What are water ETFs?
Water ETFs own companies tied to water: utilities that deliver it, makers of pumps, pipes, valves and filters, suppliers of treatment chemicals, and firms that test water quality. This guide covers seven funds with about $5.3 billion in combined net assets. The same stocks turn up again and again. Xylem is held by all seven funds, American Water Works by six, Ecolab and Ferguson Enterprises by five, and Veralto, Watts Water Technologies and Advanced Drainage Systems by four.
All seven are index funds, meaning each follows a published list of stocks instead of a manager's picks. None is leveraged, inverse or built around options. The indexes define water differently. PHO tracks the Nasdaq OMX US Water Index and FIW the ISE Clean Edge Water Index. CGW follows the S&P Global Water Index, and its top holdings include utilities such as American Water Works and Essential Utilities. PIO, TBLU and AQWA follow other global water indexes. IWTR's index can also include companies chosen for efficient water management, and its top holdings include Taiwan Semiconductor Manufacturing and Marriott International. Concentration varies too: FIW's 10 largest holdings make up 41% of the fund, TBLU's 60%.
The expense ratio is the yearly fee, taken as a share of the money invested. Its median across the group is 0.50%. TBLU charges the least at 0.40% and PIO the most at 0.75%. The two largest funds, PHO and FIW, charge 0.59% and 0.50%.
Investor money is highly concentrated. The five largest funds, PHO, FIW, CGW, PIO and TBLU, hold 99.4% of the group's assets. PHO has about $2.0 billion and FIW about $1.9 billion, while AQWA has about $24 million and IWTR about $6.4 million.
Water ETF holdings: the stocks most funds own
The stocks that show up most often among the largest positions of the 7 biggest water ETFs with holdings reports, from their latest N-PORT filings.
| Stock | Funds holding it | Typical weight |
|---|---|---|
| Xylem Inc. | 7 of 7 | 5.99% |
| American Water Works Co., Inc. | 6 of 7 | 4.12% |
| Ecolab Inc. | 5 of 7 | 7.12% |
| Ferguson Enterprises Inc. | 5 of 7 | 6.89% |
| Veralto Corp. | 4 of 7 | 3.77% |
| Watts Water Technologies Inc | 4 of 7 | 3.7% |
| Advanced Drainage Systems, Inc. | 4 of 7 | 3.32% |
| Roper Technologies, Inc. | 3 of 7 | 9.12% |
| Pentair PLC | 3 of 7 | 6.19% |
| Waters Corp. | 3 of 7 | 4.87% |
| Core & Main, Inc. | 3 of 7 | 4.2% |
| IDEX Corp. | 3 of 7 | 3.93% |
Typical weight is the median share of each fund’s assets in the stock, among the funds that hold it in their 25 largest positions.
The largest water ETFs, side by side
Swipe the table to see all 5 funds.
| PHO | FIW | CGW | PIO | TBLU | |
|---|---|---|---|---|---|
| Net assets | $2.00B | $1.86B | $1.05B | $273.4M | $52.9M |
| Expense ratio | 0.59% | 0.5% | 0.58% | 0.75% | 0.4% |
| Holdings | 40 | 37 | 66 | 40 | 59 |
| In the 10 largest | 57.47% | 40.57% | 55.24% | 57.62% | 60.23% |
| Biggest holding | Roper Technologies, Inc. (9.12%) | Waters Corp (4.87%) | American Water Works Co., Inc. (8.07%) | Roper Technologies, Inc. (9.41%) | Veolia Environnement SA (8.2%) |
| Yield | 0.5% | 0.73% | 1.57% | 0.89% | 3.54% |
| 1-year return | -1.6% | -3.2% | -1.3% | -3.9% | -4.8% |
| 3 years, a year | +13.9% | +13.4% | +14.8% | +12.8% | — |
| 5 years, a year | +5.6% | +5.2% | +3.5% | +2.1% | — |
| Worst drop, past year | -13.8% | -13.8% | -10.9% | -13.2% | -13.2% |
| Launched | 2005 | 2007 | 2007 | 2007 | 2017 |
The largest ordinary funds by net assets (leveraged and inverse funds are listed further down). Holdings from each fund’s latest N-PORT report; returns include reinvested distributions, as of Oct 27, 2026.
Head to head
PHO vs FIW
The two largest water ETFs track different indexes but share 32 stocks and about 73% of their assets. The bigger difference is weighting. PHO puts 57% in its top 10 holdings, led by Roper Technologies at 9.1%. FIW's top 10 make up 41%, and its largest position, Waters Corp., is 4.9%. FIW costs 0.50% a year; PHO costs 0.59%. In the year to June 26, 2025, PHO returned 1.8% and FIW 1.5%, with worst drops of 19.2% and 18.3%. FIW may suit investors who want a more even spread; PHO, those comfortable with bigger bets on its top names.
