5th World Water Forum Could Affect Outlook on Water ETFs

International dignitaries are planning to meet to determine global water policy, which could affect the outlook of global water-related ETFs.

In the 5th World Water Forum, more than 27,000 people from 120 or more countries will meet to discuss ways to adapt the water sector in the face of current global challenges including: climate change, lack of sanitation and a dearth of drinking water in many developing countries, along with increased demand for water for basic consumption and in water-intensive energy technologies, reports Lauren Morello for The New York Times.

Historically, water managers looked at records of streamflow, rainfall, and snowpack to determine if communities have enough water for everyday needs. Climate change is changing the regular patterns, which could mean more severe droughts or floods, and it is causing different melting periods for glaciers and snowpacks.

Periods of drought coupled with increased demand for water have been detrimental on all sources of water. The European Environment Agency released a report that states Europe is “living beyond its means” in regards to water use. It is predicted that climate change will create worsening conditions in water sources, along with more frequent and severe droughts across Europe.

These dire conditions could lead to more demand for the companies contained within the underlying indexes of water ETFs. Holdings consist of companies that focus on the provision of potable water, treat water, as well as technologies and services that directly relate to water consumption.

• PowerShares Global Water (PIO): down 0.4% for the last week; up 10.7% in the past two weeks
  

• PowerShares Water Resources (PHO): up 0.6% in the last week; up 4.1% in the last month
  

Max Chen contributed to this article.