Clark Galvan
The Guggenheim S&P Global Water Index ETF (CGW) is an exchange-traded fund (ETF) that offers investors broad exposure to the US equity market's industrials-water segment. Launched in 2007, the fund is passively managed and tracks the performance of the S&P Global Water Index, which includes water utilities, infrastructure, equipment, instruments, and materials. With assets of over $594 million, CGW is one of the larger ETFs in its space, aiming to match the performance of the S&P Global Water Index before fees and expenses. CGW is listed on the NYSE and has a 12-month trailing dividend yield of 1.79%.
| Characteristics | Values |
|---|---|
| Name | Invesco S&P Global Water Index ETF |
| Ticker Symbol | CGW |
| Stock Price | $58.38 |
| Stock Exchange | NYSE |
| Management Fee | 0.50% |
| Total Expense Ratio | 0.56% |
| Net Expense Ratio | 0.57% |
| Inception Date | 05/14/2007 |
| Assets | $594.32 million |
| Trailing Dividend Yield | 1.79% |
| Holdings | American Water Works Co Inc, Cia de Saneamento Basico do Estado de Sao Paulo SABESP, United Utilities Group PLC, Essential Utilities Inc, Advanced Drainage Systems Inc, etc. |
What You'll Learn
The fund's investment strategy
The Guggenheim S&P Global Water Index ETF (CGW) is a passively managed exchange-traded fund that offers investors broad exposure to the Industrials-Water segment of the US equity market. The fund seeks to match the performance of the S&P Global Water Index, which is comprised of approximately 50 equity securities selected from a universe of companies listed on global developed market exchanges, including water utilities, infrastructure, equipment, instruments, and materials.
The Guggenheim S&P Global Water Index ETF is sponsored by Invesco Powershares and has amassed assets over $594.32 million, making it one of the larger ETFs in its space. The fund has a 12-month trailing dividend yield of 1.79% and an expense ratio of 0.61%, making it on par with most peer products.
Looking at individual holdings, American Water Works Co Inc (AWK) accounts for about 9.20% of total assets, followed by Xylem Inc/ny (XYL) and Danaher Corp (DHR). The fund's performance for the past year has been positive, with a return of about 7.71% as of May 3, 2018.
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The fund's performance
The Invesco S&P Global Water Index ETF (CGW) is based on the S&P Global Water Index. The ETF aims to invest at least 90% of its total assets in securities that comprise the Index, including American depositary receipts (ADRs) and global depositary receipts (GDRs). The Index is made up of developed market securities, including water utilities, infrastructure, equipment, instruments, and materials.
The ETF's performance is linked to the performance of the underlying Index, which is designed to provide a balanced representation of different segments within the water industry. The Index typically includes 50 securities selected based on the relative importance of the global water industry within a company's business model. The two main clusters within the Index are water utilities and infrastructure companies, and water equipment and materials companies.
As of November 2024, the Invesco S&P Global Water Index ETF's net expense ratio was 0.57%, and its YTD Lipper Ranking was in the 40th percentile. The ETF's price has fluctuated over time, with a 52-week range of 44.37 to 53.30.
It is important to note that past performance is not a guarantee of future results, and investors should always conduct comprehensive analysis before making any investment decisions.
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The fund's fees and expenses
The Invesco S&P Global Water Index ETF (CGW) is an exchange-traded fund (ETF) that offers exposure to companies operating in the water industry, including water utilities, infrastructure, equipment, and materials. While it carries certain risks and may not be suitable for long-term buy-and-hold portfolios, it can be appealing to those who anticipate increased demand for water treatment companies due to scarcity issues.
Management Fee
The management fee for the Invesco S&P Global Water Index ETF is 0.50%. This fee covers the costs of managing the fund, including administrative, distribution, and other operational expenses.
Total Expense Ratio
The total expense ratio for the fund is 0.56%. This ratio represents the annual operating expenses of the fund, expressed as a percentage of the fund's average net assets. It includes the management fee and other expenses, such as brokerage, legal, and accounting fees.
