Top Water, Environmental, and Renewable Energy Investments. Include First Trust Water ETF, Global Water Fund A Shares, Invesco Water Resources ETF, Invesco S&P Global Water Index ETF, Fidelity Water Sustainability Fund, Hewlett Packard Enterprise, Dexus Property Group, Unilever, Diageo, Stockland, Abbott Laboratories, Stanley Black & Decker, US VEGAN ETF, American Water Works, Pool Corp., Generac
Transcript & Links, Episode 67, September 24, 2021
Hello, Ron Robins here. Welcome to podcast episode 67 published on September 24, titled “Top Water, Environmental, and Renewable Energy Investments” — and presented by Investing for the Soul. investingforthesoul.com is your site for vital global ethical and sustainable investing news, commentary, information, and resources.
Remember that you can find a full transcript, links to content – including stock symbols, quotes, and bonus material – at this episode’s podcast page located at investingforthesoul.com/podcasts.
Now, just a reminder. I do not evaluate any of the stocks or funds mentioned in this podcast. Furthermore, if you’re concerned about the ESG and sustainability ratings of any stock or fund included in this podcast, check your broker’s online site for such information.
If your broker doesn’t have this information, signup for free with Morningstar and you can gain access to company and fund ESG-sustainability ratings. Please note, I receive no compensation from Morningstar or anyone else covered in these podcasts.
Also, if any terms are unfamiliar to you, simply Google them.
1. Top Water, Environmental, and Renewable Energy Investments
With fires, drought conditions increasing around the globe, water investing is gaining prominence. This recent article titled Water Investing: 5 Funds You Should Tap by Coryanne Hicks at Kiplinger offers insight into some leading water ETFs. Here are some quotes from her.
“’Billions of people around the world will be unable to access safely managed household drinking water, sanitation and hygiene services in 2030 unless the rate of progress quadruples, according to the World Health Organization and UNICEF”
1) Courtesy of First Trust: First Trust Water ETF (FIW)
- Assets under management: $1.3 billion
- Dividend yield: 0.4%
- Expenses: 0.54%, or $54 annually for every $10,000 invested
The First Trust Water ETF tracks the ISE Clean Edge Water Index, which holds companies in the potable water and wastewater industry with worldwide market capitalizations of at least $100 million…
MSCI’s ESG Fund Ratings rates First Trust Water ETF at AA – the second-best rating, and within the system’s so-called Leader tier.
2) Courtesy of Calvert Funds: Calvert Global Water Fund A Shares (CFWAX)
- Assets under management: $590.7 million
- Dividend yield: 0.6%
- Expenses: 1.24%
The Calvert Global Water Fund A Shares is a water investing mutual fund that seeks to track the Calvert Global Water Research Index, CALH2O, a proprietary index comprised of ‘companies that manage water use in a sustainable manner and are actively engaged in expanding access to water, improving water quality, promoting the efficient use of water, or providing solutions that address other global water challenges…’
Note that (this fund) also receives MSCI’s AA rating. In addition to a 1.24% expense ratio, investors also pay a 4.75% front-end sales load unless their brokerage waives or lessens the load. (Fidelity and Schwab are examples of brokerages that will waive the load on [this fund].)Learn more about CFWAX at the Calvert provider site.
3) Courtesy of Invesco: Invesco Water Resources ETF (PHO)
- Assets under management: $2.1 billion
- Dividend yield: 0.3%
- Expenses: 0.60%
Invesco’s flagship water-themed fund, Invesco Water Resources ETF, was launched in 2005.
(This fund) tracks the Nasdaq OMX US Water Index, which invests in companies that purify and conserve water for home, business and industrial users… ‘The Nasdaq OMX US Water Index was the best performing Nasdaq index in July 2021, up 6.0%,’ (says) Rene Reyna, head of thematic and specialty product strategy at Invesco…
Invesco also offers a global version of this fund, the Invesco Global Water ETF (PIO). The Invesco Water Resources ETF earns five stars and a bronze badge from Morningstar… It also earns MSCI’s highest ESG rating: AAA.
