Are water stocks a good investment?

Water is a basic essential of life, so there is a steady, long-term demand "stream" for water stocks. However, many companies in this sector operate as utilities and may face regulatory limits on profits. Water stocks are attractive to investors seeking predictable income, but might not be good choices for those seeking supersized growth.

What is the best way to invest in water?

Given the multifaceted nature of this business, taking a basket approach by buying multiple water stocks through an ETF can be a good way to gain full exposure to the water sector.

What is the largest water company in the U.S.?

American Water Works is the largest publicly traded water utility in the U.S.

Is Michael Burry investing in water?

Michael Burry, the investor made famous in "The Big Short," said in the late 2010s that he was heavily invested in water-related stocks. However, it is unclear whether he still has the same conviction since his largest positions currently are not in water-related stocks.

What is the largest investor-owned water utility in the U.S.?

American Water Works is the largest investor-owned water utility in the U.S.

Best Water ETFs for 2026 and How to Invest

The best ETFs to track the water business.

By Kristi Waterworth – Updated May 5, 2026 at 1:33 AM EST | Fact-checked by Frank Bass

+Fool.comon

Key Points

Water ETFs provide broad exposure to a critical sector with increasing demand due to scarcity.
Investing in water ETFs offers diversified access to utilities, technology, and infrastructure.
Top water ETFs vary, with some focused globally and others on specific subsectors like clean water.

Loading paragraph...

6 top water ETFs for 2026

Loading paragraph...

Data from Yahoo! Finance as of April 27, 2026
Company	Total Assets	Expense Ratio	Description
Invesco Water Resources ETF (NASDAQ:PHO)	$2.06 billion	0.59%	A top-heavy collection of water stocks ranging from filtration-tech makers to utilities to pumping-equipment makers.
First Trust Water ETF (NYSEMKT:FIW)	$1.85 billion	0.51%	A less concentrated portfolio heavy on water tech stocks but including companies working in many different parts of the water chain.
Invesco S&P Global Water Index ETF (NYSEMKT:CGW)	$1.2 billion	0.58%	An index-based ETF that tries to provide broad global water exposure via the S&P Index that tracks the world's 50 largest water-related companies.
Invesco Global Water ETF (NASDAQ:PIO)	$282 million	0.75%	A more concentrated global portfolio with some exposure to emerging markets and a higher expense ratio.
Tortoise Global Water ESG Fund (NYSEMKT:TBLU)	$57.9 million	0.40%	A relatively small entry with a focus on sustainability and ESG and low expenses.
Global X Clean Water ETF (NYSEMKT:AQWA)	$26.2 million	0.50%	An ETF focused on clean water through industrial water treatment, storage and distribution infrastructure, as well as purification and efficiency strategies.

Loading table...

1. Invesco Water Resources

Loading paragraph...

NASDAQ: PHO

Invesco Exchange-Traded Fund Trust - Invesco Water Resources ETF

Today's Change

(0.62%) $0.42

Current Price

$68.53

Key Data Points

AUM

$2.0B

Dividend Yield

0.59%

Expense Ratio

0.59%

Top Holdings

ROP

8.56%

ECL

8.47%

WAT

6.77%

Loading company_card...

Investment management company Invesco (IVZ +5.84%) dominates the water ETF market, and the Water Resources (PHO +0.62%) fund is its largest offering. Based on the Nasdaq U.S. Water Index, the fund seeks to track the performance of companies that purify, deliver, and conserve water for homes, businesses, and industries. It is not limited to companies doing business in the U.S., but it is heavily focused on stocks that trade on U.S. markets.

As of April 2026, the top five holdings in the Invesco Water Resources ETF were:

Roper (ROP +0.30%)
Waters (WAT +2.44%)
Ferguson (FERG +1.43%)
American Water Works (AWK -1.01%)
Ecolab (ECL -0.40%)

The five stocks represent almost 40% of total assets, and Invesco Water Resources has a 0.59% expense ratio.

2. First Trust Water

Loading paragraph...

NYSEMKT: FIW

First Trust Exchange-Traded Fund - First Trust Water ETF

Today's Change

(0.64%) $0.68

Current Price

$107.09

Key Data Points

AUM

$1.8B

Dividend Yield

0.73%

Expense Ratio

0.50%

Top Holdings

WAT

4.93%

4.53%

ROP

4.36%

Loading company_card...

The water ETF sponsored by First Trust Advisors is based on the ISE Clean Edge Water Index, which comprises companies that derive a substantial portion of their revenue from the potable and wastewater industry. That can include utilities and other companies, but the index is weighted toward the companies that make the tech that helps to make water safe to drink.

