Water-Focused ETFs Have Some New Competition from Summit Water Capital Advisors

A new water equities-focused ETF just launched from Summit Water Capital Advisors, which joins a growing number of similar funds that have attracted substantial investor interest.

There is a new ETF entrant to the “Water Equities” segment that is worth looking at known as WTRX (Summit Water Infrastructure Multifactor, Expense Ratio 0.80%, $2.6 million in AUM) which launched on August 9 — just several trading sessions ago. Tracking the “Summit Zacks Global Water Index,” the fund joins a niche space that has four other products currently from PowerShares, Guggenheim, and First Trust:

  • PHO (PowerShares Water Resources Portfolio, Expense Ratio 0.61%, $717 million in AUM),
  • CGW (Guggenheim S&P Global Water, Expense Ratio 0.64%, $424 million in AUM),
  • PIO (PowerShares Global Water Portfolio, Expense Ratio 0.76%, $202 million in AUM), and
  • FIW (First Trust ISE Water, Expense Ratio 0.57%, $144 million in AUM).

Summit Water Capital Advisors is new to the ETF issuer space with this new ETF launch. WTRX is an interesting fund, because according to fund literature, “Summit Water Capital Advisors is a San Diego-based investment management firm with a 25-year focus on investment strategies in the global water industry. Summit Water leveraged its experience in developing unique proprietary methods for investing in water-related equities, physical water assets, and water infrastructure to create the Summit Zacks Global Water Index, the Summit Water Infrastructure Multifactor ETF’s underlying index.”

Rarely if ever have we seen an investment manager that claims expertise in the specific “Water Equity,” space. A viable sub-sector under the broad category of “Industrial Equities,” the fact that the four aforementioned funds have gathered the assets that they have is testament to investment interest in this space. Thus, we see no reason that another approach here from a seasoned manager of water related assets would not fare well in terms of raising new assets.

More specifically about WTRX (which we will cover in more depth in the future after more live trading registers simple technicals such as 20 and 50 day SMAs for actual technical analysis), “The Underlying Index generally consists of 30-50 stocks that are selected by Zacks Index Services from a universe of domestic and international companies involved in water-related businesses pursuant to the criteria and methodology.”

The most accomplished water-focused ETF, Powershares Water Resource Portfolio (NYSE:PHO) close at $24.46 yesterday, up +0.04 (+0.16%). PHO has gained nearly 13% year-to-date, almost double the return of the benchmark S&P 500 index in the same period.

PHO-2016-08-18

About the Author: Paul Weisbruch
paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.

Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.

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