Assets under management for FIW are $482.8 million and its expense ratio is 0.55%, or $55 for every $10,000 invested. If you’re unfamiliar with the water industry and some of the problems they face, the American Water Works Association releases a yearly State of the Water Industry Report that sums up the sector and its future outlook. Reading the main points can help you decide if it’s an industry you want to consider investing in. This relative obscurity can create market volatility because water stocks tend to be thinly traded, and the volatility in price can be more sensitive to smaller amounts of traders buying and selling the stocks. Kent Thune is the mutual funds and investing expert at The Balance. In addition to writing for several prominent online publications, Thune owns an investment advisory firm, Atlantic Capital Investments, in Hilton Head Island, South Carolina. Thune has spent more than two decades in the financial services industry, serving as an investment advisor and financial planner.
Because Arizona’s water market is fragmented, combined with the fact it is currently the U.S.’s fastest state in terms of homeownership growth state, Global Water is benefiting from great organic growth prospects. We’ve previously looked at thetop-10andtop-20engineering, procurement, and construction contractors for desalination plants to see if any of them provide pure-play exposure to desalination technology. We concluded that most of these companies were major global corporates with many other divisions, so none of them qualified as pure-play investments. AquaVenture Holdings, a small-cap company that IPO’ed on the NYSE in 2016, met the same fate when it was acquired by Culligan Water in March 2020. WaterFX and its planned Californian desalination plant seems to have disappeared from the face of the earth leaving two empty websites and puzzled journalists in its wake.
We explain the ins and outs of the global water industry and how to invest in the top water stocks from around the world. Middlesex Water Company owns and operates regulated water utility and wastewater systems. The Regulated segment collects, treats, and distributes water on a retail and wholesale basis to residential, commercial, industrial, and fire protection customers in parts of New Jersey, Delaware, and Pennsylvania. China Water Affairs Group is a water supply company with headquarters in Hong Kong. The company’s main business is to build and operate urban water supply systems and sewage treatment plants in mainland China.
Lyxor World Water is an ETF that aims to replicate the performance of the SGI World Water index CW. The basket is used as a reference index specific to the water sector and reflects the performance of the 20 largest companies operating in the sector of water services, water infrastructure, and water treatment. Those countries that have privatized water have kept a tight grip on the market by ensuring it is highly regulated. Most privatized industries are managed by a regulator that enforces strict limits on how much money they can make by selling water or operating wastewater systems like the sewers. This can be done in a variety of ways, such as setting price caps on customer bills and demanding a certain level of investment.
Water Stock #5: Essential Utilities, Inc Wtrg
It owns and operates two wastewater collection systems; five wastewater collection and treatment systems; and two reservoirs, including Lake Williams and Lake Redman, which hold approximately 2. To start trading on the underlying price movements of water stocks, you first need to decide whether you would prefer to spread bet or trade CFDs. Visit our guide on spread betting vs CFDs to decide the product most suited to your trading personality and overall goals, and then open an account using the sign-up link below.
It has a substantial military services group, which owns and operates water and wastewater systems on domestic US military sites. Severn Trent is the largest listed UK water company serving around 4.5 million homes and eight million customers across the Midlands. The company operates within the catchment areas of two of Britain’s largest rivers – the Severn and the Trent, which is where its name comes from.
One thing to watch — while American Water’s debt-to-equity ratio has been coming down, it’s still the highest among our group. This is OK in such a low interest rate environment, but could become a concern if rates appreciably rise. This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. This fund with over $766 million in assets, has a decidedly US-focus, and steers toward mid-size and small-cap companies. Performance has been solid with the fund posting double-digit gains over the past three- and five-year tracking periods.
As a water investor, you’ll need to track the performance of your investments on a regular basis. Burry’s fund, Scion Capital, managed to record returns of 489.33% between November 2000 and June 2008. Watertech Capital’s Stephen Hoffman says the niche of the Internet of Things as it relates to water will grow 14-16% annually for the next several years.
