If you're interested in broad exposure to the Industrials - Water segment of the equity market, look no further than the Invesco S&P Global Water Index ETF (CGW), 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.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. 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%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $853.50 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Water segment of the equity market. CGW seeks to match the performance of the S&P GLOBAL WATER INDEX before fees and expenses.

The S&P Global Water Index comprises of developed market securities including water utilities, infrastructure, equipment, instruments and materials.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.56%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 2.36%.

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) accounts for about 7.83% of total assets, followed by Xylem Inc/ny (XYL) and United Utilities Group Plc (UU/).

The top 10 holdings account for about 53.13% of total assets under management.

Performance and Risk

So far this year, CGW has lost about -3.76%, and is up about 2.38% in the last one year (as of 01/13/2025). During this past 52-week period, the fund has traded between $50.57 and $61.20.

The ETF has a beta of 1 and standard deviation of 18.28% for the trailing three-year period, making it a low risk choice in the space. With about 74 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P Global Water Index 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, CGW is a sufficient 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) tracks ISE Clean Edge Water Index and the Invesco Water Resources ETF (PHO) tracks NASDAQ OMX US Water Index. First Trust Water ETF has $1.74 billion in assets, Invesco Water Resources ETF has $2.09 billion. FIW has an expense ratio of 0.53% and PHO charges 0.59%.

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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Invesco S&P Global Water Index ETF (CGW): ETF Research Reports

American Water Works Company, Inc. (AWK) : Free Stock Analysis Report

First Trust Water ETF (FIW): ETF Research Reports

Invesco Water Resources ETF (PHO): ETF Research Reports

Xylem Inc. (XYL) : Free Stock Analysis Report

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