A look at the top water stocks and ETFs to watch

Water is fundamental to life; that is well understood. However, it is also crucial for industry, economic growth, and sustainability. Investment in water could be a wise investment, given that water is a finite resource and sustained population growth ensures increasing demand.

There are two main ways to invest in the water sector: individual water stocks and water-focused ETFs. Here we explore how they work and the top options in both so that you can decide whether water investments can help you meet your financial goals. Learn more about how to buy water stocks and ETFs, too.

Why invest in water?

Only a small percentage of the planet’s water is usable, and drinkable water is even scarcer. Although we have vast oceans, it is generally only fresh water that is useful to humans.

Rapid industrialization across the world has increased the demand for our fresh water supplies. The need for water for agricultural purposes is also growing, as we strive to feed a burgeoning population. Pollution puts further strain on the supply of fresh water.

The importance of water and the increasing scarcity of it together present a compelling case for why investors might consider adding water-related assets to their portfolios. Water-related industries are typically a stable investment, making stocks or ETFs a useful addition to a diverse portfolio of investments. Finally, investing in water offers the opportunity to invest in sustainable development, helping to drive progress.

How to invest in water: individual stocks

There are a large range of water-related industries. To name a few:

• Water treatment and desalination
• Utilities and domestic supply
• Wastewater management
• Bottled water
• Water technology and equipment manufacturers, such as those producing pumps or pipes.

There are also many industries reliant on large quantities of water:

• Textiles
• Food and beverage
• Manufacturing
• Paper
• Nuclear energy, and many more.
  

About investing in utilities and water-related companies

While water is essential everywhere, countries manage their water supplies differently. In some parts of the world, utilities are publicly owned. Strict regulations aim to ensure fair pricing and universal access to water. In other countries, utilities have transitioned into private ownership and a different regulatory environment, providing an alternative investment profile for investors.

Buying shares in utilities and other water-related companies offers direct exposure to the sector. The value of your investment will fluctuate based on company performance, market conditions, and regulatory developments. This performance is influenced by market conditions and any relevant regulatory frameworks.

While water stocks can be a lucrative investment choice and are generally considered to be part of a stable sector, they also come with higher risk than some other investment types. You need to research potential investments carefully. To help you choose water-related stocks, you can use one of the water investment indices.

Water investment indices

Financial indices are a group of assets tracked by an organization in order to provide a benchmark performance figure. Indices can be broad—such as the S&P 500, which tracks 500 of the largest U.S. companies—or industry-specific, focusing on particular sectors.

There are various indices that enable you to track the performance of water-related companies. Popular choices include:

• The Dow Jones U.S. Water Index
• The ISE Clean Edge Water Index
• The S&P 1500 Water Utilities Index
• The S&P Global Water Index.
  

Top water stocks to watch right now

Here is a top-five list of water stocks for 2025, sourced from around the globe.

• American Water Works is a regulated monopoly and the US’s largest water utility stocks. Investments in infrastructure and acquisitions have contributed to a solid financial performance over a long history.
• Severn Trent Water serves 8 million UK customers and is committed to keeping water bills low, making it a competitive business in the UK's unregulated sector.
• KSB AG is a German equipment manufacturer that serves the water industry. The company has an increasingly global reach.
• Kurita Water Industries is a chemical manufacturer specializing in water treatment as well as an operator of water treatment plants. It typically has access to higher profit margins than other water-related industries.
• China Water Affairs Group is a rapidly growing business that facilitates water supply and wastewater removal to 60 Chinese cities at present.
  

How to invest in water: water ETFs

Water ETFs (exchange-traded funds) are an opportunity for investors to access water-related industries without needing to pick out and assess individual companies. Water ETFs pool investors’ funds to buy a basket of shares from companies across water-related industries like utilities and equipment. They offer a convenient way to gain exposure to this sector.

Many water ETFs simply track one of the water investment indexes, and these are known as passive ETFs. Active ETFs are managed by fund managers, who pick a portfolio of investments on behalf of investors.

Why invest in water ETFs?

A key benefit of investing in water ETFs is that you get broad exposure to the entire water industry. Since it offers a more stable solution than investing in a single company, this could be ideal for diversifying your portfolio, depending on your current asset allocation and risk tolerance.

Water ETFs also share the core benefits of investing in water-related industries with any investment type: stable returns, sustainability, and a positive industry outlook.

Top water ETFs to watch right now

Here is a water ETFs list to watch in 2025.

• Invesco S&P Global Water Index (CGW) tracks the S&P Global Water Index, offering investment across 50 of the largest global names in water-related industries.
• Invesco Water Resources ETF tracks the Nasdaq OMX US Water Index and has a focus on sustainability and asset management.
• First Trust Water ETF offers exposure to 36 companies, generally within the potable and wastewater businesses.
  

How to buy water stocks and ETFs

To invest in water-related industries, you can buy shares and ETFs from brokers. You’ll need to open a brokerage account and complete due diligence in researching the top water ETFs and stocks.

Equiti is an online brokerage in the UAE that offers access to global markets on a secure trading platform. With high-tech research tools, expansive trading education resources, and multilingual support, a world of financial opportunities is at your fingertips.

Explore our website to learn more about our investment products and trading platforms.