Investors seeking a unique portfolio addition with strong return potential could consider investing in the water industry.
As one of the most important resources on the planet, purified water remains in demand across the globe. Findings from Precedence Research anticipate the size of the global water purifier market to grow to roughly $102 billion by 2032.
Getting ahead of the industry’s potential growth could provide strong returns down the line. The Invesco Water Resources ETF (PHO) can provide investors with exposure to major players within the water industry.
Focusing on Water Companies Within the Index
PHO is benchmarked to the Nasdaq OMX US Water Index and has a net expense ratio of 0.59%. The fund invests the majority of its assets into stocks and depositary receipts of water companies within the index. According to the fund prospectus, the index tracks companies that engage in the creation of water conservation and purification products for homes, businesses, and industries.
The fund employs a “full replication” methodology to track all of the securities within the underlying index. In doing so, the fund may concentrate investment into specific industries to mirror the index’s investment focus. Both the index and the fund are rebalanced on a quarterly basis.
Some of the major holdings within PHO could inspire investor confidence. Notably, Roper Technologies had a strong 2023, with revenue increasing by 15%. Ecolab reported strong 4Q2023 earnings, with reported sales jumping 7% compared to last year’s numbers. While Ferguson’s 2Q2024 results missed expectations, the company maintained confidence in both short-term and long-term growth.
PHO has maintained good performance results. The fund is up 9.95% over the last three months, while gaining 24.45% over the last 12 months. PHO currently oversees about $2.1 billion in assets under management.
Invesco has 221 ETFs currently listed in the United States. These funds represent over $513 billion in assets under management.
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