If you're interested in broad exposure to the Industrials - Water segment of the equity market, look no further than the Invesco Global Water ETF (
PIO Quick Quote PIO - Free Report) , a passively managed exchange traded fund launched on 06/13/2007.
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 also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Water is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
The fund is sponsored by Invesco. It has amassed assets over $242.48 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.
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 0.75%, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 0.97%.
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 Quick Quote ROP - Free Report) accounts for about 8.67% of total assets, followed by Pentair Plc ( PNR Quick Quote PNR - Free Report) and Danaher Corp ( DHR Quick Quote DHR - Free Report) .
The top 10 holdings account for about 55.30% of total assets under management.
Performance and Risk
Year-to-date, the Invesco Global Water ETF return is roughly 1.96% so far, and was up about 10.03% over the last 12 months (as of 11/03/2023). PIO has traded between $30.64 and $37.04 in this past 52-week period.
The ETF has a beta of 0.97 and standard deviation of 18.16% 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.
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 reasonable 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 Quick Quote FIW - Free Report) tracks ISE Clean Edge Water Index and the Invesco Water Resources ETF ( PHO Quick Quote PHO - Free Report) tracks NASDAQ OMX US Water Index. First Trust Water ETF has $1.30 billion in assets, Invesco Water Resources ETF has $1.71 billion. FIW has an expense ratio of 0.53% and PHO charges 0.60%. Bottom Line
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