Water is a stable, long-term industry that can make for a great place for investors to gain exposure to for the long haul. The demand for clean water is going to remain strong, especially as populations around the world expand. And the need for purification is crucial in low-income countries where there often isn't easy access to clean water.
The Invesco Water Resources ETF (NASDAQ:PHO) focuses on business which, " create products designed to conserve and purify water for homes, businesses and industries." There are 38 holdings in the exchange-traded fund (ETF) that give investors a broad mix of water stocks. Waters Corp (NYSE:WAT), Roper Technologies (NYSE:ROP), and American Water Works (NYSE:AWK) are the three largest holdings in the fund, each making up more than 7% of the ETF's total weight.
More than one-quarter (27%) of the fund is allocated to stocks involved in machinery. Water utility stocks account for another 18% of the ETF, followed by the life sciences tools and services industry at 16%. The fund averages a price-to-earnings ratio of 21 and has a price-to-book multiple of four.
Although the fund hasn't been doing terribly well this year (it's down 12%), over the past five years, the ETF has risen 78% in value, outperforming the S&P 500 which is up a more modest 53% during that period. The fund charges a management fee of 0.50% and is rebalanced every quarter.
For investors who want a safe long-term option to invest in, the Water Resources ETF can be a great investment to consider for the stability and diversification that the fund offers.
