This, too, is an index fund, tracking the Nasdaq OMX Global Water Index. About 55% of fund assets are based in the U.S., followed by the U.K., Switzerland, and Japan. The fund also has exposure to emerging markets, including China and Brazil. Water is one of the planet’s most coveted and widely used resources. Like other commodities, such as oil and gold, water assets can add significant diversification to any portfolio. Online brokers can help you find and trade stocks at the click of a button.
This asset class offers numerous benefits such as diversification, passive management, and low expenses. However, leveraged ETFs are complex financial instruments that carry significant risks. Certain leveraged ETFs are only considered appropriate for experienced traders. To learn more about ETF trading, read our guide on “how to invest in exchange-traded funds”. Water stocks are stocks of companies whose business is closely tied to irrigation, utilities, water treatment, or other water-related industries.
One can invest in these by buying the stocks of individual companies, or by investing in a mutual fund or ETF with high exposure to water stocks. First Trust Water ETF is a great option for those who want to get started on water investments but want to maintain a wide range of options. This ETF has 36 water stocks that cover mainly wastewater and potable water companies. More than 500 million in assets are managed by FIW with a 47% exposure in the industrials sector alone. Kimberly-Clark Corporation has an expected earnings growth rate of 14% for the current year.
By investing in water stocks, investors can contribute to addressing this global challenge while potentially earning attractive returns. The potential for growth in the water sector is significant, making it a lucrative opportunity for investors looking for sustainable investments. With the right research and analysis, investors can make informed decisions and capitalize on the potential of water stocks in the U.S stock market. These water stocks and ETFs focus on a precious resource while offering investors a steady dividend drip.
Higher interest rates to tame elevated inflation also dented consumers’ confidence. Kimberly-Clark Corporation is principally engaged in the manufacture and marketing of a wide range of consumer products around the world. CWCO also focuses on expanding operations in areas with a large proportion of tourist properties and a growing population.
Water stocks to watch in 2023
But much of the world’s existing water infrastructure is aging and in need of replacement or modernization. Looming above all is climate change, which poses a threat to freshwater supply. Extreme weather events are already affecting the reliable availability of water.
- Investing in water stocks and ETFs that focus on this precious resource can offer investors a steady dividend drip while supporting sustainable water management initiatives.
- You may decide to invest only a fraction of your total in water stocks, and invest in other sectors to diversify your portfolio.
- CEO Kenneth Bockhorst says “demand trends remain healthy” for 2023.
- York Water specializes in wastewater management, water-related services, and the production of clean drinking water.
- Looming above all is climate change, which poses a threat to freshwater supply.
Other alternatives include the Invesco Global Water Portfolio ETF (PIO), which tracks the Nasdaq OMX Global Water Index, and the First Trust ISE Water Index Fund (FIW). The Impact Investor is a blog focused on helping retail investors find ESG, socially responsible, and impact investment opportunities through our expert insights, tips, and blog posts. As far as stocks go, it is not limited to California as the company also services Hawaii, Washington, and New Mexico. When it comes to investing in water, it is always preferable to offer a broad range to maximize gains, and this water ETF does just that. Over the last three cycles, this ETF has shown positive gains and is set to continue its upward trend. According to recent research, there is a prediction that as many as two-thirds of the world will be facing a shortage of freshwater by 2025.
Since 1988 it has more than doubled the S&P 500 with an average gain of +24.17% per year. These returns cover a period from January 1, 1988 through September 4, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month.
The State of the Water Industry
Areas that have experienced a lack of H2O include China, Egypt, India, Israel, Pakistan, Mexico, most of Africa, and the United States (Arizona, New Mexico, California, and West Texas), to name but a few. It also invested in upgrading its utility plant infrastructure, which has helped it serve its customers better. Their products are sold both locally and internationally, which increases their drawdown forex overall growth potential. In the first quarter alone their profits rose by 3%, which may not seem like much, but it is a solid gain expected to persist year over year. They are currently seeking investments to improve and expand their current offerings and replace outdated equipment with modern, eco-friendly options. The world has a lot of water, but very little of it is actually consumable.
California Water Service Group (CWT)
We’ve eliminated the landline expenses and are amazed by the increases in the water bill, a cost we didn’t consider decades ago. Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data. Beyond that, they aren’t cheap, both charging more than 0.50% for concentrated indexed portfolios with fewer than 40 positions. That may be close to the going rate for thematic index ETFs, but with more than $1 billion in assets each, both should be cheaper.
Our Selection Criteria Of the Best Water Stocks & Water Companies To Invest In
It’s a concentrated fund, with its top five holdings accounting for 41% of assets. On November 15, 2021, President Biden signed into law forex vs stocks which is more profitable the Infrastructure Investment and Jobs Act. The legislation will also invest in water infrastructure to eliminate lead service pipes.
Water utilities are generally part of a stable and much less volatile sector, which could be why they’re attractive to some long-term investors and position traders. Colgate-Palmolive Company has an expected earnings growth rate of 6.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last 60 days.
They also deliver water sanitation products and services to residential communities and commercial businesses. The MSCI Global Sustainable Water Index provides another look at the water Video game stocks industry from an international perspective. The index focuses on developed and emerging companies that earn at least 50% of their revenue from sustainable water products and services.