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Water ETF on New All-Time Highs: Should We Worry?

In February this year, the ETF Invesco Water Resources, surpassed the old high of around $61 set in December 2021.

On March 8th, 2024, PHO made a new all-time high at $65.12.

Should we worry when water-WATER-the most essential raw material for mankind’s existence is at new all-time highs?

And what does that mean for commodities and inflation?

“PHO is a water-themed fund of US companies that create products that conserve and purify water for homes, businesses, and industries.

Holdings are weighted by liquidity, with no more than five companies capped at 8% and with the rest distributed equally.” etf.com

The top 4 PHO Sectors are:

  • Producer Manufacturing
  • Technology Services
  • Distribution Services
  • Health Technology

The top 5 holdings are:

8.19 Basic Materials
Ferguson PLC (NYSE:) 8.18 Industrials
Veralto Corp (NYSE:) 8.09 Industrials
Danaher Corp (NYSE:) 7.98 Healthcare
Roper Technologies (NASDAQ:)
7.98 Technology

There are currently six ETFs covering the water space, but only four of them have more than $100 million in assets under management.

PHO is the top one.

Water shortages are expected to increase in the following years.

 “water scarcity is expected to worsen as the global population continues to *****. By 2030, demand for global freshwater is projected to exceed supply by 40%,” Fidelity

How frightening that all sounds.

Can AI Produce Water?

Actually, AI is taking water from the desert.

For now, companies like

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(NASDAQ:) are working towards partnering with power providers to bring more solar and wind energy online and put water back into the lakes and rivers.

Cross purposes as they continue to expand OpenAI.

PHO has been a holding in our GEMS model since December. We are close to our first profit target.

The chart shows you how this crossed the old all-time high and this year’s January 6-month calendar range high at the same time.

While PHO was outperforming , it is currently slightly underperforming.

Real Motion shows the mean reversion in early March but no real bearish divergences of concern.

61.50 level is massive support.

Through 65.12 it is possible to see a move to 67.00. PHO is slow-moving.

We think the relationships between the climate and AI are interesting.

We wonder how this impacts other commodities as well, especially the ones that also pull water from lakes and rivers in order to cultivate.

ETF Summary

  • S&P 500 (SPY) 510 pivotal
  • Russell 2000 (IWM) 205 area support to hold
  • Dow (DIA) 385 support 400 resistance
  • Nasdaq (QQQ) 435 key support
  • Regional banks (KRE) 45-50 range
  • Semiconductors (SMH) 221 support and if clears 230 back in business
  • Transportation (IYT) 69 area now support
  • Biotechnology (IBB) 140-142 resistance 135 support
  • Retail (XRT) 73 support 77 resistance
  • iShares iBoxx Hi Yd Cor Bond ETF (HYG) 77 big number to hold. Over 78 risk ON



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[Ecolab Inc, Danaher Corporation, Roper Technologies Inc, Invesco Water Resources ETF
#Water #ETF #AllTime #Highs #Worry

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