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An exchange traded fund that invests in water resources stocks is up 14% so far this year.

"We need water for survival in its most basic definition, as well as for all our other needs such as industry, power and agriculture," Amy Hardberger, an attorney with the Environmental Defense Fund, a non-profit organization, said, reports Myra P. Saefong for MarketWatch.

"Water has been given special status in society," Hardberger said. "While we pay for water, we don't pay for its actual value. We pay for access to clean water."

Various water ETFs give exposure to just that - water filtration companies, water treatment, utilities, pipe and pump manufacturing - which is what supports potable water. In the U.S. alone, the cost to repair and expand the drinking water infrastructure may top $1 trillion in the next 25 years. These expenses will get passed onto the consumer through water bills and local fees.

PowerShares Water Resource Portfolio (PHO) focuses on water real estate, the water industry and utilities, respectively, as top holdings. The actual water investment is the fourth largest holding, at 13.8%. PowerShares Global Water Portfolio (PIO) focuses on water real estate, industrials and technology, respectively, with about 4% dedicated to water. The water-related ETFs heavily invest in industry and companies that support or relate to water, rather than the actual element.

"Most first world nations that have adequate water infrastructure take water for granted, even in drought states," such as California and Texas, Eric Meliton, an environmental industry analyst at Frost & Sullivan, said in the report. Water resources are "grossly undervalued compared to how much the treatment for both drinking water and wastewater costs in terms of infrastructure and operational expenses."

"As the world population increases, so does the demand for clean water. Global water consumption has increased nearly twice as fast as population growth in recent years. United Nations projections place global population growth at 30% by 2030, and as demand continues to grow accordingly, some projections place the water industry at a trillion-dollar market cap as early as 2020," Abraham Ballin for Morningstar wrote in an ETF analysis.

PowerShares Water Resource Portfolio

(Click to enlarge)

Tisha Guerrero contributed to this article.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Rising Tide: Water ETFs