Net Expense Ratio
The net expense ratio for the fund is 0.57%. This ratio represents the fund's total annual operating expenses after accounting for any fee waivers or expense reimbursements.
Shareholder Fees
Shareholders may pay more than the net asset value when buying fund shares and may receive less than the net asset value when selling those shares. This is because shares are bought and sold at current market prices, which may be higher or lower than the net asset value.
Risk Considerations
Investing in ETFs carries risks, including the possibility of losing money. Shares are subject to market risks and are not actively managed. The fund's return may not match the underlying index, and it may be subject to greater volatility due to its focus on a specific industry and region. Additionally, investing in foreign securities carries additional risks, including fluctuations in foreign currencies and political and economic instability.
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The fund's holdings
The fund seeks to track the investment results of the S&P Global Water Index, which is comprised of developed market securities, including water utilities, infrastructure, equipment, instruments and materials. The fund will invest at least 90% of its total assets in the securities American depositary receipts (ADRs) and global depositary receipts (GDRs) that comprise the Index.
The top holdings of the fund as of 11/22/2024 include American Water Works Co Inc, United Utilities Group PLC, Cia de Saneamento Basico do Estado de Sao Paulo SABESP, Essential Utilities Inc, and Advanced Drainage Systems Inc.
The fund's top holdings are subject to change, and investors should refer to the most recent fund holdings disclosure for an up-to-date list of the fund's investments.
The fund's performance has fluctuated over time, with past performance not guaranteeing future results. As of 05/03/2018, the fund had lost about -4.33% year-to-date but was up about 7.71% in the last year. The fund has a beta of 0.87 and a standard deviation of 13.53% for the trailing three-year period, indicating a low-risk investment choice.
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The fund's suitability for your portfolio
The suitability of the Guggenheim S&P Global Water Index ETF for your portfolio will depend on your investment goals, risk tolerance, and time horizon. Here are some key considerations:
Diversification and Sector Exposure
The fund provides exposure to the water industry, which offers a strong investment case due to the essential nature of water and the increasing global demand for water resources. The ETF holds a diverse range of companies related to water utilities, infrastructure, equipment, instruments, and materials. This diversification within the water sector can help reduce single-stock risk. However, it is important to note that the fund is non-diversified across sectors, focusing specifically on the industrials and utilities sectors.
Performance and Risk
The ETF has delivered positive returns over the last year, outperforming the broader market. It has a beta of 0.87 and a standard deviation of 13.53%, indicating relatively low volatility and risk compared to the overall market. The fund's performance is closely tied to the water industry and may be more volatile than more geographically diversified investments.
Costs and Expenses
Passively managed ETFs like Guggenheim S&P Global Water Index ETF offer cost efficiency. The fund's expense ratio of 0.56%- 0.61% is on par with most peer products in the space. However, it is important to consider that ETFs also incur brokerage commissions and other trading costs.
Dividend Yield
The ETF offers a competitive dividend yield of around 1.4%- 1.8%, providing a source of income for investors.
Suitability
The Guggenheim S&P Global Water Index ETF may be a suitable addition to your portfolio if you are seeking exposure to the water industry and believe in its long-term potential. The fund's low volatility and risk characteristics make it suitable for investors with a lower risk tolerance. Additionally, the ETF's dividend yield adds an attractive income component to the overall return. However, it is important to remember that the fund is not geographically diversified and is focused on specific sectors, so it may not provide the same level of diversification as broader market funds.
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Frequently asked questions
The Guggenheim S&P Global Water Index ETF (CGW) is an exchange-traded fund that provides exposure to the Industrials - Water segment of the U.S. equity market. It is passively managed and seeks to match the performance of the S&P Global Water Index.
You can invest in the Guggenheim S&P Global Water Index ETF by opening a trading account with a broker that offers access to this ETF, deciding on the number of assets you want to purchase, and then placing a buy order.
The Guggenheim S&P Global Water Index ETF offers broad exposure to the water industry, including water utilities, infrastructure, equipment, and materials. It is a passively managed ETF with low costs, transparency, flexibility, and tax efficiency, making it a popular option for long-term investors.
