Investors Urged to Put Water Funds in Portfolios

Published on October 23rd, 2009 | by

Forget gold, oil or soybeans. Put water funds in your investment portfolio, says a recent investment article. Water privatization and the water industry in general has caught the eye of investors and fund managers, which may lead to further increases in the importance of water issues across the globe.

Image: visualpanicWater
Water

According to Market Watch:

“The value of water across a broad range of socio-economic aspects will rival oil. By most accounts the water industry is the third or fourth largest industry in the world (behind electricity, oil and gas, and perhaps tourism).” – Steve Hoffmann, Palisades Water Index Associates

The reasoning is “money flows to water”, because the market driver for water is exploding population levels, and the supply will be affected by climate change, increased contamination of potable water, and a heavy demand by agriculture for steady water supplies. There is no substitute for water – every living thing on Earth needs it to survive, and investing in water infrastructure is a viable strategy for diversifying investment portfolios.

Urs Schön, Sustainable Asset Management, said “the $500 billion global water market is growing faster than the global economy,” and that growth in water infrastructure will come from developing countries.

However, water investment is not a sure thing, as it isn’t traded on the commodity market, government demand for infrastructure projects is flat, and politics can influence the water market in individual countries.

For more on water privatization, read Blue Gold: World Water Wars and make an effort to see the film.


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