Water is life.

As precious as a resource can get.

And yet, almost half the world lacks safe sanitation. 

That’s happening at the same time that global water demand is projected to increase by 55 per cent by 2050.*

In this article, we will give you 4 ideas on how to invest in water.

Quick Summary

1. Water creates investment opportunities in areas like developing water technologies and identifying new water resources.

2. Investment options in water include investing in farmland with water access, water stocks, and water ETFs.

3. Michael Burry, known for predicting the 2008 housing market crash, has invested in farmland with water access.

4. Investing in water stocks and water ETFs, can contribute to sustainable practices and environmental protection.

5. Evaluating water ETFs for their alignment with UN SDGs related to water can help investors know their impact.

Water Investment Opportunities

We all know water is a vital resource. 

But what many don’t know is that it is a scarce resource in many parts of the world. In fact, over two billion people live in countries where water supply is inadequate*

This has created investment opportunities such as developing technologies to improve the efficiency of water resources, as well as identifying new water resources.

Investing in water typically provides exposure to:

1. Supply pipe work, pumps and meters

2. Engineering companies

3. Water treatment products and equipment

4. Produce technologies for disinfecting, filtering and desalinating water

5. Distributing and managing hydraulic water networks

How to Invest in Water

“Michael Burry is focusing all of his trading on one commodity: Water” – The Big Short

Michael Burry, known for predicting the 2008 housing market crash, is known for investing his money on farmland with good water access.

As access to water becomes increasingly scarce due to climate change and population growth, investing in water-related assets, like farmland, can potentially provide potential financial gains and support sustainable agriculture and water access for communities.

Of course not everyone has the capital to invest in water-rich farmland.

Michael Burry’s Bet on Farmland

You can invest in water through stocks of companies involved in water, or by investing in ETFs which provide high exposure to such stocks. Alternatively you can invest in farmland in water-rich areas, a method Michael Burry has drawn attention to.

Of course, those are not the only ways to invest in water, just some ideas on where to start.

We’ll go into more detail on each of these below.

Water Stocks

Investing in water stocks is another way to invest in water-related assets. Water stocks refer to publicly traded companies that are involved in various aspects of the water industry, including water treatment, infrastructure, and utilities.

Water stocks can be a way for investors to support sustainable practices and environmental protection. Many water companies have environmental sustainability as a core value, and investing in these companies can contribute to positive social and environmental impact.

However, like any investment, it is important to conduct thorough research and consider the risks associated with investing in the water industry.

Water ETFs

Investing in water ETFs is like investing in a basket of water-related stocks.

Water ETFs can provide investors with a diversified portfolio of water-related investments whilst potentially generating financial returns and supporting sustainable development.

That means you could be investing in a wide range of water related industries with a single investment.

However, like any investment, water ETFs come with potential risks and drawbacks. For example, water ETFs may be affected by market volatility, changes in government regulations, and the performance of individual companies within the portfolio. 

Water ETFs and UN SDGs

UN SDGs are a set of 17 global goals that were adopted by the United Nations General Assembly in 2015. They are a blueprint for achieving a sustainable future for all, and they cover a wide range of issues, including clean water and sanitation.

4 SDGs related to water are:

SDG 6 - Clean Water and Sanitation
SDG 7 - Affordable and Clean Energy
SDG 13 - Climate Action
SDG 14 - Life Below Water

Investors can evaluate their investments in water ETFs to see how well they align with these goals. One way to do this is to look at the UN SDG revenue alignment of the companies included in the ETF.

UN SDG revenue alignment is a metric that measures how much of a company's revenue is generated from products or services that align with specific SDGs. For example, a water utility company that provides clean drinking water to communities would have high revenue alignment with SDG 6: Clean Water and Sanitation. 

By investing in water ETFs with high UN SDG revenue alignment, investors can potentially generate financial returns while contributing to the achievement of SDGs related to water and sustainable development.

Investing in Water with GOODFOLIO

By investing in water, investors can make a positive impact on the environment and society while potentially generating financial returns. 

GOODFOLIO is an investing platform designed for the conscious investor. Funds go through a screening process and are categorised by sustainability themes including Water ETFs.

And that’s just the tip of the iceberg, we also offer:

1. Fast sign up - typically onboard in less than 10 minutes‍

2. Screened and categorised ETFs - All funds are screened to meet our transparency and sustainability information standards

3. Impact reporting - up to date reports including UN SDG revenue alignment

4. Cutting edge tools -  ETF comparison tools based on impact, risk and returns

5. Sustainable ISA - create a new ISA or transfer your existing one with our help

6. Great customer support - we are always here to help!

Join the future of investing and start your free GOODFOLIO account today!

As with all investing, your capital is at risk.

Sources:

WHO/UNICEF 2021 and OECD 2012 

https://www.un.org/en/observances/water-day‍https://www.unicef.org/wash/water-scarcity