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Should You Invest in the Invesco S&P Global Water Index ETF (CGW)?

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If you're interested in broad exposure to the Industrials - Water segment of the equity market, look no further than the Invesco S&P Global Water Index ETF (CGW), a passively managed exchange traded fund launched on 05/14/2007.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Water is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $587.46 M, making it one of the average sized ETFs attempting to match the performance of the Industrials - Water segment of the equity market. CGW seeks to match the performance of the S&P GLOBAL WATER INDEX before fees and expenses.

The S&P Global Water NR Index is comprised of approximately 50 equity securities, selected from a universe of companies listed on global developed market exchanges, which include water utilities, infrastructure, equipment, instruments and materials.

Costs

When 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 0.61%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.75%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, American Water Works Co Inc (AWK) accounts for about 9.24% of total assets, followed by Xylem Inc/ny (XYL) and Idex Corp (IEX).

The top 10 holdings account for about 50.12% of total assets under management.

Performance and Risk

The ETF has lost about -2.31% and is up roughly 6.80% so far this year and in the past one year (as of 08/13/2018), respectively. CGW has traded between $32.79 and $36.40 during this last 52-week period.

The ETF has a beta of 0.86 and standard deviation of 13.15% for the trailing three-year period, making it a low risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.

Bottom Line

To 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 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

GUGG-SP GL WAT (CGW): ETF Research Reports

American Water Works (AWK): Free Stock Analysis Report

Xylem Inc. (XYL): Free Stock Analysis Report

IDEX Corporation (IEX): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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