Water is an overlooked commodity, particularly by investors who live in countries where drinkable water is readily available at the turn of a tap or faucet. But there are several compelling reasons to invest in water, and the technologies required to supply enough water to meet the world's demands. Only 1% of the world's available water is drinkable.
1. Recycling of waste water (grey water) is feasible and profitable. Up to 95% of the UK's waste water is recycled.
2. Desalination of sea water, also profitable, is expanding and may come to the UK in the not too distant future. Solar power can be used, making the whole process comply with ESG criteria.
3. Industrial and agricultural demand for water is expanding - for example it takes about 250 litres of water to make a T shirt, 100 litres of water to produce a kilogram of wheat, and 450,000 litres of water to make a car. (Stats from Moneyweek.)
4. Smart meter technology is growing - smart meters can reduce water usage.
5. Michael Burry (made famous in The Big Short) who manages Scion Capital hedge fund invests almost exclusively in water.
6. Water ETFs over the last 12 months have outperformed £EQQQ and the Nasdaq 100 index by around 5% with lower volatility - weekly ATR 2.3% vs. 2.8%.
7. The demand for water can only increase. It is estimated that world demand for water will grow by 55% between 2000-2050.
The best way to invest in water is probably through an ETF. I hold $CGW. But there are LSE based ETFs such as £IH20 and £WATL . DYOR.
