Water funds to soak the portfolio with an average return of 12%

Almost 30% of the world’s population has limited access to clean water, and more than 60% do not have sustainable sanitation facilities. This, which is called water stress, will probably increase, as he explains: “Due to population growth, urbanization, the increase in living standards, climate change and the increase in the production of food and raw materials, to By 2030, more than two-thirds of people will be affected by water-related problems at some point in their lives,” he told

Hence, among the 17 SDGs (United Nations Sustainable Development Goals), objective number 6 is to “guarantee sustainable water management and access to drinking water, as well as an adequate supply system”. Precisely next Tuesday, March 22, World Water Day is celebrated.

Making a pair of jeans supposes a consumption of 8,000 liters of water; is what is called “water footprint”

There are ESG investment funds (which follow environmental, social and good governance criteria) that address this problem. Many of them are classified as Article 9 according to the since they pursue a specific sustainability objective (Article 8 funds, for their part, “promote sustainability characteristics”, and are, so to speak, less demanding than Article 9). In these portfolios we can find companies that offer products and services to facilitate efficient use of water, its treatment or its reuse, for example.

We are used to the expression carbon footprint (environmental impact indicator that is measured in terms of CO2 equivalent), but not so much to the water footprint, which describes the amount of water used to produce goods or perform certain services. “For example, a pair of jeans supposes a consumption of 8,000 liters of water and a cup of coffee 132 liters”, explains Thompsen. In a scenario in which saving water is an essential challenge, the water footprint is very useful to measure potential savings.

The latest report on water produced by the DWS Research Institute notes that the challenge now is for “retail and institutional investors to be aware of the risks linked to water, and also claims that “investment products that really deal with water water or other ESG risks should have lower fees” than non-sustainable ones.

If we stick to sustainable funds, which, according to Morningstar, focus on water, their 3-year annualized return reaches, on average, 11.6%. At 5 years, the funds that are that old, which are scarce, register, on average, 9.7%. And this year is being unlucky for ESG products focused on this resource: they leave, on average, 13.8%.

The BNP Paribas Aqua CC stands out, recording an annualized 14.5% in the three-year period, and 10.4% in the last five years. It invests in companies that “address the challenges related to water” and “support its protection and efficient use.” Among the main positions in the portfolio are American Water Works (basic services company that carries out its activity in the US and Canada); France’s Veolia (which offers water and waste management services), and Swiss pipe manufacturer Georg Fischer.

The RobecoSAM Sustainable Water Eqs M2 EUR has registered an annualized 13.7% in the three-year period, but only in 2022 does its decline reach 15.7%. It is positioned in companies that participate in the water resource value chain, and particularly in those that are “more efficient with it than others in their category.” 60% of its investment is made in the US, and the value with the most weight in the portfolio is PerkinElmer, a multinational focused on health and the environment.

For its part, Swisscanto’s SWC (LU) EF Sustainable Global Water AA rose by 13.6% annualized in the three-year period. In 2021 it shot up more than 38%, but so far in 2022 it has fallen by 16.5%. In the portfolio, listed companies such as the US Waste Management, dedicated to waste management and environmental services, or Evoqua Water Technologies, which provides water treatment solutions.

The largest by wealth in this group of thematic funds is the Pictet-Water P EUR, whose main holdings include the Danaher conglomerate, and the British-American multinational Ferguson, which distributes plumbing and heating products. It rises 13.1% in the three-year period. And 8% annualized over 3 years, the Fidelity Sustainable Water & Waste Fund E Acc EUR rebounds, which shot up almost 31% last year and is down 15% this year. Almost half of its portfolio is in US companies, with benchmarks such as American Water Works.