Looking for broad exposure to the Industrials - Water segment of the equity market? You should consider the First Trust Water ETF (FIW), a passively managed exchange traded fund launched on 05/08/2007.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Water is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.74 billion, making it one of the larger ETFs attempting to match the performance of the Industrials - Water segment of the equity market. FIW seeks to match the performance of the ISE Clean Edge Water Index before fees and expenses.
The ISE Clean Edge Water Index is a modified market capitalization-weighted index comprised of exchange-listed companies that derive a substantial portion of their revenues from the potable and wastewater industry.
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.53%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.70%.
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 49% of the portfolio. Utilities and Healthcare round out the top three.
Looking at individual holdings, Waters Corporation (WAT) accounts for about 4.85% of total assets, followed by Roper Technologies, Inc. (ROP) and Agilent Technologies, Inc. (A).
The top 10 holdings account for about 40.39% of total assets under management.
So far this year, FIW has lost about -0.40%, and was up about 3.79% in the last one year (as of 03/17/2025). During this past 52-week period, the fund has traded between $96.61 and $110.91.
The ETF has a beta of 1.04 and standard deviation of 18.76% for the trailing three-year period, making it a medium risk choice in the space. With about 37 holdings, it has more concentrated exposure than peers.
First Trust Water ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FIW is a sufficient option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Invesco S&P Global Water Index ETF (CGW) tracks S&P GLOBAL WATER INDEX and the Invesco Water Resources ETF (PHO) tracks NASDAQ OMX US Water Index. Invesco S&P Global Water Index ETF has $899.92 million in assets, Invesco Water Resources ETF has $2.10 billion. CGW has an expense ratio of 0.56% and PHO charges 0.59%.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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First Trust Water ETF (FIW): ETF Research Reports
Waters Corporation (WAT) : Free Stock Analysis Report
Agilent Technologies, Inc. (A) : Free Stock Analysis Report
Roper Technologies, Inc. (ROP) : Free Stock Analysis Report
Invesco S&P Global Water Index ETF (CGW): ETF Research Reports
Invesco Water Resources ETF (PHO): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
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