messages have been looking at the potential of water investments
for over five years. Our belief is that water is an
commodity and its value will grow.
In the U.S. alone, water demand has tripled in the past 30 years,
while the population growth has been just 50%.
The 2003 Needs Assessment indicates that community water systems and
not-for profit non-community water systems need $276.8 billion over
the next 20 years to install, upgrade and replace infrastructure.
There are many influences that should drive growth in U.S. water
First, census figures show that the American population is growing
strongly. This increases the need for new or improved water
Second, there is a trend toward privatization and outsourcing of
government water operations.
Third, the water industry is becoming increasingly sophisticated.
Fourth increased regulations regarding water creates opportunity in
both the U.S. and abroad.
There is also growing consolidation in the water industry.
Water may be the most undervalued commodity in the market.
Plus this is a recession resistant, predictable and profitable
industry. Yet which water companies should we choose?
Many investors prefer to leave the specific decisions to
professionals. There are mutual funds and investment trusts that
invest in water, such as the Global Water Equities Portfolio.
This is an investment trust focused on investing in the utility sector
along with some foreign and small-capitalization companies, all doing
business somehow related to water.
The trust is managed by Boenning & Scattergood, the oldest independent
investment firm in the Philadelphia region. This firm has been in
business for over 90 years and has developed a particular expertise
and knowledge of the water industry, including water utilities,
filtration, equipment, chemical and engineering companies.
Boenning & Scattergood select the securities and provide ongoing
support relating to the U.S. Water Equities Portfolio, looks for
businesses that intend to operate in a socially and environmentally
correct way. They search for those that earn primary revenues and
growth from some aspect of the domestic potable water industry,
including: water supply, pumps and pipes, machinery and equipment,
filtration and purification, compliance and testing, utilities,
metering and distribution, construction and engineering, wastewater
treatment and recycling.
Recent portfolio holdings include:
CONSUMER DISCRETIONARY 3.00% of Portfolio
POOL SCP Pool Corporation
H E A LT H C A R E 1 .9
I N D U S T R I A L S 66.0
A.O. Smith Corporation
ESCO Technologies Incorporated
Franklin Electric Company Incorporated
General Electric Company
ITT Industries Incorporated
Lamson & Sessions Company
Layne Christensen Company
Lindsay Manufacturing Company
Mueller Industries Incorporated
Pico Holdings Incorporated
Roper Industries Incorporated
Watts Water Technologies Incorporated
MAT E R IAL S 9.97%
Arch Chemicals Incorporated
Calgon Carbon Corporation
NLC Nalco Holding Company
U T I L I T I E S 1
9.0 5 %
American States Water Company
Aqua America Incorporated
California Water Service Group
Middlesex Water Company
Southwest Water Company
This trust is offered by Claymore Securities, Inc. www.claymore.com
The code for this trust is CGWEAX.
Investors who want a broad spectrum of water investments should
investigate trusts such as this.
Until next message, good global investing!
We have plenty of water here in the sacred province of Imbabura which
along with the equatorial sun ripens rich crops for the market that
sits just down the street. The water is pure as well. We drink the
water here right from the tap! Come join us!