Bloomberg ETF analyst Eric Balchunas says the drought that stretches across much of the Midwest and West has led to increased interest in three exchange-traded funds that focus on water resources. Bloomberg’s Catherine Cowdery reports on exchange-traded funds.
You can listen to the full Bloomberg segment: HERE
PowerShares Water Resources Portfolio (NYSEARCA:PHO)
The PowerShares Water Resources Portfolio (Fund) is based on the NASDAQ OMX US Water Index. The Fund generally will invest at least 90% of its total assets in common stocks that comprise the Underlying Index. The Underlying Index seeks to track the performance of U.S. exchange-listed companies that create products designed to conserve and purify water for homes, businesses and industries. The Fund is rebalanced quarterly and reconstituted annually in April.
First Trust ISE Water Index Fund (NYSEARCA:FIW)
The First Trust ISE Water Index Fund is an exchange-traded fund. The investment objective of the Fund is to seek investment results that correspond generally to the price and yield, before fees and expenses, of an equity index called the ISE Water Index. The ISE Water IndexTM is a modified market capitalization-weighted index comprised of exchange-listed companies that derive a substantial portion of their revenues from the potable and wastewater industry.The Index begins by establishing the total population of stocks in the potable and wastewater industry and eliminates stocks which do not meet the Index’s baseline eligibility requirements. To meet Index eligibility, a stock must satisfy market capitalization, liquidity and weighting concentration requirements. The Index selects the top 36 stocks in the industry by market capitalization. The Index is rebalanced on the application of the above model on a semi-annual basis.