Liquid Gold: Clean Water Funds Attract Interest
Liquid Gold: Clean Water Funds Attract Interest.
Money is being poured into the clean water industry, but few on Wall Street seem to be talking about it, with larger concerns over oil, gold and other commodities.
Richardson says there’s an increasing gap between supply and demand in the water sector, along with "increasing climate disruptions and extreme weather events that require substantial investments in water treatment technologies and distribution infrastructure."
"Plus, domestically, President (Donald) Trump has labeled poor water quality as a major issue and a priority to be addressed, and so we’re seeing a lot of opportunity for investors both in the U.S. and abroad."
On a global basis, water demand is also surging due to population growth and changing diets, says Doug Morrow, associate director at Sustainalytics, an ESG research firm that tracks environmental and industrial water issues.
Against this backdrop, Morrows says his firm’s research found that more than 40 percent of researched companies in the food products, semiconductors and utility industries have a poor water management program, despite the large water requirements of these industries.
Currently, there are exchange-traded funds that will enable liquid-minded investors to do just that.
The fund tracks the price and yield of the ISE Water Index, a benchmark industry index.
Another, even larger water-themed fund is PowerShares Water Resource Portfolio ETF ( PHO), a fund with $750 million in assets under management which closely tracks the Nasdaq OMX US Water index.
The fund, which is trading at $27 per share, is also up 6 percent on a year-to-date basis, and is up almost 20 percent on a 12-month basis.