Again, 4) Courtesy of Invesco: Invesco S&P Global Water Index ETF (CGW)
- Assets under management: $1.2 billion
- Dividend yield: 1.1%
- Expenses: 0.57%
The Invesco S&P Global Water Index ETF could be considered a more traditional way of investing in water (than the previous Invesco water funds…)
This ETF tracks the S&P Global Water Index, which focuses on the 50 largest companies in water-related businesses across the globe. (This fund) targets two distinct segments – water equipment and materials, and water utilities and infrastructure – allocating 25 stocks to each…
(The fund) also earns five stars and a silver badge from Morningstar, as well as an AAA ESG rating from MSCI.
5) Courtesy of Fidelity: Fidelity Water Sustainability Fund (FLOWX)
- Assets under management: $99.4 million
- Dividend yield: 0.1%
- Expenses: 1.00%
Launched in April 2020, the Fidelity Water Sustainability Fund invests at least 80% of its assets in water sustainability companies, such as those involved in water resources, treatment or distribution. These can include the companies found in the S&P Global Water Index, but the managers also reserve the right to choose other companies they feel meet the fund’s criteria…
Of the five water investing options in this article, the Fidelity Water Sustainability Fund deserves the most scrutiny before jumping in given its short track record.
MSCI’s ESG Fund Ratings rates the product at AA.” End quotes.
2. Top Water, Environmental, and Renewable Energy Investments
Looking for companies with strong SRI characteristics and good dividends. This article can help you. It’s titled SRI: which companies have both a positive sustainable impact and a strong dividend? It’s by George Sweeney (DipFA). Note, the writer mentions ESG scores but doesn’t indicate where they are from or their methodology. Here are some quotes from the article. This article was on fool.com. Quotes.
Here are some of the top businesses ticking both those boxes.
1) Coca-Cola HBC AG (CCH)
Although Coke is questionable from a health perspective, the company has a massive environmental, social and governance (ESG) score of 92. It also pays a respectable 2.19% dividend yield…
2) Hewlett Packard Enterprise (HPE)
It has an ESG score of 91 and pays a tidy dividend yield of 2.92%…
3) Dexus Property Group (DXS)
This is a less well-known brand because it’s based in Australia, so you’ll find it on the ASX 200. But the company is making waves down under with an ESG score of 89 and a super dividend yield of 5.18%…
The company focuses on property and real estate. In 2020, it managed to successfully reduce its office emissions by 50.1%…
*Some other notable stocks that didn’t take the top spots but still had strong ESG scores and dividend yields are:
- Unilever (ULVR) (ESG 89, 3.51%)
- Diageo (DGE) (ESG 87, 2.12%)
- Stockland (SGP) (ESG 86, 4.73%)
- Abbott Laboratories (ABT) (ESG 86, 1.46%)
- Stanley Black & Decker (SWK) (ESG 86, 1.34%)”
Now back to great ESG funds with this article titled 4 ESG Funds Investments to Beat Rising Environmental Issues. By Zacks Equity Research. Here are some quotes on each fund.
“1) New Alternatives Fund Class A (NALFX – Free Report)
Aims for long-term capital growth with income as its secondary objective. It primarily invests in common stocks of companies and even in other equity securities, such as real-estate investment trusts and American Depository Receipts.
(This fund) has… three and five-year returns of 29.1% and 18.9%, respectively…
The New Alternatives Fund Class A has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.96% compared to the category average of 1.26%.
2) Parnassus Mid Cap Growth Fund – Investor (PARNX – Free Report)
Aims for capital appreciation. The fund invests majority of assets in mid-sized growth companies.
(This fund) has returned 18.7% and 16.4% for the three and five-year periods, respectively…
(The) Parnassus Mid Cap Growth Fund – Investor carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.83%, which is below the category average of 1.09%.
3) Janus Henderson Global Technology and Innovation Fund Class A (JATAX – Free Report)
Aims for long-term growth of capital. The fund invests majority of net assets in securities of companies benefiting from advances or improvements in technology.
The fund’s returns are 30.2% and 30.5% over the past three and five-year period, respectively…
(This fund) carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.99% versus the category average of 1.05%.
4) Calvert Equity Fund Class A (CSIEX – Free Report)
Aims for growth of capital through investment in stocks believed to offer opportunities for potential capital appreciation. The fund invests majority of assets in common stocks of companies that rank among the top 1,000 U.S.-listed companies.
