Component holdings will include those engaged in water-related businesses, such as delivering water-related products or services in the industrials, utilities and energy sectors, which include the following: water-related pumps, pipes, valves, filtration, treatment, storage, water rights, chemicals, delivery (utilities), desalinization, ultra-purification (in the manufacturing process or medical equipment), ballast water (ship water treatment), plumbing, water efficiency and metering.
Top holdings include EnerCare 5.7%, GWA Group 5.4%, Polypipe Group 5.0% Hyflux 4.5% and ANDRITZ AG 4.5%. About 35% of the portfolio will be allocated toward water utilities and 65% will lean toward water industrials segment.
Furthermore, the underlying index selects components based on three factors. For water utilities, the smart-beta methodology selects holdings based on low price-to-earnings ratios, low EV/EBITDA and high return on equity. For water industrials, the index targets those with low P/E, high gross margin and high return on invested capital.
SEE MORE: Water ETFs Are Making a Big Splash
WTRX will be competing against four other water-related ETFs on the market. The First Trust ISE Water ETF (NYSEArca: FIW) and PowerShares Water Resources Portfolio (NYSEArca: PHO) both track U.S. companies that derive their revenue from products that conserve and purify water. The Guggenheim S&P Global Water Fund (NYSEArca: CGW) and PowerShares Global Water Portfolio (NYSEArca: PIO) both track companies that are associated with global water utilities, infrastructure, equipment, instruments and materials.
For more information on new fund products, visit our new ETFs category.