Josephine Norton
The Invesco Water Resources ETF (or Invesco Global Water ETF) is an exchange-traded fund (ETF) that seeks to track the performance of companies that create products designed to conserve and purify water for homes, businesses, and industries. The fund invests at least 90% of its total assets in securities that comprise the underlying NASDAQ OMX U.S. Water Index, including common stocks, American depositary receipts (ADRs), and global depositary receipts (GDRs). Launched in 2005, the ETF has amassed over $2 billion in assets, making it one of the larger ETFs in its segment. With a medium risk profile, the fund has added about 6.57% year-to-date and has a 12-month trailing dividend yield of 0.50%.
What You'll Learn
The fund's performance
The Invesco Water Resources ETF (or PHO) is designed to track the investment results of the NASDAQ OMX U.S. Water Index. The fund typically invests at least 90% of its total assets in securities that comprise the underlying index, including common stocks, American depositary receipts (ADRs), and global depositary receipts (GDRs) of companies in the water industry.
The fund's holdings are diverse, with the heaviest allocation in the Industrials sector, followed by Utilities and Information Technology. The top 10 holdings, including Ecolab Inc. and Roper Technologies Inc., account for about 59.26% of total assets under management.
The Invesco Water Resources ETF is considered a medium-risk investment choice, with a beta of 0.98 and a standard deviation of 19.04% over the last three years. It has a Zacks ETF Rank of 2 (Buy) and is an excellent option for investors seeking exposure to the Industrials-Water segment of the market.
The fund has a management fee of 0.50% and a total expense ratio of 0.60%, making it on par with most peer products. With assets over $2.09 billion, it is one of the larger ETFs in the water industry.
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The underlying index
The Invesco Water Resources ETF (or PHO) is based on the NASDAQ OMX US Water Index (or Index). The fund will invest at least 90% of its total assets in common stocks and American depositary receipts (ADRs) and global depositary receipts (GDRs) of companies in the water industry that comprise the underlying index.
The NASDAQ OMX US Water Index tracks the performance of US exchange-listed companies that create products designed to conserve and purify water for homes, businesses and industries.
The fund seeks to match the performance of the NASDAQ OMX US Water Index before fees and expenses. The fund has a 12-month trailing dividend yield of 0.50%.
The Invesco Global Water ETF (Fund) is based on the Nasdaq OMX Global Water Index (Index). The fund will invest at least 90% of its total assets in companies listed on a global exchange that create products designed to conserve and purify water for homes, businesses and industries. The fund is non-diversified.
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Sector exposure and top holdings
The Invesco Water Resources ETF (or PHO) is based on the NASDAQ OMX US Water Index and will invest at least 90% of its total assets in common stocks and American depositary receipts (ADRs) of companies in the water industry. The ETF is rebalanced quarterly and reconstituted annually in April.
The ETF has a heavy allocation in the Industrials sector, at about 54.40% of the portfolio, with Utilities and Information Technology also featuring in the top three.
The top holdings of PHO include Xylem Inc., Danaher Corp. (DHR), and Ecolab Inc. (ECL). These three companies make up about 59.26% of total assets under management. Danaher Corp, for example, makes instruments and water purification technology for municipal and wastewater treatment facilities. Other top holdings include Roper Technologies Inc (ROP) and American Water Works Co. Inc. (AWK).
The Invesco Global Water ETF (or PIO) is based on the Nasdaq OMX Global Water Index and will invest at least 90% of its total assets in companies listed on a global exchange that create products designed to conserve and purify water for homes, businesses, and industries.
The top holdings of PIO include Roper Technologies Inc, Cia de Saneamento Basico do Estado de Sao Paulo SABESP, and Veolia Environnement SA.
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Performance and risk
As of 11 July 2024, the Invesco Water Resources ETF has added about 6.57% year-to-date, and its performance increased by about 16.30% over the last 12 months. The fund has traded between $49.77 and $68.93 in the past 52 weeks. The ETF has a beta of 0.98 and a standard deviation of 19.04% for the trailing three-year period, making it a medium-risk choice in the space.
The fund has a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. The fund's annual operating expenses are 0.60%, which is on par with most peer products in the space. Its 12-month trailing dividend yield is 0.50%.
As of 6 September 2022, the Invesco Water Resources ETF's one-year trailing total return was -16.6%. The fund's expense ratio was 0.59%, with an annual dividend yield of 0.23%.
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The issuing company
Invesco is a company that offers financial products, including exchange-traded funds (ETFs) such as the Invesco Water Resources ETF and the Invesco Global Water ETF. These ETFs are designed to provide investors with exposure to the water industry, particularly companies that create products for water conservation and purification.
The Invesco Water Resources ETF (ticker: PHO) is based on the NASDAQ OMX US Water Index and invests primarily in common stocks, American depositary receipts (ADRs), and global depositary receipts (GDRs) of companies within the water industry. The fund aims to track the performance of US exchange-listed companies that focus on water conservation and purification for homes, businesses, and industries.
On the other hand, the Invesco Global Water ETF (ticker: PIO) is based on the Nasdaq OMX Global Water Index and invests a significant portion of its assets in companies listed on global exchanges that are involved in water conservation and purification. This ETF provides exposure to companies from different regions and countries, potentially offering a more diverse set of investments.
Both ETFs are rebalanced quarterly and reconstituted annually in April. They carry certain risks, including the possibility of losing money, and are subject to market volatility due to their focus on a specific industry. The performance of these ETFs may not match the underlying index, and investors should carefully consider the risks outlined in the prospectus before investing.
Invesco provides detailed information about these ETFs on its website, including fund holdings, performance, and potential risks. Investors interested in the Invesco Water ETFs can refer to the website for the most up-to-date information and consider seeking independent financial advice to assess whether these investments align with their financial goals and risk tolerance.
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Frequently asked questions
The Invesco Water ETF is an exchange-traded fund (ETF) that seeks to track the performance of companies that create products designed to conserve and purify water for homes, businesses, and industries. The fund generally invests at least 90% of its total assets in securities that comprise the underlying index, which may include common stocks, American depositary receipts (ADRs), and global depositary receipts (GDRs).
To invest in the Invesco Water ETF, you can purchase shares of the fund on a stock exchange, such as the New York Stock Exchange (NYSE) or Nasdaq. You will need to open a brokerage account with a broker that offers access to the exchange where the fund is listed. You can then place a buy order for the number of shares you want to purchase.
As with any investment, there are risks involved in investing in the Invesco Water ETF. The fund is focused on the water industry, so it may be more vulnerable to adverse developments or market volatility in this specific sector. Additionally, the fund is non-diversified, which means it may experience greater volatility than a more diversified investment. It's important to carefully consider your investment objectives, conduct thorough research, and understand the risks involved before investing in any ETF.
