News

Launched on 12/06/2005, the Invesco Water Resources ETF (PHO) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Water segment of the equity market.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Water is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $2.09 billion, making it one of the larger ETFs attempting to match the performance of the Industrials - Water segment of the equity market. PHO seeks to match the performance of the NASDAQ OMX US Water Index before fees and expenses.

The NASDAQ OMX US Water Index tracks the performance of US exchange-listed companies that create products designed to conserve and purify water for homes, businesses and industries.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.50%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Industrials sector--about 54.40% of the portfolio. Utilities and Information Technology round out the top three.

Looking at individual holdings, Ecolab Inc (ECL) accounts for about 8.34% of total assets, followed by Roper Technologies Inc (ROP) and Danaher Corp (DHR).

The top 10 holdings account for about 59.26% of total assets under management.

Performance and Risk

Year-to-date, the Invesco Water Resources ETF has added about 6.57% so far, and was up about 16.30% over the last 12 months (as of 07/11/2024). PHO has traded between $49.77 and $68.93 in this past 52-week period.

The ETF has a beta of 0.98 and standard deviation of 19.04% for the trailing three-year period, making it a medium risk choice in the space. With about 41 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco Water Resources ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PHO is an outstanding option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

Invesco S&P Global Water Index ETF (CGW) tracks S&P GLOBAL WATER INDEX and the First Trust Water ETF (FIW) tracks ISE Clean Edge Water Index. Invesco S&P Global Water Index ETF has $966.22 million in assets, First Trust Water ETF has $1.67 billion. CGW has an expense ratio of 0.56% and FIW charges 0.53%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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Invesco Water Resources ETF (PHO): ETF Research Reports

Ecolab Inc. (ECL) : Free Stock Analysis Report

Danaher Corporation (DHR) : Free Stock Analysis Report

Roper Technologies, Inc. (ROP) : Free Stock Analysis Report

Invesco S&P Global Water Index ETF (CGW): ETF Research Reports

First Trust Water ETF (FIW): ETF Research Reports

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.