News

Launched on 06/13/2007, the Invesco Global Water ETF (PIO) 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 $275 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Water segment of the equity market. PIO seeks to match the performance of the NASDAQ OMX Global Water Index before fees and expenses.

The NASDAQ OMX Global Water Index is designed to track the performance of companies worldwide that are creating products that 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 0.75%, making it one of the most expensive products in the space.

It has a 12-month trailing dividend yield of 0.86%.

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.

Looking at individual holdings, Roper Technologies Inc (ROP) accounts for about 8.26% of total assets, followed by Pentair Plc (PNR) and Danaher Corp (DHR).

The top 10 holdings account for about 57.73% of total assets under management.

Performance and Risk

Year-to-date, the Invesco Global Water ETF has added about 3.74% so far, and was up about 16.88% over the last 12 months (as of 07/11/2024). PIO has traded between $31.37 and $43.54 in this past 52-week period.

The ETF has a beta of 1.03 and standard deviation of 18.33% for the trailing three-year period, making it a medium risk choice in the space. With about 46 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco Global Water ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, PIO is a good option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.

First Trust Water ETF (FIW) tracks ISE Clean Edge Water Index and the Invesco Water Resources ETF (PHO) tracks NASDAQ OMX US Water Index. First Trust Water ETF has $1.67 billion in assets, Invesco Water Resources ETF has $2.09 billion. FIW has an expense ratio of 0.53% and PHO charges 0.60%.

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.

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.

Get it free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Invesco Global Water ETF (PIO): ETF Research Reports

Danaher Corporation (DHR) : Free Stock Analysis Report

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

Pentair plc (PNR) : Free Stock Analysis Report

First Trust Water ETF (FIW): ETF Research Reports

Invesco Water Resources ETF (PHO): ETF Research Reports

To read this article on Zacks.com click here.

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.