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Should You Invest in the Invesco Water Resources ETF (PHO)?
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The Invesco Water Resources ETF (PHO - Free Report) was launched on 12/06/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Industrials - Water segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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 7, placing it in top 44%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $1.64 billion, making it one of the largest ETFs attempting to match the performance of the Industrials - Water segment of the equity market. PHO 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.
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 0.59%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.76%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 56.90% of the portfolio. Utilities and Information Technology round out the top three.
Looking at individual holdings, Ferguson Plc (FERG - Free Report) accounts for about 8.83% of total assets, followed by Roper Technologies Inc (ROP - Free Report) and Ecolab Inc (ECL - Free Report) .
The top 10 holdings account for about 59.80% of total assets under management.
Performance and Risk
The ETF has lost about -2.96% so far this year and is up roughly 1.60% in the last one year (as of 10/30/2023). In that past 52-week period, it has traded between $48.12 and $58.32.
The ETF has a beta of 0.97 and standard deviation of 19.52% for the trailing three-year period, making it a medium risk choice in the space. With about 40 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Water Resources 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, PHO is a good 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.
Invesco S&P Global Water Index ETF (CGW - Free Report) tracks S&P GLOBAL WATER INDEX and the First Trust Water ETF (FIW - Free Report) tracks ISE Clean Edge Water Index. Invesco S&P Global Water Index ETF has $823.40 million in assets, First Trust Water ETF has $1.24 billion. CGW has an expense ratio of 0.57% and FIW charges 0.53%.
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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Should You Invest in the Invesco Water Resources ETF (PHO)?
The Invesco Water Resources ETF (PHO - Free Report) was launched on 12/06/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Industrials - Water segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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 7, placing it in top 44%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $1.64 billion, making it one of the largest ETFs attempting to match the performance of the Industrials - Water segment of the equity market. PHO 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.
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 0.59%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.76%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 56.90% of the portfolio. Utilities and Information Technology round out the top three.
Looking at individual holdings, Ferguson Plc (FERG - Free Report) accounts for about 8.83% of total assets, followed by Roper Technologies Inc (ROP - Free Report) and Ecolab Inc (ECL - Free Report) .
The top 10 holdings account for about 59.80% of total assets under management.
Performance and Risk
The ETF has lost about -2.96% so far this year and is up roughly 1.60% in the last one year (as of 10/30/2023). In that past 52-week period, it has traded between $48.12 and $58.32.
The ETF has a beta of 0.97 and standard deviation of 19.52% for the trailing three-year period, making it a medium risk choice in the space. With about 40 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Water Resources 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, PHO is a good 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.
Invesco S&P Global Water Index ETF (CGW - Free Report) tracks S&P GLOBAL WATER INDEX and the First Trust Water ETF (FIW - Free Report) tracks ISE Clean Edge Water Index. Invesco S&P Global Water Index ETF has $823.40 million in assets, First Trust Water ETF has $1.24 billion. CGW has an expense ratio of 0.57% and FIW charges 0.53%.
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.