Energy Diversification

Water ETFs: Commodity or Infrastructure Investments?

There is a big difference between a water utility, and an equipment or chemicals company that sells to utilities. GE may be the largest water sector player, but water is a miniscule portion of its value.

ETFs seem to be a marketing-driven product, tapping investor interest in water while avoiding the discussion of key issues.

Higher infrastructure spending may negatively impact utilities, who are unable to pass higher costs on to customers.

From an environmental standpoint, these funds can be misleading. Utilities are huge users of groundwater. PICO is actually a water hoarding play in the Nevada desert.

Lumping all these companies together in an ETF shows a lack of focus.