Should You Invest in the Invesco Water Resources ETF (PHO)?

If you're interested in broad exposure to the Industrials - Water segment of the equity market, look no further than the Invesco Water Resources ETF (PHO), a passively managed exchange traded fund launched on 12/06/2005.An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.Investor-friendly, sector ETFs provide many options 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 10, placing it in bottom 38%.Index DetailsThe fund is sponsored by Invesco. It has amassed assets over $2.09 billion, making it one of the larger 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.CostsWhen considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.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 0.46%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation in the Industrials sector--about 64% of the portfolio. Information Technology and Utilities round out the top three.Looking at individual holdings, Ferguson Enterprises Inc (FERG) accounts for about 8.34% of total assets, followed by Roper Technologies Inc (ROP) and Ecolab Inc (ECL).The top 10 holdings account for about 58.50% of total assets under management.Performance and RiskSo far this year, PHO has lost about -1.95%, and is up about 9.58% in the last one year (as of 01/13/2025). During this past 52-week period, the fund has traded between $58.49 and $72.14.The ETF has a beta of 1 and standard deviation of 19.15% 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.AlternativesInvesco Water Resources ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PHO is an outstanding option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.Invesco S&P Global Water Index ETF (CGW) tracks S&P GLOBAL WATER INDEX and the First Trust Water ETF (FIW) tracks ISE Clean Edge Water Index. Invesco S&P Global Water Index ETF has $853.50 million in assets, First Trust Water ETF has $1.74 billion. CGW has an expense ratio of 0.56% and FIW charges 0.53%.Bottom LineTo 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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco Water Resources ETF (PHO): ETF Research Reports Ecolab Inc. (ECL): Free Stock Analysis Report Roper Technologies, Inc. (ROP): Free Stock Analysis Report Invesco S&P Global Water Index ETF (CGW): ETF Research Reports First Trust Water ETF (FIW): ETF Research Reports Ferguson plc (FERG): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks