| When thinking of ETFs in t he commodity | | | | |
| sector most investors think of Oil and | | | | On a worldwide basis rapid industrialization |
| metals. There is a commodity that investors | | | | and increasing agricultural needs have |
| may not be aware of that is posting good | | | | contributed to a worldwide water shortage. |
| returns. That commodity is water There is a | | | | China, India, Egypt, Israel, Pakistan, Mexico |
| growing world demand for clean water | | | | and parts of the American southwest are just |
| worldwide. In the US the aging infrastructure | | | | a few of the areas that have experienced |
| that delivers water needs to be replaced. | | | | water shortages. |
| | | | |
| One ETF that takes advantage of these | | | | In addition another problem has been the |
| investment opportunities is Powershares Water | | | | contamination of existing water supplies. In |
| Resources (PHO). With many exchange traded | | | | the United States fertilizer runoff into the |
| funds down or just treading water for the | | | | gulf has caused a large problem. MTBE an |
| year so far, PHO is performing above average. | | | | additive in unleaded gasoline is showing up |
| As of July 6th it is up over 9% which is not | | | | in well water from one end of the country to |
| bad for the recent market conditions. While | | | | the other. There have been many more |
| gold and oil related ETFs are currently | | | | documented cases of water pollution in |
| performing better, their volatility is much | | | | countries outside of the US. Of course every |
| greater and next month could be a different | | | | time there is a contamination incident, the |
| story. | | | | supply of fresh water available for human |
| | | | consumption is diminished. |
| The Powershares Water Resources Portfolio is | | | | |
| based on the Palisades Water Index (TM) . The | | | | For investors the question is how to take |
| Index seeks to identify a group of companies | | | | advantage of this space. Before Powershares |
| that focus on the provision of potable water, | | | | PHO an investor could invest in utility funds |
| the treatment of water and the technology and | | | | of individual stocks. Both of these methods |
| service that are directly related to water | | | | are hit and miss. Utility funds are much more |
| consumption. This industry has become a $260 | | | | heavily weighted toward companies that are |
| billion plus industry. As time goes by this | | | | not involved in the water industry. The only |
| industry is sure to grow even larger. | | | | other way to invest in this industry was to |
| | | | invest in individual stocks. This method has |
| The Environmental Protection Agency estimates | | | | its risks because the water industry is so |
| that in the US over the next two decades over | | | | broad based and picking the right stock at |
| $500 million will be spent to upgrade or | | | | the right time is not a particularly easy |
| replace public water supplies. | | | | task. |