Designed to provide broad exposure to the Industrials ETFs category of the market, the Invesco Global Water ETF (PIO) is a smart beta exchange traded fund launched on 06/13/2007.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by Invesco, PIO has amassed assets over $263.95 million, making it one of the average sized ETFs in the Industrials ETFs. Before fees and expenses, PIO seeks to match the performance of the NASDAQ OMX Global Water Index.
The NASDAQ OMX Global Water Index is designed to track the performance of companies worldwide that are creating products that conserve and purify water for homes, businesses and industries.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.75% for this ETF, which makes it one of the more expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.93%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Roper Technologies Inc (ROP) accounts for about 9.31% of total assets, followed by Ecolab Inc (ECL) and Pentair Plc (PNR).
PIO's top 10 holdings account for about 57.49% of its total assets under management.
Performance and Risk
The ETF has lost about -1.23% and is down about -3.42% so far this year and in the past one year (as of 09/14/2026), respectively. PIO has traded between $42.19 and $48.63 during this last 52-week period.
The ETF has a beta of 0.99 and standard deviation of 15.67% for the trailing three-year period, making it a medium risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk .
Alternatives
Invesco Global Water ETF is not a suitable option for investors seeking to outperform the Industrials ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
First Trust Water ETF (FIW) tracks ISE Clean Edge Water Index and the Invesco Water Resources ETF (PHO) tracks NASDAQ OMX US Water Index. First Trust Water ETF has $1.75 billion in assets, Invesco Water Resources ETF has $1.93 billion. FIW has an expense ratio of 0.50% and PHO changes 0.59%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Invesco Global Water ETF (PIO): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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