The underlying index also implements a revenue-weighting methodology where revenues from all potential index companies are collected annually from company 10-Ks or equivalents, and those with at least 50% of gross revenues from water related activities comprise the “direct water exposure” segment weighted to represent 70% of the total and those with “indirect water exposure” will be weighted to represent 30% of the index.
“We believe that our fund offers the purest exposure to the water industry by tracking an index that incorporates fundamental weighting factors that recognize and adjust for the fragmented nature of the water space,” Matthew Weglarz, portfolio manager for the fund, said in a note. “The urgent need for investment in this essential asset, and the infrastructure that supports it, is becoming increasingly recognized and our fund provides a more direct way for investors to access the opportunity.”
TBLU’s sub-sector weights include 31% water management – 5% irrigation, 10% water efficiency and 16% water treatment, and 69% water infrastructure – 3% engineering & construction, 32% equipment and 35% water utilities.
Top holdings include Cia Saneamento Basico Sponsored 7.8%, American Water Works 7.6%, Aqua America 7.6%, Smith A O 7.4%, Xylem 6.9% and Muller Water 4.3%.
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