Water ETF

Exchange Trad­ed Fund

An ETF is a pas­sive man­aged fund with no matu­ri­ty lim­it that almost pre­cise­ly tracks an under­ly­ing index. Thus, the per­for­mance of the ETF is near­ly par­al­lel with the per­for­mance of the giv­en index. The pur­pose of an ETF is pri­mar­i­ly to offer the investor the oppor­tu­ni­ty to par­tic­i­pate in the devel­op­ment of an entire index just by pur­chas­ing a sin­gle secu­ri­ty. Con­se­quent­ly, an ETF ensures the investors a high lev­el of diver­si­fi­ca­tion in their port­fo­lios. The dif­fer­ence between an ETF and a tra­di­tion­al mutu­al fund is that the ETF does not attempt to achieve a high­er return than that of the under­ly­ing index. The ETF tracks the per­for­mance of the index. If the index increas­es by 9%, the ETF also ris­es by 9%. Accord­ing­ly, fees are sig­nif­i­cant­ly low­er in the ETF since changes in the ETF port­fo­lio are not made on an ongo­ing basis and there is no active fund man­ag­er who must be paid. Con­cern­ing a mutu­al fund, active fund man­age­ment takes place on a reg­u­lar basis which caus­es high­er costs for the investors. Secu­ri­ties can be bought and sold at any time. This is not the case with an ETF. How­ev­er, if changes occur in the under­ly­ing index, the same changes take place in the ETF.

Water ETFs in 2020

1. First Trust Water

Sym­bol: FIW
Launch­ing Date: 5/11/2007
Total Expense Ratio: 0,55 %
Index: ISE Clean Edge Water Index
Focus: US water com­pa­nies; water tech­nol­o­gy and tech­nic, water util­i­ty

2. Guggenheim S&P Global Water

Sym­bol: CGW
Launch­ing Date: 05/14/07
Total Expense Ratio: 0,6 %
Index: S&P Glob­al Water Index
Focus: Water util­i­ty; water infra­struc­ture and equip­ment

3. PowerShares Water Resources

Sym­bol: PHO
Launch­ing Date: 12/06/05
Total Expense Ratio: 0,62 %
Index: NASDAQ OMX US Water Index
Focus: US water tech­nol­o­gy and tech­nic com­pa­nies

4. Tortoise Water Fund

Sym­bol: TBLU
Launch­ing Date: 02/15/17
Total Expense Ratio: 0,40 %
Index: Tor­toise Water Index
Focus: Water infra­struc­ture and water util­i­ties in North Amer­i­ca