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Should You Invest in the Invesco S&P Global Water Index ETF (CGW)?

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Launched on 05/14/2007, the Invesco S&P Global Water Index ETF (CGW - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Water segment of the equity market.

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

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 4, placing it in top 25%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $587.38 M, making it one of the average sized ETFs attempting to match the performance of the Industrials - Water segment of the equity market. CGW seeks to match the performance of the S&P GLOBAL WATER INDEX before fees and expenses.

The S&P Global Water NR Index is comprised of approximately 50 equity securities, selected from a universe of companies listed on global developed market exchanges, which include water utilities, infrastructure, equipment, instruments and materials.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.61%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.74%.

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, American Water Works Co Inc (AWK - Free Report) accounts for about 9.30% of total assets, followed by Xylem Inc/ny (XYL - Free Report) and Idex Corp (IEX - Free Report) .

The top 10 holdings account for about 50.19% of total assets under management.

Performance and Risk

The ETF has lost about -1.86% and is up roughly 5.87% so far this year and in the past one year (as of 09/05/2018), respectively. CGW has traded between $32.79 and $36.40 during this last 52-week period.

The ETF has a beta of 0.85 and standard deviation of 12.88% for the trailing three-year period, making it a low risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.

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.