Commodity investing continues to be all the rage with investors as numerous long-term factors support higher prices down the road. However, while portfolios are now heavy with gold, energy and agriculture investments, some natural resources have slipped through the cracks. One such opportunity lies within owning blue gold.

Water may not seem like a big investment opportunity, but the truth is it could be one of the biggest markets in the future. Here in the developed world, we tend to ignore water. After all, when you can get all you need from turning on the tap in the kitchen, the severity of the global water crunch doesn't even factor into your daily life. Nevertheless, for much of the world, water represents a major problem. Supply shortages, insufficient distribution, pollution and the lack of treatment systems are all major causes for concern. Add these current woes to the rapidly expanding global population, and the water problem takes an alarming twist.

For investors, betting on blue gold could be one of the best portfolio plays for the long haul.

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A Growing Problem
For many, access to potable water remains a struggle. That seems to be especially true in areas with the fastest-expanding populations. According to data provided by Bank of America (NYSE:BAC), roughly a billion people lack access to clean water, as the commodity is undergoing pressure both in supply and demand.

Supplies will remain constricted. Despite the fact that water covers much of the earth's surface, currently only about 2.5% of it is considered fresh and suitable for consumption. That small figure doesn't even take into account that much of that fresh water is still locked in the polar ice caps, permafrost and perpetually tied up as atmospheric moisture. Essentially, if the entire world's water were placed in a one-gallon jug, fresh water wouldn't account for even a teaspoon of it. And while climate change has made some of the water locked in the ice caps available, it's only a trivial amount.

On the flip side, demand continues to grow rapidly and unabated. The International Water Management Institute predicts that water demand in the booming emerging world will jump by 50%. As populations in emerging markets continue to grow and expand, new sources of industrialization, consumerism and agriculture demand will continue to put pressures on the planet's already dwindling water supplies. So much so, that some organizations predict that water will be one of the major drivers for conflicts going forward.

Nations like Botswana and Syria already receive most of their water from rivers that flow across the borders of hostile neighbors. China - which is expected to have its own 53 trillion gallon shortfall by 2030 - has been constructing dams on many of its tributaries that supply the lion's share of water to India, Cambodia and Vietnam. Add these supply shortages to insufficient distribution networks and the lack of treatment systems, and you have a recipe for rising prices.

However, it's not just emerging markets that will feel pressures from dwindling water supplies. By 2025, the developed world will see an 18% increase in its water use.

SEE: WaterSense: Saving Water And Money

Opportunities for Investment
The global water industry is currently a $360 billion market. However, as population grows, pollution increases and supplies become even scarcer, that market size should continue to expand. Given the severity of the global water crunch, longer-termed investors may want to give the sector a go.

The easiest and broadest way to do this is through PowerShares Water Resources (ARCA:PHO). This ETF is the largest and most heavily traded fund in the sector. The fund is concentrated in water-based industrials and utilities like Pentair (NYSE:PNR) and American Water Works (NYSE:AWK), and it has managed to produce a 5% annual return since its inception in 2005. Expenses run a relatively cheap 0.62%. For investors looking for a more global option, the Guggenheim S&P Global Water Index (ARCA:CGW) features a healthy dose of international water plays in addition to domestic ones. Both funds offer a broad take on the theme.

Here in the U.S., our water infrastructure remains a sticking point. Many of the pipes that carry water to U.S. residents are more than 60 years old and leak an estimated 1.7 trillion gallons every year. Some analysts peg fixing those problems as a $1 trillion opportunity. Moving all of that water from one location to another requires a vast array of pumps, valves and pipes. The pump manufacturer duo of Flowserve (NYSE:FLS) and Gorman-Rupp (AMEX:GRC) have been on a tear lately, as they also make products for the oil and gas industry. However, as municipality spending will and must increase for water-related activities, the two should get a huge bump in orders. Likewise for Northwest Pipe (Nasdaq:NWPX), which specializes in large-diameter steel pipeline systems used in municipality drinking water plants, as well as water infrastructure components producer Mueller Water Products (NYSE:MWA) - both could see a boost from the increase in spending.

Finally, water can provide steady dividends. Featuring a 2.5% dividend yield, utility Aqua America (NYSE:WTR) has been an income stalwart for many years. By buying up smaller municipality-owned water treatment facilities, the company has managed to build up its portfolio and expand its geographic footprint. For investors, Aqua America could be a stable way to play rising water prices.

The Bottom Line
While natural resource investing has exploded in recent years, many portfolios have little to no exposure to water. That's a shame, b the commodity could be one of the biggest opportunities in the future, as supply constraints battle with rising demand. For investors, the previous picks make ideal selections in playing the need for better quality water solutions.

At the time of writing, Aaron Levitt did not own any shares in any company mentioned in this article.