The Invesco Global Water ETF (PIO) was launched on 06/13/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco. PIO has been able to amass assets over $237.02 million, making it one of the average sized ETFs in the Industrials ETFs. Before fees and expenses, PIO seeks to match the performance of the NASDAQ OMX Global Water Index.
The NASDAQ OMX Global Water Index is designed to track the performance of companies worldwide that are creating products that conserve and purify water for homes, businesses and industries.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With one of the most expensive products in the space, this ETF has annual operating expenses of 0.75%.
The fund has a 12-month trailing dividend yield of 0.91%.
Sector Exposure and Top Holdings
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.
Looking at individual holdings, Ecolab Inc (ECL) accounts for about 8.87% of total assets, followed by Roper Technologies Inc (ROP) and Pentair Plc (PNR).
The top 10 holdings account for about 55.6% of total assets under management.
Performance and Risk
The ETF has lost about -1.32% and is down about -8.89% so far this year and in the past one year (as of 04/10/2025), respectively. PIO has traded between $35.79 and $43.54 during this last 52-week period.
PIO has a beta of 1.01 and standard deviation of 18.84% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 48 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Global Water ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
First Trust Water ETF (FIW) tracks ISE Clean Edge Water Index and the Invesco Water Resources ETF (PHO) tracks NASDAQ OMX US Water Index. First Trust Water ETF has $1.65 billion in assets, Invesco Water Resources ETF has $1.98 billion. FIW has an expense ratio of 0.53% and PHO charges 0.59%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs.
Bottom Line
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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Invesco Global Water ETF (PIO): ETF Research Reports Ecolab Inc. (ECL): Free Stock Analysis Report Roper Technologies, Inc. (ROP): Free Stock Analysis Report Pentair plc (PNR): Free Stock Analysis Report First Trust Water ETF (FIW): ETF Research Reports Invesco Water Resources ETF (PHO): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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