4 Water ETFs to Play Our Most Valuable Resource

Water is the world’s most valuable resource, used in nearly anything and everything you can think of. Investors who want to play the shortage of the commodity can easily do so with exchange traded funds (ETFs).

The state of the water industry at the moment makes it difficult for investors to single out a few good water stocks, so an ETF can make much more sense. Cheryl Hall for The Dallas Morning News reports that water is the third-largest industry in the world, but it remains fragmented and diverse. (For more information on water, click here).

A market basket approach makes the most sense. ETFs are highly transparent so you know what you’re getting, and the expenses are much lower than a typical mutual fund. You also get diversity within a sector. (Go here to read more about the benefits of ETFs).

The profitability aspect is something else. One could argue that the technology sector is more profitable and proven now, compared to the water industry and water-related ETFs. If you feel supply and demand is going to get more attention, you may be a little early, but from a long-term stance, looking at water might be worthwhile.

• PowerShares Water Portfolio (NYSEArca: PHO)

• PowerShares Global Water (NYSEArca: PIO)

• Claymore S&P Global Water (NYSEArca: CGW)

• First Trust ISE Water Fund (NYSEArca: FIW)
  

Comments

[User 479037:]

You gave us a list but what differentiates the players. Is there an emphasis on different aspects of the water Industry ? Is one heavily weighted in piping or infrastructure?

Why did you post this article?

Oct 08 06:03 PM

[mbkelly75:]

The list all by itself was more than I knew before I read the article. He has some good links in here to help with the DD. Do your homework. I will be doing mine.

Oct 08 06:41 PM

[ddrich:]

PHO has shown me that it's going to take awhile to deliver any real performance. Take a look at the names in the portfolio

Oct 08 09:19 PM