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Tap in to water stocks


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by Doug Fabian, editor Making Money Alert

As we prepare for the summer heat, water presents a significant investment opportunity -- especially as states such as California and Texas face droughts. The PowerShares Water Resource ETF (PHO) presents one way to invest in water's untapped potential.

The fund dipped understandably during the winter months, but has begun to rise as the weather gets warmer. The rising price of water is likely to continue through the summer months.

After beginning the year at $17.19, PHO has climbed slowly throughout the year and ended trading yesterday at $18.40. If water prices keep ascending, an investment in PHO would offer a way to profit.


The PowerShares Water Resource Portfolio seeks to track the performance of U.S. exchange-listed companies that create products designed to conserve and purify water for homes, businesses and industries.

PHO's top five holdings are American Water Work, Waters Corporation, Flowserve Pall and ITT. All five of these holdings are performing reasonably well, year-to-date, and are expected to improve into the summer.

PHO is appealing for several reasons. First, water usage is growing rapidly. The United Nations reported "water usage has been growing at more than twice the rate of population increase in the last century."

In addition, the fund is widely invested in the water market, having holdings in filtration companies, treatment utilities and pipe manufacturers.

Learn more about this financial newsletter at Doug Fabian's Making Money Alert.

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