The United Nations World Water Development report for 2020 says that the effects of climate change are impacting water resources, leading to water shortages and contamination that affects crops. Currently, 2.2 billion lack access to drinking water that is safely managed.
Fiw, Cgw, And Pho Are The Best Water Etfs For Q3 2021
Although the market offers a variety of water utility stocks from all over the world, investing in drinking water stocks should be thoroughly evaluated. Water companies are subject by nature to times of financial debt and, therefore, interest rates should also be carefully assessed. It is preferable to invest in companies that demonstrate a higher level of stability.
- This added expense, coupled with volatility, increases a water ETF’s risk.
- The S&P Global Water Index itself tracks 50 companies from around the world that are involved in water related businesses.
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- Again, it’s impossible to know if water stocks will provide market-beating returns in 2021, and previous results are never indicative of future performance, especially during a pandemic.
- Less than 1% of the world’s supplies are easily accessible fresh water.
- The company’s Board of Directors also approved a 10% dividend increase, maintaining Algonuin’s excellent track record of shareholder returns.
Its third subsidiary, SJW Land Co, gives the company diversification. It owns commercial buildings and land, primarily in the San Jose area. The company is currently in the process of merging with Connecticut Water Service, which is included further down in this list. It generates around 60% of its revenue in the US with the rest coming from overseas sales. The supplier has ‘historically generated free cash flows that exceed 100% of our income’, giving it a greater ability to grow and reward shareholders. The company has grown over the years through acquisition, having made over 370 purchases since 1995.
China Water Affairs Group
Find out if these funds are right for you and which are the best water ETFs in 2020. So when thinking about investing in water think about big companies that also have to use large quantities of clean water to make their product. Palisades Water Index – index comprised of publicly traded companies engaged in the water industry. A sub-sector in the water treatment area involves desalinating seawater. This is a very solid, long-term water investment since there is so much more salt water available. Sothat kind of business could potentially solve all of our supply problems. Much of the U.S. water infrastructure has been in place since World War II, so it is no surprise that so many of its water systems are in disrepair.
It supplies water through dispensers, like those more familiar in offices. It argues its water quality is better than that supplied by standard utilities because of the effect of the metal pipes and chemicals have on the end product. It offers refill and exchange services throughout the US and Canada. Itron supplies smart networks, software, services, meters and sensors, which help utility companies and other firms operate critical infrastructure safely and securely. These are used not only in water networks, but also for electricity and gas, as well as other applications such as street lighting. The company has over 8000 customers in over 100 countries, with a particularly strong presence in North America. United Utilities serves over three million homes and 200,000 businesses in the North West of England.
What You Need To Know About The Water Industry
It’s a scarce resource, and growing populations are putting stress on our water infrastructure. The current global population sits at around 7.9 billion people, and that might climb to 9.8 billion in the next 30 years. MyBankTracker generates revenue through our relationships with our partners and affiliates. We may mention or include reviews of their products, at times, but it does not affect our recommendations, which are completely based on the research and work of our editorial team.
It has five water service subsidiaries, which you’ll find in California, Hawaii, New Mexico, Texas and Washington. Set up recurring investments — such as weekly or monthly — and contribute money regularly to help your money grow along with market changes. If you’re using a robo-advisor, you’ll answer questions about your risk tolerance and goals, and the company will invest your money accordingly. With a broader range of investments, there’s less risk of a single company tanking your investment. Beverage companies like PepsiCo, Inc offer brands of bottled water for public consumption, such as Aquafina. Many businesses are pioneering technology with water, such as through purification systems and innovative bottling techniques. As of the end of the third quarter, 21 hedge funds out of 816 tracked by Insider Monkey were bullish on AWR.
In addition to direct stock purchases, some of the larger firms offer dividend reinvestment plans. Firms seeking to profit from water-related businesses include beverage providers, utilities, water treatment/purification firms and equipment makers, such as those that provide pumps, valves, and desalination units. Releasing financial results can impact share prices of water stocks just like any other company.