Why Water ETFs May Flourish | ETF Trends

One of the world’s most valuable resources, water, is the third-largest industry worldwide. The industry, along with the exchange traded funds (ETFs) that track it, may have a bright future.

From a supply and demand perspective, demand for water far outweighs supply.  The World Health Organization (WHO) estimates that 1.1 billion people don’t have access to improved drinking water and 2.6 billion live without proper means of sanitation.  To put in into perspective, China accounts for 22% of the world’s population and only 8% of its water, states Loyd Eskildson of Basil and Spice.

Global warming will only add to the world’s water problems because of more flooding in some areas, which will result in the spread of fertilizer and sewage. Other areas will be hit by drought.

For these reasons, some believe that water-related clean-tech companies are the way to go.  One venture capital firm, Kleiner, Perkins, Cauflied & Byers, has made its first major significant investment into Applied Process Technology (APT) which makes water remediation technology that removes agricultural nitrates from well water, reports Camille Rickets of Green Belt.

Europe has been leading the pack in the water space for a while now, while the United States has opted to focus cleantech investing on renewable energy sources, transportation applications and the smart grid.

  • PowerShares Global Water Portfolio (PIO):up 19.8% year-to-date