Tapping a Different Type of Water ETF

The water investment thesis has been validated in recent years and several exchange traded funds reflect as much. The Summit Water Infrastructure Multifactor Exchange Traded Fund (NYSEArca: WTRX) is one of the more unique options among water ETFs.

WTRX launched in August as the first smart beta alternative in the water ETF space. WTRX follows the Summit Zacks Global Water Index, which provides exposure to 30 to 50 companies engaged in the global water industry.

Specifically, the underlying index will utilize a rules-based indexing methodology to incorporate fundamental factors that have been strong historical indicators of the long-term performance of water equities.

To be included in the underlying benchmark, companies have to be listed on a global stock exchange, have a market capitalization of no less than $200 million and have a three-month average daily trading value greater than $400,000.

“I like the asset class and believe it is a viable long term theme that will be around for generations. I am also a fan of focusing on the fundamentals for the constituents that make up the portfolio,” according to a Seeking Alpha analysis of WTRX. “The fund’s expense ratio is a bit on the higher side, however it is inline with other active or smart beta investments.”