How to create a splash with liquid assets

THE WORLD will always need water, so surely it’s a sensible investment?

H20 is a precious commodity and becoming increasingly scarce, leading some to dub it ‘blue gold’.

The global water industry is also expected to become worth a trillion dollars a year within a decade.

Climate change is understood to be altering weather patterns — causing water shortages and droughts in some areas, and devastating floods in others, according to the World Wildlife Fund (WWF).

Brazil has this year been hit with the worst-ever recorded drought, meanwhile Madagascar’s shortage is so severe it is leading to famine. At the same time, floods in Germany and Belgium this summer caused more than 180 deaths.

The WWF predicts that by 2025, two-thirds of the world’s population may face water shortages unless a solution is found.

Rob Burgeman, investment manager at wealth advisers Brewin Dolphin, says there are funds available to retail investors that are focused on enhancing the future treatment and purification of water services.

He says: ‘There will be few countries that do not need to invest billions over the next 20 years to improve their water and waste services while addressing water shortages.

‘As an investor, there are ways of getting access to this through a selection of exchange traded funds (ETF) and funds that offer exposure to this important industry.

‘As ever, it is always best to seek financial advice to ensure your portfolio is diversified as effectively as possible.’

He says the iShares Global Water ETF gives exposure to the top 50 stock market firms involved in waterrelated business.

Holdings include American Water Works, Veolia Environmental and United Utilities. A £10,000 investment made five years ago, with dividends reinvested, would now be worth £20.381.

Meanwhile, the L&G Clean Water ETF aims to track the performance of a basket of stocks of companies that are involved in the international clean water industry. A £10,000 investment made two years ago, when the fund was launched, would now be worth £15,259.

The Axa Framlington Global Clean Economy Fund also offers exposure to water and the sustainability of water supply. The fund has turned £10,000 into £17,735 in two years.

Mr Burgeman also suggests the new Fidelity Sustainable Water and Waste Fund that invests in worldwide water and waste management companies.