The Invesco Water Resources ETF (PHO) offers investors exposure to the water sector, but is it worth your investment?
City: New York. If you’re looking to dive into the water sector, the Invesco Water Resources ETF (PHO) might catch your eye. Launched back in 2005, this fund aims to give you a slice of the water industry.
It’s become a popular pick for both retail and institutional investors. Why? Well, these passively managed ETFs are known for being cost-effective, transparent, and flexible. Plus, they’re great for long-term investing.
PHO focuses on the Industrials – Water segment, which is one of the 16 sectors tracked by Zacks. Right now, it’s sitting in the bottom 38% of those sectors, so it’s not exactly the hottest pick out there.
Invesco sponsors this fund, which has over $2.09 billion in assets. That makes it one of the bigger players in the water ETF space. PHO aims to match the performance of the NASDAQ OMX US Water Index, which tracks companies that work on conserving and purifying water.
When you’re looking at ETFs, you’ve got to consider the costs. PHO has an expense ratio of 0.59%, which is pretty standard for this type of fund. It also offers a 12-month trailing dividend yield of 0.46%.
Even though ETFs spread out your risk, it’s still smart to check out what’s in the fund. PHO has about 64% of its portfolio in the Industrials sector, with some in Information Technology and Utilities. Ferguson Enterprises is its biggest holding at 8.34%, followed by Roper Technologies and Ecolab.
This year, PHO has dipped about 1.95%, but it’s up around 9.58% over the last year. The fund has traded between $58.49 and $72.14 in the past 52 weeks, showing some volatility.
With a beta of 1 and a standard deviation of 19.15%, it’s considered a medium-risk option. It has around 40 holdings, which gives it a bit more concentration than some other ETFs.
PHO has a Zacks ETF Rank of 2, which means it’s a “Buy.” If you’re keen on the water sector, it’s definitely worth considering. There are other options too, like the Invesco S&P Global Water Index ETF and the First Trust Water ETF, which track different indices and have slightly lower expense ratios.
For more info on this ETF and others, check out Zacks ETF Center. They’ve got a ton of resources to help you find what fits your investment goals.
