"I never drink water. I’m afraid it will become habit-forming."
–W. C. Fields
What’s so special about water?
Well, aside from being the dominant ingredient inside us all, water, and the companies associated with bringing clean water to the world, is becoming a hot investment sector.
The World Health Organization last year estimated that 1.1 billion people (of six billion on the planet) lack safe drinking water and that half of all hospital beds in the world are filled with people suffering from water-related diseases.
In many developing nations, such as China and India, the national wealth now is at levels where they finally are able to address their clean water issues. That translates into plenty of opportunity for companies offering water treatment services.
As of 2006, the water industry was estimated to be well over $400 billion-a-year worldwide. As global growth continues, developing nations will need to make water more available and safe from pollutants. But this story is not just one of developing nations.
Here in the United States, building and upgrading new water facilities is estimated to cost nearly $700 billion over the next two decades. That’s big growth my friends and the realization that our water supply and water infrastructure is in need of a major overhaul is likely going to drive the earnings and share prices of companies engaged in these and related enterprises much higher.
Fortunately, it’s now very easy to get our money positioned to take advantage of this receding water line. And, that’s where the PowerShares Water Resources Portfolio (PHO) comes in.
PHO is an index ETF which seeks performance results that correspond generally to the price and yield (before 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.
What you basically are getting with PHO is a basket of the best stocks in the water industry. These stocks may not be household names but they are the biggest and best water industry names that money can buy. They also are all in one place with each share of PHO.