We are in the midst of a global water crisis, owing to climate change, irresponsible extraction, pollution, and lack of equitable access…[1]
Less than 1% of the earth’s water is potable and global demand is rapidly rising. In fact, the World Resources Institute has projected a 56% deficit in water supply by 2030, putting millions at risk. Water.org estimates that 785 million people lack access to safe water and six times the population of the United States lives without a household water connection!
Water is facing unprecedented demand across agriculture, industry, and domestic uses: by 2050 food-related demand is expected to increase by 60%, demand from manufacturing is expected to increase by 400%, and domestic demand is expected to increase by 300% in Africa and Asia, and by 200% in Central and South America by 2050. [2].
Changing global demographics including population growth, urbanization, and rising living standards are all conspiring to exponentially grow demand for water at a time when water resource issues are on the rise.
As a result, companies addressing supply, efficiency, and quality may be timely investment opportunities with the potential to generate financial, environmental, and social alpha. This is exactly what the Virtus AllianzGI Water Fund does as one of our model managers. For example, the fund invests in Lindsay Corp. and Valmont Industries, companies that offer center pivot irrigation technology, an irrigation solution that results in a 95% improvement in water efficiency. Not only do these companies provide a meaningful solution to water scarcity, but they are also two of only three companies in the world that offer this solution.
This is especially essential during periods of prolonged drought, such as the current megadrought in California. Given that California is responsible for two-thirds of fruit and nut supply and one-third of the vegetable supply in the nation, water efficiency technologies are essential.
KEY FUND FEATURES
- Precision exposure to sustainable water
Targets and invests only in pure-play companies, committed to solving water scarcity, increasing water quality, and enhancing water efficiency. - A resilient portfolio in ever-changing market conditions
The Fund focuses on high-quality water stocks backed by strong structural drivers, seeking to deliver stability in difficult market environments while generating attractive long-term growth. - Time-tested experience in water investing
The investment team has over a decade of experience in water investing and engages in a recurring dialogue with global water leaders.
The Virtus AllianzGI Water Fund is included in the SMART Fossil Fuel Free / ESG Mutual Fund Models. To learn more about our SMART Investing Solutions and the managers we work with, schedule a strategy session with Penelope Jackson.
_________________________________________________
1) https://www.virtus.com/assets/files/3wm/virtus_allianzgi_water_fund_presentation_3480_1q21.pdf