Insights

Investing in water around the world

Investing in this commodity will change your life. If you are looking for a new investment opportunity but don’t know where to begin, check your faucet. One of the most abundant and precious elements on Earth, water, is vital to our lives. We drink it, wash with it, provide nourishment for crops, along with various industrial uses. Would you believe me if I said that water was your next investment opportunity? Many experts are saying that the water industry is not getting the amount of attention it should be, most likely because it is often taken for granted. After drought conditions in the world., rising population, and rising demand for water, many are no longer oblivious to the opportunity. In 1990, global water use per capita was around 350 liters a day. By 2000, use nearly doubled to 640 liters. What people don’t realize is that, although our planet is mostly water, most of it is not usable or consumable. With 96% of the world’s freshwater in polar ice caps, only 1% is available drinking water. The rest is non-potable salt water. For many, water is a more precious resource than oil. One example that I will use throughout this article is China. China is a large country with a booming population that uses roughly 7-15 times more water than other developed countries. Because of this, the country faces a lot of problems when it comes to clean, sustainable water. Due to a growing population around the world and continued water use, and shrinking water supplies, investing in water should be on the radar of many global investors looking for a new investment opportunity. If you are interested in how exactly it is you invest in water, continue reading to explore the world of opportunity that has risen from the water industry. It’s not as difficult as some may think.

How to Invest in Water

Because water is and will be, the most important commodity for the world in the future, companies are dedicating themselves to water purification, transportation, storing, and bottling. These sectors are becoming increasingly recognized all over the globe. While most investors recognize this, none of the existing financial products currently available are offering a way to invest in sustainable water solutions. Most of the existing funds and ETFs are focusing on large multinational food conglomerates that mostly sell purified tap water, or on industrial companies that focus on desalination technologies that have proven to be the least economically viable way to clean water. Water is probably the most important commodity in the world. Unlike oil, there is nothing out there that does what water can do, so there is no competition. You can’t manufacture a product to mimic it, making it one of the greatest investment opportunities in existence. Water scarcity is a theme found all over the world that involves both climate change and demographics. As the population increases, the demand for water increases… and quickly! If the current rate continues, from factors such as human consumption and industrial and agricultural use, the global demand for water is going to outpace the current water supply. This is why water purification, desalination, and sustainability is an important and profitable business to tap into. All over the world, governments are allocating billions of dollars a year to environmental protection to clean up polluted waters. China, for example, allocated $110 billion dollars to that in its Five-Year Plan. The next plan will require more to address the continuing water issues. Companies that are focused on addressing the increased water issues are predicted to experience the best growth opportunities for investors. You can’t actually invest in the water itself as a traded commodity, not yet at least. Instead, you would invest in companies that gain their revenue from services involving water. Many companies are dedicated to pursuing opportunities like utilities, manufacturing, and technology surrounding clean water. One avenue of this is the exploration, desalination, and wastewater treatment plans that develop new water infrastructure. The second way is looking for companies that are developing improved irrigation, leakage detection, and smart meters that create effective solutions for reducing demand, which ultimately promotes the sustainable use of the available sources. A third avenue would be companies at the forefront of developing filtration technologies and disinfection chemicals. These investment opportunities exist all over the world, and the number of exchange-traded funds that offer diversified exposure to water-related stocks is growing. The ETFs usually hold a range of overseas listings in countries where the scarcity of water makes this kind of investment a long-term opportunity. China, for example, is home to 20% of the world’s population, but less than 7% of renewable water resources. Some experts are more fond of subsectors of water investment that involve testing and monitoring, and companies that make special equipment like filters and pumps. These investments have high barriers to entry and recurring revenues.

Investing in Water with Alpen Partners

Like with all investments and financial situations, Alpen Partners is equipped to assist in your journey of investing in water. Though this may not bring in money right away, the theme of scarcity of water is a long-term investment that will prove to be a staple in your portfolio down the road. Alpen Partners has developed an extensive network of specialists focusing on the theme of water investing. Our goal is to find the best investment opportunity for you, whether it’s in water or otherwise. We will offer our clients the opportunity to invest in listed and private companies that are showing unique technologies and IPs, and who will, therefore, reap the benefit of the need for clean water in the future. While sustainable and socially responsible, these investments will also prove to be very profitable in the long run. Water investment can even tie into the world of impact investing. Don’t hesitate. Sustainable, drinkable, and usable water may rely on you and your investment. Alpen Partners Opinion Investing in commodities is probably one of the most underrated types of investments that we utilize. What’s great about commodities is that they are easily understood by any type of investor. These are resources that are used every day by every person in the world. When investing in commodities, like water, there is a greater sense from the client on influencing the world. As we repeatedly say, diversification is key in any successful portfolio, and commodities are just another piece of this complicated puzzle. All investments involve certain risks. All investments carry the potential for financial loss, including the loss of the principal amount invested. Past performance should not be viewed as an indicator of future results. Market conditions and broader economic factors can significantly impact the value of investments. Investments in international markets are subject to additional risks, such as currency exchange fluctuations, political or economic instability, and variations in accounting practices. Alternative investments, including but not limited to hedge funds, private equity, and real estate, may be illiquid, speculative, and are not suitable for all investors. The above information should be considered before making any investment decisions. All posts and publications are for your information only and are not intended as an offer, promotion, or solicitation to buy or sell any financial instrument or perform any other financial transactions. All information and opinions expressed in posts and publications reflect our current views as of the date of the publication and may be liable to change without notice.