Should You Invest in the Invesco Water Resources ETF (PHO)?

Designed to provide broad exposure to the Industrials - Water segment of the equity market, the Invesco Water Resources ETF (PHO) is a passively managed exchange traded fund launched on December 6, 2005.Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Water is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.Index DetailsThe fund is sponsored by Invesco. It has amassed assets over $2.2 billion, making it one of the larger ETFs attempting to match the performance of the Industrials - Water segment of the equity market. PHO seeks to match the performance of the NASDAQ OMX US Water Index before fees and expenses.The NASDAQ OMX US Water Index tracks the performance of US exchange-listed companies that create products designed to conserve and purify water for homes, businesses and industries.CostsWhen considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.Annual operating expenses for this ETF are 0.59%, making it on par with most peer products in the space.It has a 12-month trailing dividend yield of 0.49%.Sector Exposure and Top HoldingsEven 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 62.4% of the portfolio. Utilities and Information Technology round out the top three.Looking at individual holdings, Ferguson Enterprises Inc (FERG) accounts for about 9.31% of total assets, followed by Ecolab Inc (ECL) and Roper Technologies Inc (ROP).The top 10 holdings account for about 60.13% of total assets under management.Performance and RiskSo far this year, PHO has gained about 8.05%, and it's up approximately 5.7% in the last one year (as of 07/25/2025). During this past 52-week period, the fund has traded between $58.13 and $72.14.The ETF has a beta of 0.99 and standard deviation of 18.19% for the trailing three-year period, making it a medium risk choice in the space. With about 38 holdings, it has more concentrated exposure than peers.AlternativesInvesco Water Resources 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, PHO 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 First Trust Water ETF (FIW) tracks ISE Clean Edge Water Index. Invesco S&P Global Water Index ETF has $983.39 million in assets, First Trust Water ETF has $1.88 billion. CGW has an expense ratio of 0.56%, and FIW charges 0.51%.Bottom LineTo 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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco Water Resources ETF (PHO): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks