Somewhat quietly, the Invesco Global Water Portfolio (PIO ) is higher by almost 29% over the past six months and flirting with all-time highs, underscoring the credibility of the water investment thesis.
As the world reviews the effects of climate change, global population growth and inadequate or aging infrastructures, investors can consider water industry-related exchange traded funds to capture potential long-term opportunities.
The World Energy Council estimates that total power demand for water is expected to rise 100 billion cubic meters by 2050. For instance, Asia faces challenges to water supply for power generation to meet growing population and associated power requirements. China alone is projected to see water demand rise 15% in the next 40 years
“The global water market is attractive for two main reasons: reliability and opportunity. Due to its essential nature, the demand for water remains consistent despite fluctuations in the economy,” notes Nasdaq Global Indexes.
Opportunity and reliability speak to potential long-term benefit with PIO.
PIO's Potable Power
Water investing is a good way to play a long-term trend as the world still needs to find sustainable sources of potable fresh water, especially with the specter of climate change.
“But the availability of freshwater is increasingly in question, due to the triple threat of population growth, climate change (with increasing droughts and other impacts from changes in global weather patterns), and water resource contamination from industrial processes,” notes Nasdaq.
PIO features exposure companies that are associated with global water utilities, infrastructure, equipment, instruments and materials.
As the world reviews the effects of climate change, global population growth and inadequate or aging infrastructures, investors can consider water industry-related exchange traded funds to capture potential long-term opportunities.
Some countries, including the U.S., are leveraging technology to reduce water use and that speaks to the long-term potential of funds like PIO.
“Total water use has been declining in the U.S. since it peaked in 1980, and economic productivity per gallon of water has continued to rise. Economic productivity is defined as the U.S. GDP divided by the total annual withdrawals from surface water, groundwater, or sea water over a given year. This rise in productivity indicates we are producing more value from less water than ever before,” according to Nasdaq.
