Since many of us may be attending Memorial Day weekend pool parties (I know that I am, sponsored by one Scott Freeze, CEO of Street One Financial this coming Sunday), so why not cover the “Water” category within U.S. listed ETFs today?
There are four products within this niche, the largest being PHO (PowerShares Water Resource Portfolio, Expense Ratio 0.61%), which debuted back in December of 2005 and has gathered $879 million year to date in terms of assets under management. CGW (Guggenheim S&P Global Water, Expense Ratio 0.65%) debuted a couple years later and is the second largest play in the category, with about $384 million in assets under management.
PowerShares’ other offering PIO (Global Water Portfolio, Expense Ratio 0.82%) is substantially smaller with $286 million in AUM, and followed by a First Trust fund FIW (ISE Water Fund, Expense Ratio 0.60%) that has just shy of $200 million in assets under management.
So all four of these funds have some investment interest clearly, and are likely used by ETF strategists, investment managers, and select institutions whom are looking for specific exposure to companies that operate in the “Water” space in terms of “processing and distributing it”.
According to ETFdb.com, “Water Equities ETFs invest in companies that process and distribute water. As arguably the most important resource on the planet, water equities have garnered much investor attention, as they grant exposure to a commodity with a completely inelastic demand.”
When it comes down to selecting a specific “Water Equity” ETF, the four listings of course differ via which index they track. PHO tracks the NASDAQ OMX U.S. Water Index, and has almost exclusive U.S. exposure (96% of the portfolio with a token 4% international exposure), while CGW tracks the S&P Global Water Index. PIO as its name suggests is also
“global” in nature while FIW is largely U.S. equity slanted.