Gold has been one of those resources that have preserved value over time and over the past century; oil has also been a great source of money for those who own it. Thus, many refer to oil as “black gold”. Increasingly, the media and scientists are starting to agree on another trend; that water will be to the 21st century what oil was to the 20th.
We’ve all heard about Africa’s dryness and its impact on their population. But did you know that even in the Western world, water is becoming very valuable? California has been dealing with increasingly serious water shortage problems
which have impacts on farms obviously but also on many industrial companies.
There are now a growing number of investors looking to profit from what could be the “next oil”. Of course, as is the case for oil, there are many different types of companies that can profit from water’s increasing value such as:
-Companies that own water
-Companies that can help improve the efficiency of water use
-Companies involved in water infrastructure
-Companies involved in water transport & manufacturing
They are basically ranked as two different industries according to S&P: Standard & Poor’s Capital IQ (“CIQ”) industry classifications:
1. Water Utilities and Infrastructure Companies (25): water supply, water utilities, waste water treatment, water, sewer and pipeline construction, water purification, water well drilling, water testing
2. Water Equipment and Materials Companies (25): water treatment chemicals, water treatment appliances, pumps and pumping equipment, fluid power pumps and motors, plumbing equipment, totalizing fluid meters and counting devices
Since I am far from a specialist, the only thing I would seriously consider investing in is an ETF, here are that are good options in my opinion.
PHO – Powershares water resources
PIO – Powershares water portfolio
FIW – First Trst ISE Water index
CWW.TO – Clayrmore S&P Global Water ETF