Why Investing in Water Is a True Long-Term Play

Water may seem like a strange investment on the surface, given the vastness of the world’s oceans, but water scarcity has become a very real global concern. According to UN Water, global freshwater usage has been increasing at more than twice the rate of population growth, and freshwater scarcity is widely cited as a reason for future geopolitical conflicts. Investors can’t simply purchase water futures contracts — as they could with crude oil or natural gas — but there are opportunities to invest in water-focused corporations. For example, industrial water treatment and purification companies are a critical supplier of freshwater for human consumption and farming, while water equipment and delivery companies provide alternative ways to capitalize on the rapidly growing market. In this article, we will take a look at exchange-traded funds (ETFs) that are focused on water, their performance over the past several years, and some important risks to consider.