It's impossible to overstate our dependence on water. Even though roughly 70% of the earth is covered by water, only a tiny fraction of 1% is fresh and readily accessible to sustain over 7 billion people. (See also: The Economic Effects of Water Shortages.)

In fact, the United Nations authored a report in 2015 suggesting that the world may only have 60% of its required water by 2030, absent major global policy changes. The bottom line is that water is a precious and increasingly scarce commodity, so now might be the right time to consider adding it to your portfolio for long-term growth. (See also: Should Water Be Privatized?)

More investment advisors are recommending commodities as a dedicated asset class to hedge other assets in your overall portfolio. If you're looking at diversifying your commodities holdings to include exposure to water, you could look at individual water utilities stocks if you have the time and inclination – or you could check out the emerging class of water exchange-traded funds (ETFs) to hedge your bets.

Here are three water ETFs that are outperforming their peers. All figures are as of August 28, 2018.

1. Invesco Water Resources ETF (PHO)

This is the largest and arguably the most popular water ETF, with over $865 million in assets under management. Unlike other water funds, PHO is U.S.-centric, with a basket of 37 holdings that tilts toward mid- and smaller-cap companies, heavy on machinery and utilities and light on industrials. PHO's top 10 holdings comprise almost 60% of the portfolio; Waters Corporation (WAT), Roper Technologies (ROP) and Danaher Corp. (DHR) are the three biggest holdings. Shares have been volatile year-to-date and are currently up modestly, by 4.78%. (See also: Four Interesting Ways to Invest in Water.)

2. Invesco S&P Global Water ETF (CGW)

As the name suggests, this fund tracks the S&P Global Water Index and invests in companies of all market caps that stand to benefit from the increased demand for water, including water quality and delivery infrastructure. Although CGW has global exposure, it is heavily weighted to the U.S. (over 47% of its holdings) and the U.K. (roughly 14%). There are currently 52 companies in the fund's basket, with the top 10 holdings accounting for over 50% of its overall holdings; American Water Works (AWK), Xylem (XYM) and Danaher Corp. (DHR) are the three biggest holdings. The company has nearly $600 million in assets under management. So far in 2018, shares are little changed, down 0.90%. (See also: Investing in Water: Risks to Consider.)

3. Invesco Global Water ETF (PIO)

The PIO portfolio, with over $183 million in assets under management, tracks the Nasdaq OMX Global Water Index and focuses on global companies that create products for water conservation and purification. As you might expect, the portfolio is heavily tilted toward industrials and utilities, with a strong preference for large-cap growth and value. The portfolio is pretty concentrated as well, with the top 10 holdings accounting for almost 55% of its assets. There are 43 holdings. Top names include Danaher Corporation (DHR), Ecolab Inc. (ECL) and Pentair PLC (PNR).  While PHO is preferred by many investors, PIO is a good play for investors with confidence in the fund's top holdings. Shares are little changed, up 0.15% year-to-date. (See also: Water: The Ultimate Commodity.)

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