Water as an investment tool is still a relatively new concept, but exchange traded funds (ETFs) can help access and simplify the market.
There are talks about a profit bridge appearing as the stimulus dollars filter through the U.S. economy. Nick Hodge for Energy and Capital reports that $11 billion has been allocated to revamping the U.S. water supply, which could ultimately lead to a profit bridge.
The potential to profit from water comes from many areas, including:
- Drinking water infrastructure and the machines needed to make potable water
- Waste water infrastructure improvements and additions
- State-wide projects and funding for clean drinking water infrastructure projects
About $4 billion has already been delegated to water-related improvements in every state, with another $7 billion in the wings to go toward new water meters ad building more treatment plants.
ETFs are still the best way to access this sector, since trying to choose companies individually could be a time-consuming challenge for most investors.
- PowerShares Water Resources Fud (NYSEArca: PHO): up 18.2% year-to-date
- PowerShares Global Water (NYSEArca: PIO): up 32.5% year-to-date
- First Trust ISE Water Index Fund (NYSEArca: FIW): up 17.5% year-to-date
- Claymore S&P Global Water Index (NYSEArca: CGW): up 26% 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.