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 Aug. 18, 2017.

PowerShares Water Resource Portfolio ETF (PHO)

This is the largest and arguably the most popular water ETF, with over $804 million in assets under management. Unlike other water funds, PHO is U.S.-centric, with a basket of 36 holdings that tilts toward mid- and smaller-cap companies, heavy on machinery and utilities and light on industrials. PHO's top 10 holdings comprise over 59% of the portfolio and feature names such as Roper Technologies Inc. (ROP) and Waters Corporation (WAT). (See also: Four Interesting Ways to Invest in Water.)

Guggenheim S&P Global Water Index 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. (roughly 44% of its holdings) and the U.K. (roughly 14%). There are currently 50 companies in the fund's basket, with the top 10 holdings including major industry names such as Geberit AG (GBERY) and American Water Works Company, Inc. (AWK). (See also: Investing in Water: Risks to Consider.)

PowerShares Global Water Portfolio ETF (PIO)

The PIO portfolio 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 over 56% of its assets. Top names include Ecolab Inc. (ECL), Veolia Environnement S.A. (VEOEY) and Danaher Corporation (DHR). While PHO is preferred by many investors, PIO a good play for investors with confidence in the fund's top holdings. (See also: Water: The Ultimate Commodity.)

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