Scott J Cooper Council Discusses Global Water Challenges and Investment

According to findings by the United Nations Office for Disaster Risk Reduction, “90 percent of all natural disasters are water related, while water scarcity affects four out of 10 people.”

“Although the planet is covered with 71% of water, nearly all of it is non-drinkable,” according to the Scott J Cooper Council. “That’s why lakes, rivers, and glaciers, which hold  1% of the global water supply,  are becoming more and more valuable every day.”  It’s also estimated that if water was shown to reflect its true value, most businesses around the world would be drastically affected. Hence, water offers one of the best opportunities for investment today.

Water Indexes

There are various water indexes that show how you can invest in the great commodity. The first place to check for water investments is the Dow Jones US Water Index. The index consists of a large number of domestic and international companies that have a minimum market cap of $150 million. However, it consists of just 29 stocks in total.

The second most lucrative body for water investments is the ISE-B&S Water Index, which was launched in January 2006. This index represents water distribution and filtration, and flow technology. Other companies that specialize in water-related solutions are also listed. The index includes over 35 stocks.

The S&P 1500 Water Utilities Index, a sub-sector of the normal S&P Utilities Index, is another great option. The index features only two companies, the American States Water and Aqua American.

Finally, the S&P Global Water Index is nearly 11 years old and contains 50 companies around the world. You’d be hard-pressed to find a better place for water investments than these indexes.

When it comes to water-related businesses, they fall primarily into a few areas, including utilities, infrastructure, equipment and materials, and so on.

Water Investments in Commodities

A look at the holdings of the water indexes allows for a good start to invest in water. A number of companies, from General Electric to Layne Christensen, have been seeking a piece of the market. Your options include direct stock purchases and dividend reinvestment plans. Firms are seeking to maximize their profits from water-related businesses, which include beverage providers and utilities and water treatment. Some of these businesses also provide pumps, valves and desalination plants.

If stock picking isn’t what you’re looking for in water investments, you can also go for ETFs. There are also mutual funds and even unit investment trusts that you can invest in. In a nutshell, you will find plenty of opportunities to invest in water.

• Invesco Water Resource Portfolio ETF (PHO). It’s the largest portfolio within the US, comprising 36 different securities. Here, you can buy shares of small to mid-sized companies.
• iShares Dow Jones US Utilities Index ETF, which provides a lot of exposure to water-related stocks.
• Invesco Global Water Portfolio ETF.
• Nasdaq OMX Global Water Index.
• First Trust ISE Water Index Fund.