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

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If you're interested in broad exposure to the Industrials - Water segment of the U.S. equity market, look no further than the Guggenheim S&P Global Water Index ETF (CGW - Free Report) , a passively managed exchange traded fund launched on 05/14/2007.

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

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 1, placing it in top 6%.

Index Details

The fund is sponsored by Invesco Powershares. It has amassed assets over $594.32 M, making it one of the larger ETFs attempting to match the performance of the Industrials - Water segment of the U.S. 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

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

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 1.79%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, American Water Works Co Inc (AWK - Free Report) accounts for about 9.20% of total assets, followed by Xylem Inc/ny (XYL - Free Report) and Danaher Corp (DHR - Free Report) .

The top 10 holdings account for about 51.66% of total assets under management.

Performance and Risk

So far this year, CGW has lost about -4.33%, and was up about 7.71% in the last one year (as of 05/03/2018). During this past 52-week period, the fund has traded between $32.02 and $36.40.

The ETF has a beta of 0.87 and standard deviation of 13.53% for the trailing three-year period, making it a low risk choice in the space. With about 50 holdings, it has more concentrated exposure than peers.

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.




In-Depth Zacks Research for the Tickers Above


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American Water Works (AWK) - free report >>

Danaher Corporation (DHR) - free report >>

GUGG-SP GL WAT (CGW) - free report >>

Xylem Inc. (XYL) - free report >>


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