Until now, there was only one fund through which investors could get exposure to the water industry – the $1.6 billion PowerShares Water Resources Portfolio (AMEX: PHO). The ETF includes water industry players that trade on U.S. exchanges and has had outstanding performance since its debut in December 2005. The group plans to roll out an international water ETF soon, but the competition is finally heating up.
This week, two new water funds launched – the First Trust ISE Water Index Fund (AMEX: FIW) and Claymore S&P Global Water Index ETF (AMEX: CGW).
First Trust is also U.S.-based, while the Claymore invests in companies globally. Claymore is based on the newly launched S&P Global Water Index, and has the best 1-, 3- and 5-year performance based on back-testing.
There is a great deal of overlap in the companies held by the U.S. funds – 29 of the 36 components in the PowerShares fund also appear in the First Trust fund.
PHO has more exposure to small caps, while First Trust is weighted slightly more toward large caps.
Purchase Progressive Investor’s Special Report: Investing in Water, to learn about this important industry.
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