By Carl Delfeld of the Chartwell ETF Advisor
A growing and hopefully profitable investment theme is the lack of water around the world and companies that are trying to do something about it. A good way to play this theme is through a basket of companies which where exchange traded funds come into the picture.
Dan Pritch writes in Seeking Alpha that the main ETF that garners attention is PowerShares Water Resources (PHO), which launched in 2005. Additionally, he mentions the Powershares Global (PIO), Claymore (CGW) and First Trust ISE Water Index Fund (FIW).
These ETFs stand to benefit from the continued infrastructure boom in the developing world, where the standard of living of citizens attempts to reach parity with those in the developed world. Right now, 1 in 6 people on this planet do not have access to clean drinking water and as we know America is not immune from water shortages. Note the drought in the South and continued problems in the West. It seems that increased spending on water infrastructure is inevitable.
The top 10 holdings of PHO make up less than half of its weighting and that these are primarily small cap stocks. Here they are:
FRANKLIN ELEC INC (FELE)
IDEX CP (IEX)
ITRON INC (ITRI)
LAYNE CHRISTENSEN (LAYN)
ROPER INDUST INC (ROP)
TETRA TECH INC (TTEK)
VEOLIA ENVIRONN ADS (VE)
WATTS WATER TECH A (WTS)
Find out what other new technology ETFs are in Chartwell ETFs New Venture portfolio.
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