As of April 2026, the top five holdings in the First Trust Water ETF (FIW +0.64%) were:

Ferguson
Mueller Industries (MLI +3.77%)
Roper
American Water Works
Waters

The five stocks represent about 21% of total assets, and the ETF has an expense ratio of 0.51%.

Loading paragraph...

3. Invesco S&P Global Water Index

Loading paragraph...

NYSEMKT: CGW

Invesco Exchange-Traded Fund Trust II - Invesco S&P Global Water Index ETF

Today's Change

(0.43%) $0.28

Current Price

$64.67

Key Data Points

AUM

$1.1B

Dividend Yield

1.54%

Expense Ratio

0.58%

Top Holdings

AWK

7.98%

XYL

7.61%

WTRG

5.87%

Loading company_card...

As the name implies, the Invesco S&P Global Water ETF (CGW +0.43%) gives you more international exposure and is based on the S&P Global Water Index. The fund aims to invest at least 90% of its total assets in securities tracking that index. The index the fund is based on measures the performance of the 50 largest global companies in water-related businesses.

As of late April 2026, the top five holdings in this fund were:

Advanced Drainage Systems (WMS +1.93%)
American Water Works
Xylem (XYL +0.23%)
Watts Water Technologies (WTS -0.01%)
Zurn Elkay Water Solutions (ZWS -0.06%)

The five stocks represent about 37% of total assets, and the ETF has an expense ratio of 0.58%.

4. Invesco Global Water ETF

Loading paragraph...

NASDAQ: PIO

Invesco Exchange-Traded Fund Trust II - Invesco Global Water ETF

Today's Change

(0.85%) $0.38

Current Price

$44.82

Key Data Points

AUM

$279M

Dividend Yield

0.90%

Expense Ratio

0.75%

Top Holdings

ROP

8.68%

ECL

8.59%

PNR

8.24%

Loading company_card...

This, too, is an index fund. It tracks the Nasdaq OMX Global Water Index. About 55% of fund assets are based in the U.S., followed by Japan, Brazil, and Switzerland.

As of April 2026, the top five holdings in the Invesco Global Water ETF (PIO +0.85%) fund were:

Roper
Cia de Saneamento Básico do Estado de São Paulo (SBS +2.46%)
Pentair (PNR +1.79%)
Ecolab
Ebara (EBCOY +1.78%)

The five stocks represent about 40% of total assets, and the ETF has an expense ratio of 0.75%.

Loading paragraph...

5. Tortoise Global Water Fund

Loading paragraph...

NYSE: TBLU

Tortoise Capital Series Trust - Tortoise Global Water Fund

Today's Change

(0.38%) $0.19

Current Price

$50.92

Key Data Points

AUM

$57M

Dividend Yield

3.49%

Expense Ratio

0.40%

Top Holdings

FERG.LN

7.92%

AWK

7.84%

XYL

7.14%

Loading company_card...

Tortoise Global Water Fund (NYSE:EBLU) is a relatively new entry in water ETFs and has a focus on sustainability. The fund will invest only in companies that derive at least 50% of their revenue from the water industry or are ranked as top companies in a water category. Companies must also rank high on an environmental, social, and governance (ESG) screen.

As of April 2026, the fund had 44 total holdings. The top five were:

Ferguson
American Water Works
Veolia Environnement (VEOEY -0.90%)
Xylem
Ecolab

The five stocks together account for about 38% of the portfolio, and the ETF has an expense ratio of 0.40%.

6. Clean Water ETF

Loading paragraph...

NASDAQ: AQWA

Global X Funds - Global X Clean Water ETF

Today's Change

(0.05%) $0.01

Current Price

$18.99

Key Data Points

AUM

$24M

Dividend Yield

1.57%

Expense Ratio

0.50%

Top Holdings

AWK

8.59%

XYL

8.01%

FERG

7.33%

Loading company_card...

The Clean Water ETF (AQWA +0.05%) is a small fund that seeks to invest in clean water through industrial water treatment, storage, and distribution infrastructure, as well as companies focused on purification and distribution.

As of April 2026, the fund's top five holdings were:

American Water Works
Xylem
Ferguson
Pentair
United Utilities Group (UUGRY +0.20%)

The five stocks account for about 38% of the portfolio, and the ETF has an expense ratio of 0.50%.

Loading paragraph...

How to buy water ETFs

Open your brokerage account: Log in to the account where you manage your investments. If you don't have one yet, take a look at our favorite brokers and trading platforms to find the right one for you.
Search for water stocks: Enter the ticker symbol in the search bar to open the stock's trading page.
Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
Submit your order: Confirm the details and submit your buy order.
Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

Loading paragraph...