(The fund) has… three and five-year returns of 24.3% and 21.2%, respectively…
(It) has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.94% compared to the category average of 0.99%.” End quotes.
4. Top Water, Environmental, and Renewable Energy Investments
Now about two years ago I covered the launch of the US VEGAN ETF. Well, several articles have appeared on the success of this ETF. Quoting this article VEGAN ETF celebrates two years of outperformance by Beverley Chandler at ETFExpress.com, says “The world’s first and only vegan ETF, the US Vegan Climate ETF (ticker: VEGN) has reached its two year anniversary since launch, with almost USD65million in assets since inception, and having returned 67.91 per cent vs S&P 500 Index’s 57.07 per cent (on market price) since inception to end of August 2021.” End quote.
5. Top Water, Environmental, and Renewable Energy Investments
“3 of the best climate change stocks: Overview
|Company||Market Cap||Dividend Yield||Wall Street’s Projected Annualized EPS Growth Over Next 5 Years||1-Year Stock Return||10-Year Stock Return|
|American Water Works||$32.3 billion||1.4%||8.6%||28.1%||645%|
|Pool Corp.||$18.6 billion||0.7%||17%||53.5%||1,800%|
|Generac Holdings||$27.5 billion||N/A||8%||137%||3,450%|
DATA SOURCES: YAHOO! FINANCE AND YCHARTS. DATA AS OF SEPT. 17, 2021. EPS = EARNINGS PER SHARE.
1) American Water Works (NYSE: AWK)
American Water Works remains the best choice in the water utility space for most investors, in my opinion. It’s the largest and most geographically diverse publicly traded water and wastewater utility in the United States. That makes it best positioned to capitalize on the consolidation trend in the industry.
2) Pool Corp. (NASDAQ: POOL)
As the world’s largest wholesaler of swimming pool supplies, Pool Corp. is best positioned to profit from rising demand for pools. The company has also shrewdly expanded into related outdoor living products, such as landscaping and irrigation products.
Wall Street has been doing a poor job projecting Pool Corp.’s earnings growth… In the past four quarters, not only has Pool Corp. beat the consensus earnings estimate in every quarter, but it has crushed it by an average of 63%.
3) Generac (NYSE: GNRC)
In the second quarter, Generac’s shipments of home standby generators nearly doubled from the year-ago period, and the company is ideally positioned to continue to benefit from strong demand for backup generators because it’s the largest player in this market. It’s also a major player in the commercial and industrial standby generator space. Moreover, in recent years, the company has expanded into the clean energy market. It makes battery storage systems, which can be can store energy from solar panels or the electric grid, and related products.
Wall Street analysts have been continuously underestimating Generac’s earnings growth potential.” End quotes.
Honorable Mentions — go to this podcast’s webpage for links.
1) Title 5 Wind Energy Stocks to Get Ahead of the Renewable Energy Movement by Pete Johnson on investmentu.
2) Title 7 Best Energy Stocks to Buy to Cash in on the Alternative Energy Boom by Tezcan Gecgil on Investorplace.
3) Title These 3 Renewable Energy Stocks Should Benefit From a New Infrastructure Bill by Travis Hoium, Howard Smith, And Daniel Foelber. From The Motley Fool.
4) Title 11 Best Alternative Energy Stocks to Buy Right Now by Ramish Cheema on Yahoo! Finance.
VanEck HIP Sustainable Muni ETF
Now a welcome development in the US green bond market. From a press release, quote “VanEck today announced the launch of the VanEck HIP Sustainable Muni ETF (CBOE: SMI), the first ETF designed to offer exposure to investment-grade municipal debt securities that focus on sustainability as well as positive social, environmental and economic outcomes or mission accomplishment.” End quote.
Well, these are my top news stories with their stock and fund tips — for this podcast: “Top Water, Environmental, and Renewable Energy Investments.“
To get all the links, stock symbols, or to read the transcript of this podcast — and more — go to investingforthesoul.com/podcasts and scroll down to this episode.
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Talk to you next on October 8. Bye for now.
© 2021 Ron Robins, Investing for the Soul.