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Should You Invest in the Invesco Water Resources ETF (PHO)?
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The Invesco Water Resources ETF (PHO - Free Report) was launched on 12/06/2005, and is a passively managed exchange traded fund designed to offer 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.
Sector ETFs are also funds of convenience, offering many ways 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 2, placing it in top 13%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $1.85 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
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 0.59%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.66%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 53.70% of the portfolio. Utilities and Information Technology round out the top three.
Looking at individual holdings, Ecolab Inc (ECL - Free Report) accounts for about 8.31% of total assets, followed by Roper Technologies Inc (ROP - Free Report) and Xylem Inc/ny (XYL - Free Report) .
The top 10 holdings account for about 60.42% of total assets under management.
Performance and Risk
The ETF return is roughly 8.78% and was up about 22.25% so far this year and in the past one year (as of 06/30/2023), respectively. PHO has traded between $45.70 and $55.87 during this last 52-week period.
The ETF has a beta of 0.96 and standard deviation of 19.78% for the trailing three-year period, making it a medium risk choice in the space. With about 38 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 - Free Report) tracks S&P GLOBAL WATER INDEX and the First Trust Water ETF (FIW - Free Report) tracks ISE Clean Edge Water Index. Invesco S&P Global Water Index ETF has $986.30 million in assets, First Trust Water ETF has $1.39 billion. CGW has an expense ratio of 0.57% 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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Should You Invest in the Invesco Water Resources ETF (PHO)?
The Invesco Water Resources ETF (PHO - Free Report) was launched on 12/06/2005, and is a passively managed exchange traded fund designed to offer 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.
Sector ETFs are also funds of convenience, offering many ways 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 2, placing it in top 13%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $1.85 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
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 0.59%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.66%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 53.70% of the portfolio. Utilities and Information Technology round out the top three.
Looking at individual holdings, Ecolab Inc (ECL - Free Report) accounts for about 8.31% of total assets, followed by Roper Technologies Inc (ROP - Free Report) and Xylem Inc/ny (XYL - Free Report) .
The top 10 holdings account for about 60.42% of total assets under management.
Performance and Risk
The ETF return is roughly 8.78% and was up about 22.25% so far this year and in the past one year (as of 06/30/2023), respectively. PHO has traded between $45.70 and $55.87 during this last 52-week period.
The ETF has a beta of 0.96 and standard deviation of 19.78% for the trailing three-year period, making it a medium risk choice in the space. With about 38 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 - Free Report) tracks S&P GLOBAL WATER INDEX and the First Trust Water ETF (FIW - Free Report) tracks ISE Clean Edge Water Index. Invesco S&P Global Water Index ETF has $986.30 million in assets, First Trust Water ETF has $1.39 billion. CGW has an expense ratio of 0.57% 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.