Promising Investment Opportunities Gushing From California's Epic Water Crisis

Rose has outperform ratings on Mueller, Rexnord and Xylem. He rates Pentair and Tetra Tek neutral and has no rating on Toro.

Water ETFs and Mutual Funds

The most popular way to get exposure to a broad basket of companies engaged in water issues is through the PowerShares Water Resources Portfolio (PHO). The largest holdings in the 28-stock portfolio are Waters (WAT), Roper Industries (ROP), Pall Corp. (PLL), Pentair (PNR) and Flowserve (FLS).

First Trust ISE Water Index Fund (FIW), with an annual expense ratio of 0.60%, has the lowest fees. The smallest water ETF by assets holds 36 names that are modified cap-weighted. The largest companies are weighted at 4% of assets at most.

Guggenheim S&P Global Water Index ETF (CGW) is the most diversified with 50 companies from the U.S., Europe and Asia. Jim Corridore, an analyst at S&P Capital IQ, estimates the global water industry is valued at $500 billion.

Krish Himmatramka, CEO and founder of Do Amore. The Houston-based jeweler donates profits from ring sales to drill wells in developing countries:

“It’s easy to forget that globally, more than twice the population of the United States lives without access to safe water. The demand for wells is huge. I think the fact that almost 1 billion people live without clean water is a testament to that. Specifically in Ethiopia, there are about 50 million people, or 58% of the population, without access to clean water.”

PowerShares Global Water Resources Portfolio (PIO) holds 35 companies from the U.S. Europe, Asia and Latin America, mainly Brazil.

The water mutual funds charge a much higher annual management on top of a 5% front load depending on your broker.


Dried maize corn plants grow in a drought affected field operated by farmer Ryan Mathews in Lichtenburg, North West Province of South Africa, on Friday, March 20, 2015. The worst drought since 1992 in South Africa, the continent’s biggest corn producer and traditional supplier of its neighbors, has damaged plants, with the nation predicting a 32 percent drop in the 2015 harvest to the smallest in eight years. Photographer: Waldo Swiegers/Bloomberg via Getty Images.

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