Water wouldn’t rank near the top of the most exciting investments, but forecasts are calling for it to be a profitable one. Water exchange traded funds (ETFs) are a great way to get exposure to this unique commodity.
The water bulls are out in force with their reasons for why this commodity could surge over the next several years:
- Michelle Lodge for CNBC reports that the pricing metrics for water are going through shifts. Water will be priced on a real cost basis, which is what it costs to find it, treat it, and then deliver it—and that isn’t the way it has been done historically. [Do Water ETFs Have A Place In Your Portfolio?]
- There are populations shifting to areas that don’t have a ton of clean, drinkable water to spare, which will have a hand in changing how water is priced, as well.
- Bryan Murphy for SmallCap Network reports that local and state governments have been generous with their water utility providers throughout the recession and they continue to be. [Water ETF: New Index Helps Manage Risk.]
- Water companies have enjoyed consistent growth since 2007, even through the recession.
There’s clearly a long-term case to be made for water these days as this precious resource becomes more and more scarce; ride along with one of these funds:
- PowerShares Water Resources Portfolio ETF (NYSEArca: PHO)
- PowerShares Global Water Portfolio ETF (NYSEArca: PIO)
- Guggenheim S&P Global Water Index (NYSEArca: CGW)
- First Trust ISE Water Index Fund (NYSEArca: FIW)
Tisha Guerrero 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.