PHO vs CGW
PHO and CGW overlap the least of the five largest funds: 22 shared stocks, about 33% of assets. PHO tracks a US water index led by Roper Technologies (9.1%). CGW tracks the S&P Global Water Index across 66 stocks, led by American Water Works (8.1%). Fees are 0.59% and 0.58%. In the year to June 26, 2025, CGW returned 14.4% to PHO's 1.8%, with a smaller worst drop (14.2% vs. 19.2%). In the 2022 bear market, CGW fell more: 32.3% vs. 23.1%. CGW may suit investors wanting a broader global mix; PHO, those preferring a US-focused fund.
CGW vs PIO
Both are Invesco funds with global holdings, but they share 21 stocks and about 38% of assets. PIO tracks the Nasdaq OMX Global Water Index with 40 stocks; Roper Technologies leads at 9.4%. CGW spreads across 66 stocks, led by American Water Works at 8.1%. Their top 10s make up 55% (CGW) and 58% (PIO). PIO costs 0.75% a year, the most in the group, versus CGW's 0.58%. In the year to June 26, 2025, CGW returned 14.4% and PIO 1.2%, with worst drops of 14.2% and 17.1%. PIO may suit those wanting a tighter list; CGW, a wider one.
How much do the largest water ETFs overlap?
Owning two funds that hold the same stocks adds little diversification. Overlap here is the share of assets two funds have in common: for each stock both own, the smaller of its two weights, added up.
| Funds | Assets in common | Shared holdings | |
|---|---|---|---|
| PHO and FIW | 73.1% | 32 | |
| CGW and TBLU | 53.2% | 38 | |
| PHO and TBLU | 46% | 28 | |
| PHO and PIO | 45.6% | 13 | |
| PIO and TBLU | 45.5% | 21 | |
| FIW and TBLU | 42.4% | 24 | |
| CGW and PIO | 38.1% | 21 | |
| FIW and CGW | 37.1% | 17 | |
| FIW and PIO | 36.8% | 12 | |
| PHO and CGW | 32.8% | 22 |
From each fund’s full holdings in its latest N-PORT report.
How have water ETFs performed?
The five largest ordinary funds: growth from the start of the range, distributions reinvested. The dashed gray line is the S&P 500 (SPY).
Best-performing water ETFs over the past year
| # | Fund | Net assets | Cost | 1 mo | YTD | 1 yr | 3 yr |
|---|---|---|---|---|---|---|---|
| 1 | CGW Invesco S&P Global Water Index ETF | $1.05B | 0.58% | +1.4% | +1.1% | -1.3% | +14.8% |
| 2 | PHO Invesco Water Resources ETF | $2.00B | 0.59% | +5.4% | +3.2% | -1.6% | +13.9% |
| 3 | FIW First Trust Water ETF | $1.86B | 0.5% | +4.9% | +2.1% | -3.2% | +13.4% |
| 4 | PIO Invesco Global Water ETF | $273.4M | 0.75% | +1.4% | -0.1% | -3.9% | +12.8% |
| 5 | TBLU Tortoise Global Water ESG Fund | $52.9M | 0.4% | +1.6% | -0.5% | -4.8% | — |
Funds with at least $25 million in net assets; leveraged and inverse funds left out. Past returns don’t predict future returns.
How water ETFs did in past market crashes
| Fund | 2008 crash | 2020 crash | 2022 drop |
|---|---|---|---|
| PHO | -54.3% | -34.8% | -23.1% |
| FIW | -51.3% | -36.6% | -22.3% |
| CGW | -57.0% | -35.7% | -32.3% |
| PIO | -63.7% | -35.8% | -33.2% |
| TBLU | not yet launched | not yet launched | not yet launched |
| S&P 500 (SPY) | -55.2% | -33.7% | -24.5% |
Total return from the stock market’s peak to its low in each fall, distributions reinvested.
What drives water ETFs?
Most water ETFs mix two kinds of business. Water utilities are regulated: officials set the prices they can charge, so profits depend on rate decisions and on the cost of borrowing to replace pipes and plants. Because utilities borrow heavily and pay steady dividends, their shares often fall when interest rates rise, much as bonds do. Equipment makers, pipe suppliers and testing firms are more tied to spending cycles: home building, factory investment and city infrastructure budgets. Tighter water-quality rules can lift demand for treatment and testing. Funds with foreign holdings also feel currency swings.
Past downturns show water funds have not been a reliable shelter. In the 2008 financial crisis, FIW fell 51.3% and PHO 54.3%, slightly less than the S&P 500's 55.2%, while CGW lost 57.0% and PIO 63.7%. In the 2020 COVID crash, all five largest funds fell more than the index's 33.7%, from PHO's 34.8% to TBLU's 37.5%. In the 2022 bear market, a long slide in stock prices, PHO (23.1%) and FIW (22.3%) fell a little less than the S&P 500 (24.5%), but the global funds CGW, PIO and TBLU dropped between 32.3% and 34.5%.
