In the latest Bond movie, Quantum of Solace, the bad guy tries to exploit Bolivia’s water supply. Fortunately for Bolivia, Bond saves the day. In reality, the entire globe is facing a water crisis that may prove to be the greatest health problem the modern world has yet to face. If humanity prevails, water exchange traded funds (ETFs) could be left in a solid position.
According to David Fessler of Investment U, water pipes across the United States are bursting at a rate of nearly one per minute. That equates to 540,000 bursts per year. If you include drippy faucets and leaky pipes, all told, the United States is losing about six billion gallons of fresh water every day.
One of the main problems is that the water pipe infrastructure is getting way too old. In many of the major cities like D.C. and Chicago, the age of pipes stretches back 80 to 100 years. In Boston and New York, you can even find 200-year-old wooden pipes! [Your Guide to Green ETFs.]
The American Society of Civil Engineers forecasts the cost for upgrading the water infrastructure at $14 billion for potable water systems and $19 billion for sanitation systems. In addition to material cost, imagine all the havoc that will ensue when cities have to tear up streets and disrupt traffic.
Worse, cities are underfunding water budgets at an estimated $5 billion per year. Sooner or later, the United States is going to have to face its looming problem. [Water ETFs Are Sitting Ducks.]
Fortunately, there are a number of companies trying to tackle the problem head-on. One such company is TaKaDu of Israel that develops software to monitor water infrastructure systems, allowing utilities companies to proactively deal with potential pipe bursts.
In short, water is the new gold and ETFs are a direct way to bank on that potential.
For more stories on water, visit our water category.
- PowerShares Water Resources (NYSEArca: PHO)
- PowerShares Global Water (NYSEArca: PIO)
- Claymore S&P Global Water (NYSEArca: CGW)
Sumin Kim contributed to this article.
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.