Why Do Water ETFs Yield More Than Water Utilities?


Nov. 20 2020, Updated 12:44 p.m. ET

Water utility ETFs

Water utility ETFs (exchange-traded funds) yield roughly 100–150 basis points more than what water utility holding companies yield. A major part of the incremental yields that water ETFs obtain likely comes from their investments in the industrial sector.

The chart above shows the comparative price movement of water ETFs during the past year. The Guggenheim S&P Water Index ETF (CGW), the PowerShares Water Resources Portfolio (PHO), the PowerShares Water Resources Portfolio (PIO), and the First Trust ISE Water Index ETF (FIW) are four leading water utility funds that invest in water-related businesses in the US and beyond.

But although these ETFs have gained some ground in 2016, their one-year returns are more or less flat and have underperformed broader equities.

In the next part, we’ll take a look at the recent sentiments of institutional investors.

Article continues below advertisement

More From Market Realist

  • Businesswoman looking out a window
    Company & Industry Overviews
    Shifting Focus: Three Women Investing Funds in 2021
  • Aol logo on office building,
    Company & Industry Overviews
    What We Know About Apollo Global Management, New Owners of AOL and Yahoo
  • Chick-fil-A sign
    Company & Industry Overviews
    Why It Only Costs $10K to Own a Chick-fil-A Location
  • Beyond Meat Burger 3.0
    Company & Industry Overviews
    How Is Beyond Burger 3.0 Different and Will It Bring BYND Stock Up?
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.