Will water become the blue gold of the next generation? Water exchange traded funds (ETFs) have made taking advantage of the government’s stimulus plan to solve the water problem infinitely easier.
With $15 billion in stimulus money flowing into the $400 billion water market, many are wondering what the ultimate impact is going to be. Water market experts feel that it could make the industry attractive to investors.
Michael Szabo for Reuters reports that other factors supporting a water investment include:
- Growing water scarcity
- Soaring water demand, because of growing populations and higher living standards
- Climate change
Stimulus money in other countries has also been deployed to the water sector, as well. In the past, firms such as General Electric (GE), 3M (MMM) and Siemens (SI) have actively invested in companies that monitor, manage and improve water supplies. Now government stimulus cash is delivering the latest boost.
Meanwhile, cost-effective strategies are being developed through the latest technologies and metering water use, treating waste water for reuse and desalinating sea water are high on the list of possibilities.
ETFs that access these areas of water investment:
- PowerShares Water Resources (PHO): down 4.9% year-to-date
- PowerShares Global Water Portfolio (PIO): up 8.1% year-to-date
- Claymore S&P Global Water Index (CGW): up 4.3% year-to-date
- First Trust ISE Water Index Fund (FIW): down 3.6% year-to-date
For more stories about water, visit our water category.
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.