Global Water ETF: Investing in Rising Water Usage

Water scarcity is rising up the agenda as a major social and economic issue affecting the world's poor. Risks to grain harvests are rising due to the fact that 2.8-billion people live in areas of high water stress. The opportunity for greater water efficiencies is enormous in the developed world too and so is the investment opportunity.

The potential for efficiency gains in water transmission and use are enormous given that about half of water used for irrigation is lost to evaporation and waste, according to a report by the World Economic Water Initiative.

The reality is that water usage is rising all over the world. Changing diet patterns toward meat consumption doubles the need for water for production relative to a vegetarian diet. In the developed world, energy production accounts for nearly 40% of all water withdrawals and that need will grow by 50% by 2025 according to the World Economic Forum.

In the major cities of the world, a staggering amount of water is lost through transmission. In Paris, for example, more than 50% of water is reported to be lost through leakage in the pipes. In China, 60% of cities suffer water shortages and that problem will only grow as populations continue to urbanize.

Claymore S&P Global Water ETF (CGW) offers investors exposure to 50 companies on a global basis that are in water-related businesses. The Criterion Water Infrastructure Fund is more targeted to infrastructure, thus a little less watered down. This is a long term opportunity and investors should get invested now.