Water is a limited resource – yet demand keeps growing. At the same time, climate change greatly affects the availability and quality of clean water through droughts and floods.
Given that water plays a central role in food production, growing demand for food from growing populations means a greater need for water. Urbanisation also drives demand. In emerging economies, millions of people are moving to the cities, and their clean water needs are only increasing.
Water plays a vital role in the production of, for example, clothing, paper, and – in an ultra-clean form – smartphones. Furthermore, there is strong demand for water infrastructure: this includes pipes, pumps, and purification and wastewater treatment plants.
Water is a billion-dollar growth market, and we believe it is likely to remain so for many decades. Accordingly, we see this area as an exciting global investment opportunity.
Watch our video to find out what the water value chain has to offer investors
Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. This document does not constitute investment advice.
The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns.
Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions).
Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.