According to Sustainabledevelopment.uk.org, 2.1 billion people around the world still do not have access to safe drinking water and 4.5 billion people still lack access to proper sanitation. Poor sanitation, water, and hygiene lead to about 675,000 premature deaths annually.
Estimated annual global losses from these poor conditions are USD 470 billion–USD 260 billion from inadequate water supply and sanitation, and USD 120 billion from urban property flood damages, and USD 94 billion of water insecurity to existing irrigators.
Projections for worldwide investment needs are USD 6.7 trillion by 2030 to USD 22.6 trillion by 2050.
Consequently, we are seeing more companies devoting themselves to clean water. Many are included in this month’s Feature recommendation–The Invesco S&P Global Water Index ETF (Fund).The ETF seeks to track the investment results (before fees and expenses) of the S&P Global Water Index. The fund generally will invest at least 90% of its total assets in the securities and American depositary receipts (ADRs) and global depositary receipts (GDRs) that comprise the Index, including water utilities, infrastructure, equipment, instruments and materials.
The index is designed to measure the performance of approximately 50 of the largest global companies in water-related businesses. The index is computed using the net return, which withholds applicable taxes for nonresident investors.
The fund is non-diversified. The Fund and the Index are rebalanced semiannually.
This ETF is rated 5 stars by Morningstar. And it’s Top Three holdings are:
American Water Works Co Inc (AWK) has a market cap of $28.122 billion and has an annual dividend yield of 1.56%. The company offers water and wastewater services to approximately 1,700 communities in 16 states serving approximately 3.5 million active customers.
Xylem Inc (XYL) has a market cap of $21.04 billion and an annual dividend yield of 0.96%. The company designs, manufactures, and services engineered products and solutions for the water and wastewater applications in the United States, Europe, the Asia Pacific, and internationally.
Veolia Environnement SA (VEOEY) has a market cap of $17.936 billion and an annual dividend yield of 2.69%. Veolia provides global resource management, production, and delivery of drinking water and industrial process water; collection, treatment, and recycling of wastewater; and design and construction of treatment and network infrastructure.
Top 10 Holdings
|American Water Works Co Inc||AWK||9.82%|
|Veolia Environnement SA||VIE.PA||5.78%|
|Essential Utilities Inc||WTRG||4.58%|
|United Utilities Group PLC||UU..L||3.98%|
|Severn Trent PLC||SVT.L||3.61%|
Top Institutional Holders
|Name||Reporting Date||Total Holdings ($M)||Position Value ($)|
|UBS Group AG||5/12/21||583,088||28,653|
|Conservest Capital Advisors||4/22/21||491,054||24,130|
|Weatherly Asset Management||5/5/21||463,060||22,755|
|1832 Asset Management||5/17/21||452,217||22,215|
|MD Financial Management||5/6/21||394,231||13,408|
|Goldman Sachs Group||5/17/21||351,668||17,281|
|Bank of America||5/14/21||276,801||13,603|
|Invesco S&P Global Water Index ETF (CGW)|
|Net Asset Value: $53.29
|Category: U.S. Fund Foreign Large Value
|Largest Institutional investors:
Technical Analysis: Invesco S&P Global Water ETF
by Kate Stalter
As of this writing, the Invesco S&P Global Water ETF (CGW) is posting gains for the 14th month in a row. It’s been notching fresh highs since October, and just keeps climbing.
The fund returned 13.46% year-to-date and 53.95% over the past year.
The fund tracks the S&P North American Natural Resources Index. With pressure from consumers, investors and governments for businesses to become more environmentally friendly, funds like this are clearly in demand.
Despite the rip-roaring return since April 2020, this ETF is now offering a buy opportunity as it finds support above its 10-day moving average. It’s been consolidating below its May 10 high of $53.66.
Trading volume has been below average during the consolidation, which is a good sign. That indicates that institutional owners are holding shares, rather than selling off in bulk.
As with many highly specialized funds, this one has a relatively small market capitalization, just $936.7 million.
A small market cap is not necessarily an issue for most investors, but it can mean a fund is less liquid and could be a little more difficult to buy or sell at a particular price. It could also result in higher volatility than you’d find in a fund with a larger market cap, such as the SPDR S&P 500 ETF (SPY), which is also a portfolio holding.
|Top 10 Creations|
|Ticker||Fund Name||Net Flows*|
|VOO||Vanguard S&P 500 ETF||3,107.96|
|IEFA||iShares Core MSCI EAFE ETF||2,631.63|
|VTI||Vanguard Total Stock Market ETF||2,153.27|
|GLD||SPDR Gold Trust||1,743.99|
|XLF||Financial Select Sector SPDR Fund||1,726.49|
|VTV||Vanguard Value ETF||1,714.87|
|XLV||Health Care Select Sector SPDR Fund||1,639.09|
|BBEU||JPMorgan BetaBuilders Europe ETF||1,559.66|
|RSP||Invesco S&P 500 Equal Weight ETF||1,550.49|
|MTUM||iShares MSCI USA Momentum Factor ETF||1,458.72|
|Top 10 Redemptions|
|JNK||SPDR S&P 500 ETF Trust||-8,240.75|
|LQD||iShares U.S. Real Estate ETF||-1,666.84|
|GLD||SPDR S&P Dividend ETF||-1,333.54|
|XLK||iShares Russell 2000 ETF||-887.54|
|VCIT||Industrial Select Sector SPDR Fund||-701.31|
|TLT||iShares Core S&P 500 ETF||-608.60|
|IEF||iShares MSCI USA Min Vol Factor ETF||-589.65|
|USMV||iShares Russell 1000 ETF||-570.78|
|PFF||ARK Next Generation Internet ETF||-541.59|
|ACWV||Principal U.S. Small-Cap Multi-Factor ETF||-532.69|
|*Net flows in USD Millions|