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Guggenheim Global Water ETF (CGW)

You’ll receive your new, re-redesigned monthly Investment Digest issue this afternoon. I’d love to know what you think of the new issue – you can email me your comments at chloe@dickdavis.com.

Today’s Daily Alert recommendation is a long-term ETF play from Unconventional Wealth.

Guggenheim Global Water ETF (CGW)
from Unconventional Wealth

Water distribution infrastructure...

You’ll receive your new, re-redesigned monthly Investment Digest issue this afternoon. I’d love to know what you think of the new issue – you can email me your comments at chloe@dickdavis.com.

Today’s Daily Alert recommendation is a long-term ETF play from Unconventional Wealth.

Guggenheim Global Water ETF (CGW)

from Unconventional Wealth

Water distribution infrastructure and growing water scarcity are the biggest public health and investing issues facing the next generation. If you take action today, you stand to collect significant gains in the months and years ahead.

Water falls under the heading of “unconventional asset” today because, to most observers, water is a boring story with limited upside. ... Conventional investors buy water utilities for the price stability and the history of reliable dividends. [But we think] water will be to the 21st century what crude oil was to the 20th. Political instability and even war will result from governments exerting influence while seeking to control water resources in your children’s lifetimes. In this century, water as a commodity will prove more critical than gold on a day-to-day basis. ...

The Guggenheim Global Water ETF (CGW) contains 53 stocks. Component stocks have an average market cap of $7.7 billion with an average price-to-earnings ratio of 18.4 and an average price-to-book ratio of 2. ... The largest holding as of July 23 is Pentair (PNR), at 7.15% of assets, followed by Geberit AG (Switzerland), at 5.85%, and American Water Works (AWK), at 5.84%. ...

At writing, 49.89% of the component stocks in CGW comes from the industrials sector. That means nearly half of the ETF is comprised of stocks that provide the infrastructure for water collection, storage or delivery. Furthermore, 39.43% of the stock weight comes from water utilities. Altogether, this tight, direct focus on water and how it comes to your home makes up 89.32% of CGW. ... Nearly nine shares in 10 of CGW’s total composition directly lock in with the reason why we want to own it. This focus is a security blanket.

I’m also pleased that among the geographic weights, 38.58% of the ETF is based in the United States. The UK, Switzerland, France and Sweden round out the top five countries, good for a total of 76.03% of the total exposure. You’ll notice these are, of course, large, established economies with large urban populations.

Twenty years ago, you could buy gas for 98 cents per gallon. Today the national average is $3.48. Similarly, today 1,000 gallons of water cost around $1.50. That’s less than a penny per gallon. Eventually, in our lifetimes, the price we pay for water will be much more in line with water’s true scarcity and value. Buying CGW at today’s prices and holding it for the long term is a fast, direct and efficient way to play this story—before others are greedy for it. ...

Action to Take: Buy the Guggenheim Global Water ETF (CGW) today, and hold for the long term. [Try to] buy CGW for $25.50 or less.

Andrew Snyder, Unconventional Wealth, www.insidersstrategygroup.com, 888-811-9492, September 2013