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Is Invesco Water Resources ETF (PHO) a Strong ETF Right Now?
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The Invesco Water Resources ETF (PHO - Free Report) was launched on 12/06/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
PHO is managed by Invesco, and this fund has amassed over $2.18 billion, which makes it one of the larger ETFs in the Industrials ETFs. Before fees and expenses, PHO seeks to match the performance of the NASDAQ OMX US Water Index.
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.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.59% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.49%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector - about 62.6% of the portfolio. Utilities and Information Technology round out the top three.
Looking at individual holdings, Ferguson Enterprises Inc (FERG) accounts for about 9.31% of total assets, followed by Ecolab Inc (ECL) and Roper Technologies Inc (ROP).
Its top 10 holdings account for approximately 60.13% of PHO's total assets under management.
Performance and Risk
The ETF has gained about 7.23% and it's up approximately 2.03% so far this year and in the past one year (as of 07/31/2025), respectively. PHO has traded between $58.13 and $72.14 during this last 52-week period.
The ETF has a beta of 0.99 and standard deviation of 18.12% 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 is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Invesco S&P Global Water Index ETF (CGW) tracks S&P GLOBAL WATER INDEX and the First Trust Water ETF (FIW) tracks ISE Clean Edge Water Index. Invesco S&P Global Water Index ETF has $972.33 million in assets, First Trust Water ETF has $1.86 billion. CGW has an expense ratio of 0.56% and FIW changes 0.51%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs
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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Is Invesco Water Resources ETF (PHO) a Strong ETF Right Now?
The Invesco Water Resources ETF (PHO - Free Report) was launched on 12/06/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
PHO is managed by Invesco, and this fund has amassed over $2.18 billion, which makes it one of the larger ETFs in the Industrials ETFs. Before fees and expenses, PHO seeks to match the performance of the NASDAQ OMX US Water Index.
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.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.59% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.49%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector - about 62.6% of the portfolio. Utilities and Information Technology round out the top three.
Looking at individual holdings, Ferguson Enterprises Inc (FERG) accounts for about 9.31% of total assets, followed by Ecolab Inc (ECL) and Roper Technologies Inc (ROP).
Its top 10 holdings account for approximately 60.13% of PHO's total assets under management.
Performance and Risk
The ETF has gained about 7.23% and it's up approximately 2.03% so far this year and in the past one year (as of 07/31/2025), respectively. PHO has traded between $58.13 and $72.14 during this last 52-week period.
The ETF has a beta of 0.99 and standard deviation of 18.12% 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 is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Invesco S&P Global Water Index ETF (CGW) tracks S&P GLOBAL WATER INDEX and the First Trust Water ETF (FIW) tracks ISE Clean Edge Water Index. Invesco S&P Global Water Index ETF has $972.33 million in assets, First Trust Water ETF has $1.86 billion. CGW has an expense ratio of 0.56% and FIW changes 0.51%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs
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.