuable commodity, and there are broad and specific ETF products for investors to harness the opportunity to invest in this resource. The following ETFs also function as a means for investors to gain exposure to the various roles that water plays: industry function, politics, worldwide health, value within the global financial infrastructure.

The full report can be viewed here.

  • PowerShares Global Water (PIO): down 8.5% year-to-date

  • Claymore S&P Global Water (CGW): down 9.5% year-to-date

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.