S&P sees boom in water investing
Ahead of the start of World Water Week on 5 September, research from S&P Indices shows the continued strong performance of water-related businesses.
The five year return of the S&P Global Water Index is now eclipsing more traditional equity indices.
Over the last five years, the total return of the S&P Global Water Index is +7.3 per cent, which compares favourably both to the S&P 500 (-0.2 per cent) and the S&P Global BMI (+2.9 per cent).
In recent years the relatively weak performance of established large cap and traditional equity stocks has been well documented, but the strong showing of water companies is less well known. There is little sign of a slowdown, with the value of constituents of the S&P Global Water Index rising by 32.7 per cent in 2009 and outperforming the S&P 500 by 6.2 per cent.
The S&P Global Water Index offers liquid and tradable exposure to the 50 largest listed water-based companies around the world.
European corporations are well represented within the index, with Swiss sanitary technology firm Geberit the largest individual company by weighting (10.24 per cent). French giant Veolia Environnement is the second most heavily weighted company (7.71 per cent), while the three major UK-listed water companies are also all among the top ten constituents.
Steve Goldin, vice president of strategy indices at S&P, says: “Water-based companies have been providing consistently strong returns. Specialty indices, such as the Global Water Index, are increasingly popular with investors. Due to its strong historic returns, we continue to witness investor demand.”
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