Water ETF

AAA

DEFINITION of 'Water ETF'

An exchange-traded fund that invests in companies operating in industries such as water treatment and purification, water utilities, water monitoring, and broader distribution and retail companies. Water ETFs invest the majority of their assets into publicly traded equities based on an underlying index, which may be created in house or by a third-party market service.

INVESTOPEDIA EXPLAINS 'Water ETF'

There are water ETFs available that focus primarily on U.S.-based companies, while others have a more international focus. Underlying fund indexes are varied, but all include common stocks and American depositary receipts (ADRs) of foreign-based companies. The funds tend to be managed passively around their underlying indexes.

As the world's population grows, its finite water supply may become the most precious natural resource. This has led to heightened investor demand for companies engaged in creating potable water for consumers, irrigation supplies for farming, and other water-based goods and services.

VIDEO

Loading the player...
RELATED TERMS
  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with ...
  3. Commodity ETF

    Exchange-traded funds that invest in physical commodities such ...
  4. Dow Jones AIG Commodity Index - ...

    A rolling commodities index composed of futures contracts on ...
  5. Organizational Behavior - OB

    Organizational Behavior (OB) is the study of the way people interact ...
  6. Board Of Directors - B Of D

    A group of individuals that are elected as, or elected to act ...
RELATED FAQS
  1. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
  2. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
  3. What is the difference between passive and active asset management?

    Asset management utilizes two main investment strategies that can be used to generate returns: active asset management and ... Read Full Answer >>
  4. Is there a situation in which wash trading is legal?

    Wash trading, the intentional practice of manipulating a stock's activity level to deceive other investors, is not a legal ... Read Full Answer >>
  5. What are some of the most popular ETFs that track the retail sector?

    Some of the most popular exchange-traded funds (ETFs) that track the retail sector include the iShares S&P Global Consumer ... Read Full Answer >>
  6. Are there leveraged ETFs that follow the retail sector?

    There are many exchange-traded funds (ETFs) that track the retail sector or elements of the retail sector, and some of those ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Industry Handbook

    In this feature, we take an in-depth look at the various techniques that determine the value and investment quality of companies from an industry perspective.
  2. Mutual Funds & ETFs

    Change The World One Investment At A Time

    Socially responsible investing allows you to express your political views in an unlikely way.
  3. Mutual Funds & ETFs

    Water: The Ultimate Commodity

    Opportunities to invest in this scarce resource are flowing freely - dive in!
  4. Entrepreneurship

    Can Business Evolve In A Green World?

    Learn how global warming is starting to heat up America's corporate climate.
  5. Mutual Funds & ETFs

    Exchange-Traded Funds (ETFs)

    This vehicle combines the diversification of a mutual fund with the flexibility of a stock. Learn more about them here.
  6. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI EAFE Index

    Discover how the iShares MSCI EAFE Index ETF is managed, and learn which investors may benefit from adding the fund to a portfolio.
  7. Mutual Funds & ETFs

    ETF Analysis: Powershares DB US Dollar Bullish Fund

    Explore information and detailed analysis of two popular currency exchange-traded funds, the PowerShares DB U.S. Dollar Bullish and Bearish Index Funds.
  8. Mutual Funds & ETFs

    ETF Analysis: Market Vectors Gold Miners

    Learn about Market Vectors Gold Miners, one of the most volatile ETFs in the market, which fell 75% from 2011 to 2015 after climbing 300% from 2008 to 2011.
  9. Mutual Funds & ETFs

    The 5 Biggest ETF Companies

    Review a list of the five largest and most influential ETF providers in the world: BlackRock, Vanguard, State Street, Deutsche Bank AWM and Invesco.
  10. Investing

    Advising FAs: Explaining ETFs to a Client

    Exchange traded funds (ETFs) have exploded in popularity with both investors and professionals for several reasons, and their growth shows no sign of slowing.

You May Also Like

Hot Definitions
  1. Dog And Pony Show

    A colloquial term that generally refers to a presentation or seminar to market new products or services to potential buyers.
  2. Topless Meeting

    A meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, ...
  3. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  4. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  5. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  6. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!