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Four Interesting Ways to Invest in Water (PHO, CGW)

Partner Content @ By Stash | November 17, 2016 ??? 4:13 AM EST
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Brief Overview:

+ Population growth, climate change, and aging infrastructure seriously threaten the supply and quality of fresh water in
many parts of the world (United States included).

- America???s public and private sectors will need to invest in water on an unprecedented scale over the next two decades to
stave off crises and potential disasters: $2.98 billion in waste water and $1 trillion drinking water systems.

: Investors can tap the expanding U.S. and global water economy by investing in Exchange Traded Funds (ETFs) that track
water-related market indices.

First, let???s get something straight. There is no way to invest in water directly. That???s because unlike other naturally occurring
commodities such as gold and silver, water does not trade on any market or exchange. It is not a physical or securitized
asset for which you can buy or sell ownership stakes, or shares.

That said, water, especially fresh water, is a finite resource, the demand for which is growing rapidly as the global
population increases. For some economists and investors, that makes water an undervalued asset. While the global supply
of fresh water is constant, the growth in demand for water is increasing. This is due to expanding population and ever-
increasing consumption by farms, industries, cities, and suburbs. (Did you know, for example, that it takes 1,847 gallons of
water to produce one pound of beef?). Unless population growth slows down or humans consume less water, this trend is
likely to continue for the foreseeable future.

Alongside population and agriculture, the two other biggest drivers of the expanding water economy are climate change
and aging water infrastructure.

First, climate change. In a report last year, the World Economic Forum rated water crises as the greatest risk facing the world
over the next decade, largely because of the unpredictable effects of rising temperatures on the supply and quality of fresh
water in various parts of the world. Scientists are concerned about the potential effect that rising global temperatures and
melting polar ice caps will have on freshwater. They project that as sea levels rise, freshwater reserves may be tainted by
bodies of salt water and become undrinkable. ???The hydrologic system is tied to climate, and climate change will profoundly
affect water security worldwide,??? the report said.

As for infrastructure, the U.S. and many other countries are widely expected to invest in water infrastructure and equipment
onan unprecedented scale over the next several years - ostensibly to make up for decades of neglect.

According to the most recentinfrastructure report card from the American Society of Civil Engineers, America???s public and
private sectors will need to invest $2.98 billion in waste water and $1 trillion drinking water systems in the next two decades
to stave off further crises, or disaster. As things stand, the ASCE gives the U.S. a flat D grade for wastewater (sewage
infrastructure) and for drinking water.

Granted, this report is published by engineers with a vested interest in public works, but few experts challenge the assertion