Two Water-Focused ETFs Highlighted by Climate Change

This article was written in English on 02.04.2021, translated and published on this site.

Water is an essential component of all life on earth. News about the effects of water scarcity on human life and nature and floods are regularly brought up and we celebrated World Water Day on 22 March. According to National Geographic:

“Humanity faces a growing challenge, created by an excess of water in some regions and scarcity of water in other regions.”

According to the study led by Rajibur Reza of Griffith Business School:

“Currently, 20% of the world’s population … cannot safely access drinking water, and about 2.6 billion people live far from basic sanitation … More than 4 billion people, almost half of the world’s population, by 2050 have chronic water problems. It is expected to live in countries with scarcity. “

In other words, the uneven distribution of water globally has made clean drinking water a valuable commodity in some parts of the world. As a result, the economic dimension of water has also gained importance in recent years.

For example, Wall Street has developed water-focused exchange-traded funds. Earlier Invesco Water Resources ETFWe have reviewed (NASDAQ :). Today we will introduce two other funds that may be of interest to our readers.

1. First Trust Water ETF

  • Current Price: $ 78.93
  • 52-Week Range: $ 44.00 – $ 78.99
  • Dividend Income: %0,50
  • Cost Rate: %0,54
First Trust Water ETF (NYSE 🙂 offers access to companies that derive the bulk of their revenue from the portable and wastewater industries. Since it started trading in May 2020, the fund’s net assets have reached $ 821 million.
FIW Weekly Chart

FIW, with 36 shares, follows the ISE Clean Edge Water Index. The top 10 companies make up about 40% of the fund. On a sectoral basis, industrial products and services take the first place with 56.82%, followed by public services (21.58%) and health services (11.56%).

Focused on water quality systems and filtration solutions Pentair (NYSE :); offering products and services for water testing in addition to other markets IDEXX Laboratories (NASDAQ :); and measurement and analysis solutions Roper Technologies (NYSE 🙂 is one of the leading names in the fund.

The fund has risen over 8% so far in 2021 and reached a record high on April 1. The price-earnings and price-book value ratios for the last 12 months point to an extremely high valuation of 35.52 and 3.92 respectively.

Many of the names in FIW will publish their quarterly results in the coming weeks. Therefore, volatility and profit sales are likely to be seen. A potential decline towards the $ 75 level or below will offer a better margin of safety.

2. Invesco S&P Global Water Index ETF

  • Current Price: $ 49.72
  • 52-Week Range: $ 30.98 – $ 49.67
  • Dividend Income: %1,33
  • Cost Rate: %0,57
Invesco S&P Global Water Index ETF (NYSE 🙂 invests in global companies operating in different industries such as water utilities, infrastructure, equipment, devices and materials. The fund started trading in May 2007 and has a net worth of $ 49 million.
CGW Weekly Chart

Following the S&P Global Water Index, CGW has 50 assets. On a sectoral basis, industrial products and services have the largest weight with 47.86%, followed by public services (41.28%) and information technology (6.03%).

The top 10 companies make up about 38% of the fund. More than 51% of the companies in the fund are based in the USA. The USA is followed by the UK, France, Switzerland and Canada. Pumping equipment manufacturer Xylem (NYSE:); Pentair (NYSE :); Swiss manufacturer of sanitary ware Geberit (OTC 🙂 is one of the leading names of the fund.

The ETF has yielded close to 6% since the beginning of the year and reached a historic high on April 1. The last 12 months price-earnings and price-book value ratios are 30.37 and 2.90, respectively. Potential long-term investors will find a better value around $ 45.

Note: If you are interested in the financial products mentioned above but cannot find these products in your area, you may want to contact your brokerage firm or financial planner.

You can contact me for any questions or comments.

Editor’s Note: Not all assets analyzed may not be available in all regional markets. Please contact an authorized brokerage firm or financial advisor to find similar financial instruments that may suit you. This content is for informational purposes only. Before making any investment decision, you should do your own detailed research.

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