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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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $2 billion, making it one of the larger ETFs in the Industrials ETFs. This particular fund 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.
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's 12-month trailing dividend yield comes in at 0.58%.
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.
For PHO, it has heaviest allocation in the Industrials sector --about 55.8% of the portfolio --while Utilities and Information Technology round out the top three.
Looking at individual holdings, Ecolab Inc (ECL) accounts for about 8.49% of total assets, followed by Ferguson Enterprises Inc (FERG) and American Water Works Co Inc (AWK).
Its top 10 holdings account for approximately 57.29% of PHO's total assets under management.
Performance and Risk
Year-to-date, the Invesco Water Resources ETF has lost about -4.21% so far, and is up roughly 7.69% over the last 12 months (as of 04/06/2026). PHO has traded between $58.13 $74.61 in this past 52-week period.
PHO has a beta of 1.06 and standard deviation of 16.05% for the trailing three-year period, which makes the fund 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 $1.03 billion in assets, First Trust Water ETF has $1.79 billion. CGW has an expense ratio of 0.58% 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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $2 billion, making it one of the larger ETFs in the Industrials ETFs. This particular fund 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.
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's 12-month trailing dividend yield comes in at 0.58%.
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.
For PHO, it has heaviest allocation in the Industrials sector --about 55.8% of the portfolio --while Utilities and Information Technology round out the top three.
Looking at individual holdings, Ecolab Inc (ECL) accounts for about 8.49% of total assets, followed by Ferguson Enterprises Inc (FERG) and American Water Works Co Inc (AWK).
Its top 10 holdings account for approximately 57.29% of PHO's total assets under management.
Performance and Risk
Year-to-date, the Invesco Water Resources ETF has lost about -4.21% so far, and is up roughly 7.69% over the last 12 months (as of 04/06/2026). PHO has traded between $58.13 $74.61 in this past 52-week period.
PHO has a beta of 1.06 and standard deviation of 16.05% for the trailing three-year period, which makes the fund 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 $1.03 billion in assets, First Trust Water ETF has $1.79 billion. CGW has an expense ratio of 0.58% 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.