Explore the potential benefits and risks of the First Trust Water ETF for your investment strategy
Chicago: The First Trust Water ETF (FIW) launched on May 8, 2007, aims to give investors broad exposure to the water sector. It’s a passively managed fund, which means it tracks a specific index rather than trying to outperform it.
This ETF is a solid choice for long-term investors. It’s popular among both retail and institutional investors because of its low costs and transparency. Plus, it offers a flexible way to invest in a specific sector without taking on too much risk.
FIW focuses on the Industrials – Water segment, which is part of the broader Zacks Industry classification. Right now, this sector is ranked 12 out of 16, putting it in the lower quarter of performance.
Managed by First Trust Advisors, the fund has over $1.77 billion in assets. It aims to match the performance of the ISE Clean Edge Water Index, which includes companies that earn a significant portion of their revenue from the water industry.
When picking an ETF, costs matter. FIW has an annual operating expense of 0.53%, which is pretty standard for similar funds. It also offers a 12-month trailing dividend yield of 0.69%.
Before investing, it’s smart to check out what the ETF holds. FIW has about 54.80% of its portfolio in the Industrials sector, with Utilities and Healthcare also making up a big part. Waters Corporation, Idex Corporation, and Pentair Plc are among its top holdings.
This ETF has seen a gain of about 0.84% this year and is up around 11.98% over the past year. It has traded between $91.05 and $110.91 in the last 52 weeks, showing some stability.
With a beta of 1.03, FIW is considered a medium-risk option. It has around 38 holdings, which gives it a more concentrated exposure compared to some other ETFs.
FIW has a Zacks ETF Rank of 3, which means it’s a “Hold” based on various factors like expected returns and expense ratios. If you’re looking for exposure to the water sector, it could be a good pick.
There are also other options like the Invesco S&P Global Water Index ETF and the Invesco Water Resources ETF, which track different indices and have their own unique features.
For more info on ETFs and to find ones that fit your investment goals, check out Zacks ETF Center. They also offer a free newsletter with the latest news and analysis.
