How To Invest In Water Infrastructure Projects
The Keokuk Water Plant In Iowa.
Why Should You Invest In Water?
If you are serious about having an investment
portfolio in tune with a changing world, you should learn about the growing
demand for water. Investing in water may be one of the most profitable things
you can do with your money in the coming years.
There are two big things going for the water
industry. The first is a growing demand and shortage of potable water. Cities,
especially in the southern and western part of the United States will be forced
to build new treatment plants including desalinization or seawater conversion
plants in order to keep up with the need for water. Megaprojects, such as dams
and dam repair are also part of the mix.
The second is how the industry will reap benefits
from Federal economic stimulus spending.
Educate Yourself About Opportunities In Water Infrastructure
Learn about the sectors of the water industry that will be affected by the
stimulus package. The main thing that will affect the water industry will be
Barak Obama's ambitious plan to revive the economy by investing in
infrastructure. A big part of infrastructure spending will be new water plants
and systems. These include municipal water supplies, rural water supply systems,
treatment plants, replacing old pipes and more. It is hard to pick one stock
that covers the water industry as a whole.
Water, A "Multi - Fauceted" Industry
The water industry or water sector includes everything from companies that make
plastic and metal pipes to companies that make water meters such as the Badger
Meter Corporation. The water sector also includes companies that make high
tech desalinization equipment and also local water companies that operate water
systems for a profit.
You can buy individual stocks of companies such as Culligan or Badger Meter but
a much better way is to buy a sector ETF. An ETF is an Exchange Traded Fund.
These are traded on the stock exchange just like a stock but are composed of
many companies like a mutual fund. They are actually more like an index fund
which is not actively managed but made up of the biggest companies in the
There may be a small amount of fund
management actions that take place throughout the year, such as selling
companies that have low earnings, but not nearly as much as an actively managed
Invest In Water ETF's For Infrastructure Earnings
For good exposure to the water sector as a whole, try ETF's. The two biggest
water ETF's are from Invesco Powershares. Their symbols are PHO and PIO. The
fund PHO invests primarily in US based companies and carries less risk in terms
of share price swings. The fund PIO invests in about 25% US funds and the rest
overseas in developed and developing markets. It offers potentially higher
returns but more risk.
Another good water ETF is The Claymore S&P Global Water ETF Exchange Traded
Fund. Listed on the Toronto stock exchange as ticker symbol CWW, the Claymore
ETF mirrors the S&P Global Water Index and also appears on the American Stock
Exchange under symbol CGW.
Many leading analysts believe that due to growing shortages water will be the
new oil. These water related funds are a great way to invest in water
infrastructure and profit from the growing water shortage in the U.S. and around
This advice is not a substitute for advice from an
investment professional and is not an endorsement of any particular fund. You
should always consult a licensed broker before investing and read the prospectus
and other information.