For investors seeking momentum, Invesco Global Water ETF PIO is a reasonable bet. The fund just hit a 52-week high, up roughly 22% from its 52-week low price of $22.13/share.
Are more gains in store for this ETF? Let's take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
PIO in Focus
The fund looks to track the NASDAQ OMX Global Water Index, which is designed to track the performance of companies creating products that conserve and purify water for homes, businesses and industries globally.
United States accounts for about 55.5% of the fund, followed by United Kingdom (13.8%) and Switzerland (7.3%). It charges 75 bps in fees (see all industrial ETFs here).
Why the Move?
Demand for potable water and wastewater services is steadily increasing , thereby creating opportunities for growth and expansion for the water utility industry. Considerable funding is needed to upgrade the quality of the U.S. water infrastructure, while the federal funding has been on the decline. So, companies in the industry are being relied upon for taking on an initiative to upgrade water infrastructure. This puts the industry in focus. Since American stocks form half of the fund, the U.S. scenario is sure to move it.
More Gains Ahead?
The fund has a positive weighted alpha of 7.70 , which hints at more gains. So, there is definitely some promise for those who want to ride on this ETF a little longer.
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