Population growth, increasing per capita water consumption and pollution are major drivers of water scarcity, which is exacerbated by aging and inefficient water infrastructures. Increased urbanization, population migration to water-scarce areas and improved living standards in developing countries are leading to massive increases in water consumption.
Yet the global water supply is limited by the natural water cycle, while climate change induces more frequent and longer periods of drought. This means that access to clean and safe drinking water in sufficient quantities as well as waste water treatment will remain an increasingly important economic factor for years to come, particularly in the emerging markets.
Our theme update slides explore sustainability issues of current relevance, providing a snapshot of innovative product segments, new applications or emerging trends including an example of a company active in the respective area.
Cumulative excess return of Water strategy vs MSCI World since inception: +153%
(Portfolio performance gross of fee as of December 31, 2016)
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Companies offering products and services that address global challenges related to the scarcity, quality, and allocation of water are well-positioned to profit in the long run. The RobecoSAM Sustainable Water Strategy invests globally in companies belonging to one of the following investment clusters:
Capital goods & chemicals: Companies in this cluster manufacture water valves and pumps, integrated water treatment systems, water treatment chemicals or irrigation systems. Most fall in the machinery segment, and while they supply to utilities, their market dynamics are of a more cyclical nature.
Quality & analysis: Companies in this cluster develop and sell products and services linked to water quality such as sensors to measure pollutants in water, systems to treat water at its point of use and services protecting surface water and groundwater quality. As those products are linked to consumer goods or industrial consumables, companies in this cluster often display lower volatility.
Construction & materials: Companies in this cluster build infrastructure such as water pipelines, water channels, reservoirs and treatment plants and or install water meters. The market dynamics of these firms are often linked to commercial and municipal construction and infrastructure, making this cluster more cyclical.
Utilities: Companies in this cluster supply water and provide wastewater services to residential, commercial and industrial customers. Given their steady stream of revenues and important capital expenditure requirements, utilities often display moderate growth, high dividend yields and lower price volatility.
Dieter Küffer, CFA
Holger Frey, CAIA
Mathias Büeler, CFA
Materials, Construction, Machinery & Transportation
|Thomas Guennegues, CFA
Utilities, Renewable Energies, Electrical Equipment
Junwei Hafner-Cai, CIIA
|Matthias Müller, CFA
Information Technology & Telecommunication
Aaron Re'em, CFA
Sustainability Investing (SI) Analysts
|Jacob Messina, CFA|
Head of SI Research
Healthcare, Consumer Products & Services
Senior SI Analyst
Financials, Energy & Mining
|Roland Hengerer, PhD|
Senior SI Analyst
Utilities, Renewable Energies & Electrical Equipment
Senior SI Analyst
Materials & Transportation, Impact Investing
Melissa Castillo Spinoso
Michael van der Meer, CFA