The Commodity Of The Future Lies Underneath These ETF’s

the-future“The Water Wars Could Start to Heat Up. You probably know that experts are worried about future water supplies not only for the developing world, but also Europe and America. Earth’s population has tripled over the past 100 years, meaning water requirements have soared. In fact, global water consumption has increased nearly twice as fast as population growth in recent years, and some projections expect the water industry to be a trillion-dollar market as early as 2020,” Sean Brodrick Reports From UnCommon Wisdom Daily.

Some other facts from the experts

  • Only 3% of all the water in the world is fresh water. However, of that 3%, two-thirds is locked up in icecaps and glaciers. In the end, we can only consume 1% of the world’s water supply.
  • Experts estimate the global population will rise from 6.8 billion today to 9.2 billion by 2050. I think we’ll run into Malthusian limits before then, but there will still be significant new demands on the existing water supply. The daily Western requirement for water — just to assure survival and minimum living standards — is about 13.2 gallons per person.
  • It takes 14 gallons of water to grow a pound of grain, 435 gallons to grow a pound of beef, 2,000 gallons of water to make one gallon of milk, nearly 20,000 gallons of water is needed to make one ton of steel. The growing world is using more commodities all the time, and people in emerging markets want to eat and drink like the big good ol’ boys in America. That means each person will be using even more water.

“And while you can substitute various alternate fuels for fossil fuels like crude oil, there is no substitute for water.So, I think water is a commodity for the long term. The conundrum for investors is that water doesn’t trade on an exchange. However, there are three exchange-traded funds listed in the U.S. that track the water industry to varying degrees: The PowerShares Water Resources (PHO) focuses on U.S. stocks. The PowerShares Global Water (PIO) is more global in scope, as is the Claymore S&P Global Water ETF (CGW),” Brodrick Reports.

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Here is a closer look at the 3 ETF’s below:

The investment (PHO) seeks results that correspond generally to the price and yield (before the Fund’s fees and expenses) of an equity index called the Palisades Water index. The fund normally invests at least 80% of total assets in American Depositary Receipts and common stocks of companies in the water industry. In pursuit of its objective, it may invest at least 90% of total assets in American Depositary Receipts and common stocks that comprise the Palisades Water index. It is nondiversified.

TOP 10 HOLDINGS ( 46.29% OF TOTAL ASSETS)  
 
Company Symbol % Assets
AECOM TECHNOLOGY COR ACM 5.07
DANAHER CP DHR 4.87
FLOWSERVE CP FLS 4.33
Insituform Technologies, Inc. INSU 3.94
Itron, Inc. ITRI 4.54
ROPER INDUST INC ROP 4.35
Tetra Tech, Inc. TTEK 5.26
U R S CP URS 4.82
VALMONT INDS INC VMI 4.59
VEOLIA ENVIRONN ADS VE 4.52

Chart for PowerShares Water Resources (PHO)

The investment (PIO) seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the equity index called the Palisades Global Water index. The fund normally invests at least 90% of total assets in stocks that comprise the Palisades Global Water index and ADRs based on the stocks in the Palisades Global Water index. It normally invests at least 80% of its total assets in securities of companies that generate at least 50% of their revenue from water or water-related activities. The fund is nondiversified.

TOP 10 HOLDINGS ( 49.76% OF TOTAL ASSETS)  
 
Company Symbol % Assets
ARCADIS ARC.AS 5.58
Hyflux 600.SI 5.25
Kemira Oyj N/A 4.75
Kurita Water Industries Ltd N/A 4.53
NALCO HOLDING CO. NLC 5.42
Organo N/A 4.68
STANTEC INC STN 4.98
SUEZ ENV. CPY SEV.PA 5.04
Tetra Tech, Inc. TTEK 5.13
VALMONT INDS INC VMI 4.4

Chart for PowerShares Global Water (PIO)

The investment (CGW) seeks investment results that correspond generally to the performance of an equity index called the S&P Global Water index. The fund seeks to replicate, before expenses, the performance of the S&P Global Water index. The index is comprised of 50 equity securities selected, based on investment and other criteria, from a universe of companies listed on global developed market exchanges. It is nondiversified.

TOP 10 HOLDINGS ( 56.30% OF TOTAL ASSETS)  
 
Company Symbol % Assets
DANAHER CP DHR 4.88
Geberit AG, Jona N/A 10.28
I T T CORPORATION ITT 4.62
Kurita Water Industries Ltd N/A 5.13
NALCO HOLDING CO. NLC 4.69
PENNON GROUP ORD PNN 3.42
SEVERN TRENT SVT.L 5.07
United Utilities Group PLC N/A 6.58
VEOLIA ENVIRONNEMENT VIE 8.13
WorleyParsons Limited N/A 3.5

 Chart for Claymore S&P Global Water (CGW)

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