Now You Can Invest in Water | Stocks and ETF | Wint Wealth - YouTube

All of you watching this video might be aware of this fact that after oxygen, WATER, is

the single most important element which is required for the sustenance of life on our

planet. 

Especially for us because our body constitutes around 60% water. 

Despite being such an important resource, drinking water is available to us almost for

free. Uh, Almost!

I can vouch for this fact that even while watching this, a clean glass of water might

just be only some footsteps away from you. Or 50KMS away, if you live in Masai Mara/Ethiopia.

But, this is set to change, not very far away in the future.

In Spite of Earth being covered more than 70% in water, around 97% of it is found in

oceans. 

This 97% water is too salty to drink, grow crops. Useless.

That’s the same percentage of Men on dating apps. 97% Useless.

Prove me wrong!

So, only 3% of earth’s water is freshwater out of which a majority, i.e, 2.5% is locked

up in glaciers, polar ice caps or so deep underground that it cannot be accessed by

the present means accessible.

This leads us to the fact that out of all available water on earth, only 0.5% of it

is accessible to us as clean drinking water. Although I wish we had at least 0.5% accessible

decent non-creepy men. Sorry, for making this personal. Getting back…

with the ever increasing population, the demand for water has increased over 700% globally

in the last 100 years. With around 600 Billion cubic meters of water to over 4 Trillion in

2014. 

With global demand set to increase by over 50%, from 2000 to 2050, The United Nations

World Water Development report for 2018, states that almost 6 billion people are likely to

live in areas with water shortage, by 2050. This is what 2050 may look like in Mumbai

India has only about 4% of the world’s renewable resources but is home to around 18% of the

world’s population. The 2030 Water Resources Group estimates that at the current rate of

consumption, India will have only half of the water it needs by 2030. The Ganga-Meghna-Brahmaputra

basin accounts for 60% of India’s water resources, while the catchment of rivers flowing

west is 3% and they account for 11% of the country’s water resources. Therefore, 71%

of India’s water resources are available to only a small share of the population. Additionally,

water scarcity in India is expected to see an exponential growth as the overall population

is expected to increase to 1.6 billion by the year 2050. So stop reproducing right now,

and adopt cats. They are just like kids… For their entire live and you don’t have

to pay for their school fees. 





Considering all of these factors, although not treated as a commodity like gold or oil,

many investors have long since started investing in Water Stocks and ETFs(which I am going

to explain in the later part of this video).  A Trucost research suggests, “More than

half of the profits of the world’s biggest companies would be at risk if water was priced

to reflect it’s true value.”(show this quote on the screen) 

Strange as it may sound, but taking in account it’s scarcity, water can be a good source

for portfolio diversification.

A movie, which I am sure you must have at least heard about, The Big Short, ends with

a quote about Christian Bale’s character, Michael Burry:

“ The small investing he still does, is all focused on one commodity; Water.”

And Batman never lies! 









Now, let's talk about how you, as an investor, can invest in water. 

Just like Sensex and Nifty 50, there are some indexes which have been designed to track

various water-related investment opportunities. Just pray there is no Harshad Mehta to scam

people in these indexes. Here are the more popular of these being

The Dow Jones US Water Index which is composed of approximately 29 stocks of companies that

are affiliated with the water business and have a minimum market capitalization of $150

million. The ISE B&S Water Index which contains over

30 stocks and represents water distribution, water filtration, flow technology, and other

companies that specialize in water-related solutions.

The S&P 1500 Water Utilities Index which comprises just two companies, American States Water

and Aqua America and is a sub-sector of the Standard and Poor's 1500 Utilities Index.

The S&P Global Water Index is an 11 year old index which is composed of 50 global companies.

These companies have operations in majorly 2 sectors, utilities and infrastructure and

materials and equipment. 

Besides these there are also a variety of utility indexes that include some water stocks.

The Bloomberg World Water Index and the MSCI World Water Index gives investors a take on

the water industry from an international perspective. Any individual looking for investment opportunities

can start his search from any of these indexes. These indexes will provide you with a platform

for investing and will open up different avenues in the market. So next time someone asks you

why are you not investing in gold? Just sing this…


 Utility companies: You can invest in utility

companies that provide public water to communities, as well as companies that provide infrastructure

for utilities. Technology firms: Many businesses are pioneering

technology with water, such as through purification systems and innovative bottling techniques..

Beverage companies: Beverage companies like PepsiCo, Inc (PEP) offer brands of bottled

water for public consumption, such as Aquafina. Waste prevention companies: Preventing unnecessary

waste and increasing efficiency is a major issue.Companies that are producing products

like high-efficiency toilets and low-flow showerheads are in this category.

