Water related investments

One of the key investment themes these days is around environmental sustainability. Within that sector, there is a lot of attention to renewable energy such as Solar. Solar related ETFs such as ICLN, TAN are doing extremely well this year.

But a parallel theme around sustainable energy is water. Clean water, just like clean air, is somehow ignored by people because it is supposedly abundant on earth. 70% of the earth is covered by ocean, so how could we have water problems? Yet, if we dig deeper into water usage patterns, we actually see water scarcity could become a big problem. Water scarcity is the lack of sufficient available water resources to meet the demands of water usage within a region. It already affects every continent and around 2.8 billion people around the world at least one month out of every year. National Geographic has an article recently with the title “Why is America running out of water?“.

While most of the general public does not seem to care about this topic yet, maybe it is a good time to look at some of the investments in this space.

Here are some water ETFs. FIW performs the best in the last 10 years with CAGR of 13%+, CGW is above 10%+ and PIO is above 7%+. FIW has a better Sortino ratio as well.

  • Invesco S&P Global Water Index ETF (CGW) – $700M+ AUM
  • Invesco Global Water Portfolio (PIO) – 200M+ AUM
  • First Trust ISE Water Index Fund (FIW) – 500M+ AUM

If one is a mutual fund investor, here are a few fund choices

  • AllianzGI Water Fund (AWTAX, AWTCX, AWTIX)
  • Calvert Global Water Fund (CFWIX, CFWCX, CFWIX)
  • Fidelity┬« Water Sustainability Fund (FLOWX)

Fidelity® Water Sustainability Fund is a new fund that makes it hard to analyze its performance. Between AllianzGI Water Fund and Calvert Global Water Fund, AllianzGI Water Fund performs better in the last 10 years with CAGR of 7.8%+, compared to Calvert Global Water Fund with a CAGR of 4.6%+.



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