Water ETFs with the lowest expense ratios
| # | Fund | Expense ratio | On $10,000 | Net assets |
|---|---|---|---|---|
| 1 | TBLU Tortoise Global Water ESG Fund | 0.4% | $40 a year | $52.9M |
| 2 | FIW First Trust Water ETF | 0.5% | $50 a year | $1.86B |
| 3 | AQWA Global X Clean Water ETF | 0.5% | $50 a year | $23.8M |
| 4 | CGW Invesco S&P Global Water Index ETF | 0.58% | $58 a year | $1.05B |
| 5 | PHO Invesco Water Resources ETF | 0.59% | $59 a year | $2.00B |
Ordinary funds with at least $10 million in net assets. The median ordinary water ETF charges 0.5% a year; leveraged and inverse funds usually charge more.
Do water ETFs pay dividends?
6 of the 7 ordinary water ETFs with a page here paid distributions over the last 12 months, with a median yield of 0.89%.
| Highest yields | Yield | Net assets |
|---|---|---|
| TBLU Tortoise Global Water ESG Fund | 3.54% | $52.9M |
| CGW Invesco S&P Global Water Index ETF | 1.57% | $1.05B |
| PIO Invesco Global Water ETF | 0.89% | $273.4M |
| FIW First Trust Water ETF | 0.73% | $1.86B |
| PHO Invesco Water Resources ETF | 0.5% | $2.00B |
Distributions over the last 12 months divided by the price; funds with at least $25 million in net assets.
How to choose a water ETF
- Yearly cost: 0.40% to 0.75%. TBLU charges 0.40% a year and IWTR 0.47%, though both are small. FIW and AQWA charge 0.50%, CGW 0.58% and PHO 0.59%. PIO is the priciest at 0.75%. Fees come out of returns every year.
- How top-heavy each fund is. FIW spreads its money most evenly: its top 10 holdings are 41% of the fund, and the biggest, Waters Corp., is 4.9%. TBLU's top 10 are 60%, and Roper Technologies alone is 9.1% of PHO and 9.4% of PIO.
- What counts as a water company. Indexes draw the line differently. CGW and AQWA put utilities like American Water Works near the top. PHO and PIO lead with Roper Technologies and Ecolab. IWTR also picks companies for efficient water management and holds Taiwan Semiconductor and Marriott.
- US-focused or global holdings. PHO tracks a US water index. CGW, PIO, TBLU, AQWA and IWTR own foreign companies such as SABESP, United Utilities, Veolia and Geberit, which adds currency swings. In 2022, CGW, PIO and TBLU fell 32.3% to 34.5%; PHO fell 23.1%.
- Fund size and ease of trading. PHO holds about $2.0 billion and FIW about $1.9 billion. AQWA has about $24 million and IWTR about $6.4 million. Smaller funds can trade less often, with wider gaps between quoted prices, and are more likely to close.
- Dividend yields are small. Five of the seven funds pay dividends, with a median yield (yearly payout as a share of price) of 0.81%. TBLU yields 1.22%, PIO 0.81%, FIW 0.70% and PHO 0.48%. Most of the return has come from share prices.
What are the risks of water ETFs?
- A handful of stocks carry the weight. The 10 largest holdings make up 57% of PHO, 58% of PIO and 60% of TBLU. Roper Technologies alone is about 9% of PHO and PIO, so one company's bad news can move these funds noticeably.
- The same stocks show up everywhere. Xylem is in all seven funds, American Water Works in six, and Ecolab and Ferguson Enterprises in five. PHO and FIW share about 73% of their assets, so holding both adds less variety than two fund names suggest.
- Sharp drops can happen within a year. Over the year to June 26, 2025, volatility, a measure of how widely returns swing, ran from 15.4% for CGW to 20.1% for IWTR. Worst peak-to-low drops ranged from 14.2% for CGW to 19.2% for PHO.
- Some funds stretch the water label. IWTR's index can include companies picked for efficient water management rather than water products, and its top holdings include Taiwan Semiconductor and Marriott. A fund's returns can then depend on businesses far from water.
- Small funds can close. AQWA holds about $24 million, TBLU about $53 million and IWTR about $6.4 million. Funds this small are more likely to shut down. Investors then get cash back, which can trigger capital gains tax outside retirement accounts.
