Photo: Alaskan Dude via Flickr
As the global food crisis rages, the investment everyone is looking at water.Bloomberg‘s Mark Gilbert identified a cascading interest in water investments, especially among hedge funds. Water was also a touchstone issue last week at Davos.
Recently, the World Bank announced a water data-driven endeavour to help the private sector get more involved in water financing. New instruments and strategies for water investing are being developed everyday.
Total water infrastructure spending is expected to reach $800 billion over the next decade, according to the OECD.
Now how the heck do you invest in water?
Companies: Consolidated Water Co., Badger Meter, Tetra Tech, The Gorman-Rupp Co.
Details: The best water companies to invest in are engaged in activities in the water sector including pumping, filtering, delivering or collecting waste water as well as water consulting and technology companies.
Mutual funds focused on water company investments returned 45% for the 12 months ending March 31, 2010. The 12-month period before that, it was down 38%.
The sector is set to reach $1 trillion by 2030.
Companies:: Nestle, Coca-Cola, Pepsi, Crystal Geyser, Danone
Details: With investments in water infrastructure increasing, rapidly water sustainability is expected to break through as a mainstream investment option.
Technologies for water purification and transport systems will then have to be developed which presents another major investment opportunity.
The bottled water industry might be set to make massive profits. In the U.S. alone, $150 billion must be invested by 2016 to comply with safe drinking laws.
Countries: China, Brazil, India and Indonesia
Details: Access to clean water for health and food production is one of the better long-term investments. Claymore S&P Global Water and PowerShares Global Water include holdings in emerging and developing markets.
Certain emerging markets such as China are going to spend a lot of money on water improvement over the next few years such as China which spent $50 billion in 2010.
Other regions that will be spending a lot of money on water improvement include Brazil, India and Indonesia.
Companies: American Water Works, Kurita Water Industries, Nalco Holding
Details: It lists 50 of the world's best water companies. Most of the companies that make up the top 10 are large and heavily government-regulated companies.
American Water Works is the largest public water waste water utility in the U.S. It serves about 16 million people in 35 states and two Canadian provinces.