Benefits and risks of investing in water ETFs

Water ETFs work by pooling investor money to buy a diversified basket of stocks in companies across the entire water industry, from utilities and infrastructure to technology. The idea is to give investors broad sector exposure through a single trade, addressing essential global demand and scarcity.

They provide exposure to critical areas such as water infrastructure, technology, and utilities, enabling you to invest in solutions to address water scarcity and management. However, because of this, there are significant risks, as well as many benefits, to buying them:

Essential, universal utilities. Water utilities are essential and non-discretionary. There's no solar panel equivalent that could compete with water utilities on any scale; people need water to drink, or they die. This makes them a relatively good bet as an industry, since demand is going to be steady and indefinite.

Aging infrastructure. In many parts of the world, infrastructure is reaching a critical point, which is both a blessing and a curse for water stocks. On one hand, many of these companies provide upgrades to water systems; on the other hand, some will pay for them.

Regulated utility prices. In some places, utility prices are set by regulators and don't reflect the actual cost of upgrades and maintenance, which can be costly. In these areas, it's important to ensure that the stocks you choose can continue to weather increased upkeep costs without the ability to self-price the clean water they produce. However, this may also lead to innovation, which can help everyone.

Should you invest in water ETFs?

Water stocks aren't for everyone, but they are for investors with a very long time horizon who aren't looking for market-beating companies right out of the gate. These companies support continued habitability in regions across the globe, making them a sustainable and ethical choice as well.

Some factors to consider when choosing a water ETF:

What is the focus? Is this ETF leaning towards utilities or water technology? Or a mix of both?
What are your goals? Some ETFs aim to maximize income, while others focus on growth. Read about individual ETFs on their fund pages and see whether their goals are a good match for what you want.
Check expenses. ETFs' expenses (as measured by the expense ratio) can vary. Higher fees make it harder to beat the market.

Loading paragraph...

Are water ETFs right for you?

Water isn't the most glamorous investment, but it is hard to think of a commodity more critical to society. Nations have gone to war over access to water. Those days are hopefully behind us, but given how widely water is used and the limited supply available in many parts of the world, water should be an area of significant investment and growth in the years to come.

Buying into the water industry can also provide a nice counterweight to more speculative tech investments or boom-and-bust cyclical companies. Buying ETFs instead of individual companies provides an easy way to gain geographic and subsector diversification without devoting too much of your portfolio to a single industry.

Loading paragraph...

FAQ

Loading paragraph...

Water ETFs FAQ

Loading faq...

About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

TMFMaldivesBlue

@MaldivesBlues

Kristi Waterworth has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Drainage Systems, Mueller Industries, and Xylem. The Motley Fool recommends Ecolab and Roper Technologies. The Motley Fool has a disclosure policy.

Best Water ETFs for 2026 and How to Invest

The best ETFs to track the water business.

Key Points

6 top water ETFs for 2026

1. Invesco Water Resources

Key Data Points

2. First Trust Water

Key Data Points

3. Invesco S&P Global Water Index

Key Data Points

4. Invesco Global Water ETF

Key Data Points

5. Tortoise Global Water Fund

Key Data Points

6. Clean Water ETF

Key Data Points

How to buy water ETFs

Benefits and risks of investing in water ETFs

Should you invest in water ETFs?

Are water ETFs right for you?

Related investing topics

Top Agriculture Stocks for 2026 and How to Invest

Best Food Stocks to Buy in 2026: Are They Right For Your Portfolio?

Best Consumer Staples Stocks to Buy in 2026 and How to Invest in Them

Best Vegan Stocks to Buy in 2026: Are They Right For Your Portfolio?

FAQ

Water ETFs FAQ

About the Author

Read Next

Stocks Mentioned

Motley Fool Stock Advisor’s Latest Pick

Premium Investing Services

Top Agriculture Stocks for 2026 and How to Invest

Best Food Stocks to Buy in 2026: Are They Right For Your Portfolio?

Best Consumer Staples Stocks to Buy in 2026 and How to Invest in Them

Best Vegan Stocks to Buy in 2026: Are They Right For Your Portfolio?

Water ETFs FAQ

Are water stocks a good investment?

What is the best way to invest in water?

What is the largest water company in the U.S.?

Is Michael Burry investing in water?

What is the largest investor-owned water utility in the U.S.?

1. Invesco Water Resources

3. Invesco S&P Global Water Index

5. Tortoise Global Water Fund

How to buy water ETFs

Benefits and risks of investing in water ETFs

Should you invest in water ETFs?

Are water ETFs right for you?

Related investing topics

FAQ

6 top water ETFs for 2026

Key Data Points

Key Data Points

Key Data Points

Key Data Points

Key Data Points

Key Data Points

2. First Trust Water

4. Invesco Global Water ETF

6. Clean Water ETF