List of all water ETFs, by size
| # | Fund | Net assets | Cost | Yield | YTD | 1 yr | 5 yr |
|---|---|---|---|---|---|---|---|
| 1 | PHO Invesco Water Resources ETF | $2.00B | 0.59% | 0.5% | +3.2% | -1.6% | +5.6% |
| 2 | FIW First Trust Water ETF | $1.86B | 0.5% | 0.73% | +2.1% | -3.2% | +5.2% |
| 3 | CGW Invesco S&P Global Water Index ETF | $1.05B | 0.58% | 1.57% | +1.1% | -1.3% | +3.5% |
| 4 | PIO Invesco Global Water ETF | $273.4M | 0.75% | 0.89% | -0.1% | -3.9% | +2.1% |
| 5 | TBLU Tortoise Global Water ESG Fund | $52.9M | 0.4% | 3.54% | -0.5% | -4.8% | — |
| 6 | AQWA Global X Clean Water ETF | $23.8M | 0.5% | 1.61% | -0.2% | -5.3% | — |
| 7 | IWTR iShares MSCI Water Management Multisector ETF | $6.4M | 0.47% | 0% | 0.0% | 0.0% | — |
Questions investors ask about water ETFs
What is the largest water ETF?
PHO, the Invesco Water Resources ETF, is the largest, with about $2.0 billion in net assets. It is also the oldest, launched in December 2005, and tracks the Nasdaq OMX US Water Index. The First Trust Water ETF (FIW) is close behind at about $1.9 billion, followed by the Invesco S&P Global Water Index ETF (CGW) at about $1.0 billion. Together, the five largest funds hold 99.4% of the assets in the seven water ETFs covered here.
What is the cheapest water ETF?
The Tortoise Global Water ESG Fund (TBLU) has the lowest expense ratio, 0.40% a year, but it is small, with about $53 million in assets. The iShares MSCI Water Management Multisector ETF (IWTR) charges 0.47% and holds only about $6.4 million. FIW, one of the two largest funds, charges 0.50%, the same as AQWA. CGW charges 0.58%, PHO 0.59% and PIO 0.75%, the most in the group.
PHO vs FIW: what's the difference?
They differ mainly in cost and concentration, not holdings. The two share 32 stocks and about 73% of their assets. FIW charges 0.50% a year versus 0.59% for PHO. FIW also spreads its money more evenly: its top 10 holdings make up 41% of the fund, against 57% for PHO, where Roper Technologies alone is 9.1%. Over the year to June 26, 2025, returns were close: 1.5% for FIW and 1.8% for PHO.
Do water ETFs pay dividends?
Yes, but the payouts are small. Five of the seven funds pay dividends, and their median yield (yearly dividends as a share of the share price) is 0.81%. TBLU yields the most at 1.22%, followed by PIO at 0.81%, FIW at 0.70% and PHO at 0.48%. At these levels, dividends would cover only a small part of a retiree's spending, and most of the return from these funds has come from share prices.
Do water ETFs own Xylem?
Yes. Xylem is the one stock held by all seven water ETFs in this guide, with a median weight of about 6% of each fund. It ranks among the top five holdings of CGW (7.8%), AQWA (7.6%) and IWTR (6.0%). American Water Works is nearly as common, held by six of the seven funds, and Ecolab and Ferguson Enterprises each appear in five.
How many water ETFs are there?
This guide covers seven water ETFs with about $5.3 billion in combined net assets: PHO, FIW, CGW, PIO, TBLU, AQWA and IWTR. Three come from Invesco (PHO, CGW and PIO), and one each from First Trust, Tortoise, Global X and iShares. All are index funds, and none is leveraged or inverse. The oldest, PHO, launched in 2005; the newest, IWTR, launched in 2022.
Do water ETFs hold up in a stock market crash?
Not reliably. In the 2020 COVID crash, all five of the largest water ETFs fell more than the S&P 500's 33.7%, with declines from 34.8% for PHO to 37.5% for TBLU. In the 2022 bear market, PHO and FIW fell a little less than the S&P 500's 24.5%, but CGW, PIO and TBLU fell between 32.3% and 34.5%. In the 2008 financial crisis, PIO lost 63.7%, against 55.2% for the S&P 500.
Are water ETFs global or US-only?
It depends on the fund. PHO, the largest, tracks the Nasdaq OMX US Water Index. Five of the seven funds, CGW, PIO, TBLU, AQWA and IWTR, also own companies outside the US, such as SABESP, Veolia and United Utilities. Global funds add currency risk, since foreign shares are priced in other currencies. Results have differed: in the year to June 26, 2025, CGW returned 14.4% and PHO 1.8%, but in the 2022 bear market CGW fell 32.3% and PHO 23.1%.
Is there a Vanguard, Fidelity or Schwab water ETF?
No. None of the three offers a water ETF. The largest water ETFs come from Invesco (PHO), First Trust (FIW) and Invesco (CGW), and customers of all three firms can buy other companies’ ETFs in their brokerage accounts.