If you decide to invest in individual water stocks, you would have to go for individual

companies engaged in activities which we just talked about.

Considering the volatility of the stock market, this approach is a good option for those of

you who have a large tolerance for risk and can afford to ride out market fluctuations.

In addition to direct stock purchases, there are some larger firms which also offer dividend

reinvestment plans.

The Indian market offers quite a few investment opportunities in water. Some companies, the

stocks of which you can invest in are: Ion Exchange (India) Limited is a company

which is primarily engaged in water and environment management business and operates not only

in India but countries in Africa too. The products offered by it include ion exchange

resins, water treatment plants and chemical additives. This has given

a return of more than 200% in the last year alone. 

Thermax is a renowned company, which is also not exactly in the water business but a part

of their environmental and waste management business does operate in the water sector.

According to their annual report, their water and waste management sector carries out the

following activities- Water Treatment Solutions

Wastewater Treatment Solutions Water waste incineration

Zero liquid discharge Desalination plants

Thermax has been maintaining a healthy dividend payout of 33.16%

Triveni Engineering and Industries Limited is another company which is not completely

in the water sector. According to their balance sheet, ““Triveni is one of India’s largest

integrated sugar manufacturers and a market leader in its Engineering businesses, encompassing

high-speed gears, gearboxes, and water and wastewater treatment solutions.” They have

generated revenues close to Rs 175 Crore, from this sector.

VA Tech Wabag is one of the leaders in the Indian water sector. The Company’s principal

activities include supply, design, construction, installation and operational management of

drinking water. They provide similar services in the wastewater treatment, industrial water

treatment, and desalination plants sectors also.

Avanti Feeds Limited is not exactly in the water business as they classify themselves

as the aquaculture sector. Having said this, as the name aqua suggests, this industry is

heavily dependent on water. This company manufactures fish and prawn seeds, and shrimp processor

and exporter. Shrimp feed and processed shrimp are 

principal offerings of the company. With a 3 year ROE of 23.04%, investing in this company

might be an option to look for. 




As all of you know that even though investing in individual stocks can help you get greater

returns, that potential is offset by greater levels of risk. Reality is, the stock market

can be quite volatile, so you can see significant gains and losses by investing in individual

stocks.  ETFs or an Exchange Traded Fund, tend to be

a safer investment choice. With a broader range of investments, there’s less risk

of a single company tanking your investment. B-Roll- It’s like talking to multiple matches

on dating apps, so that if one starts to ghost you, you can continue your progress with the

other ones.

An ETF may be made up of dozens or even hundreds of different investment types, thus diversifying

your portfolio. Considering the fact that you are even watching this video, I am sure

all of you understand the importance of diversification in your stock portfolio. ETFs might be a good

option for all of you who are risk averse. 

Some of the major water ETFs include Invesco Global Water Portfolio ETF is based

on the NASDAQ OMX US Water Index and the First True ISE Water Index Fund.

First Trust ISE Water Index Fund is a multi-cap ETF that invests in a blend of value and growth

stocks. Their top three holdings include Agilent Technologies Inc. (A), a maker of analytical

instruments; Danaher Corp. (DHR), a designer and service provider of professional, medical,

industrial, and commercial products; and Pentair plc, a water treatment company incorporated

in Ireland Invesco S&P Global Water Index ETF is a multi-cap

blended fund that tracks the S&P Global Water Index. The index comprises a portfolio of

companies from developed markets representing water utilities, infrastructure, equipment,

instruments, and materials. Tortoise Global Water ESG Fund is based on

the Tortoise Global Water ESG Index and provides access to companies which are engaged in water

infrastructure, management, treatment and appear poised to benefit from the expected

and much needed investment in rebuilding existing and constructing new infrastructure for the

better management of this essential asset. 


5 POINTS TO KEEP IN MIND WHILE INVESTING

Like any investment, there are some questions which you have to ask yourself before investing.

Quantum of Investment: Do you want to invest a lump sum amount straightaway or build your

investment gradually?

Your Risk Appetite: Are you an individual who likes playing it risky or are you the

one who likes to play the game of wait and watch and then decide accordingly? 

What kind of investor are you: Are you a growth investor or a value investor? Meaning, do

you invest in a company after going dutifully through all of it's financial history or do

you want to take the plunge when the tide is high and just wait to see where it takes

you?

Duration: Are you in it for the long term or short term?

This was it from us for this video, folks. If you have any queries, feel free to ask

us in the comments below. You can also mail or whatsapp us on the details mentioned in

the video description. 

Thanks for watching.

Until next time. 

Happy Winting.