Don't Take Clean Water for Granted: Introducing the 'AQWA' ETF

Clean water might often be taken for granted, but its preservation is essential—hence the importance of clean water technology companies found in the holdings of the Global X Clean Water ETF (AQWA).

While clean water may be abundant in certain countries, there are still threats that exist all over the globe.

“Climate change, global conflict and overpopulation are just some of the factors that are devastating the water supply in many areas around the world. It means that two billion people – one-quarter of the human population – are without access to safe drinking water,” a BBC article said. “As the world’s population creeps ever closer to eight billion, attention is being focused on developing technologies that can help address this before it is too late.”

AQWA seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Global Clean Water Industry Index. The fund invests at least 80% of its total assets, plus borrowings for investments purposes (if any), in the securities of the underlying index and in ADRs and GDRs based on the securities in the underlying index, which is designed to provide exposure to companies that have business operations in the provision of clean water.

While the majority of its holdings reside in the United States, AQWA also provides global diversification with exposure to other countries. That list includes Britain, France, and Japan to name a few.

Benefits of AQWA:

  • Long-Term Growth Potential: AQWA enables investors to access long-term growth potential through companies at the leading edge of the clean water theme.
  • Unconstrained Access: AQWA’s composition transcends classic sector, industry, and geographic classifications.
  • A Conscious Approach: AQWA incorporates Environmental, Social, & Governance (ESG) screens and follows ESG proxy voting guidelines to affect positive change alongside financial returns.

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A Strong Start Out of the Gate

AQWA is off to a strong start since its inception back in April, rising to a 9% gain in the previous chart. As if often the case, its strength can be traced back to its largest holdings—Xylem Inc and American Water Works Co—both comprising about 17% of the fund as of June 30.

The former is up 24% year-to-date while the latter is up about 11%. AQWA is also a prime play for investors looking to get niche exposure to environmental, social, and governance (ESG) investing.

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