CGW: Global Mix Of Water Utilities And Industrials Lacks A Coherent Investment Case

Ben Holden-Crowther414 FollowersFollow5ShareSavePlay(10min)CommentsSummaryCGW has performed poorly since inception, versus U.S.-focused water funds and the broader market.The fund's 43% allocation to slow-growth, state-dependent utilities is a major concern, counterbalancing the fund's exposure to more innovative water-focused industrials.International exposure, especially to Brazilian and UK utilities, introduces regulatory and political risks that may hinder long-term compounding.With a 0.59% expense ratio and a 1.54% yield, CGW offers little advantage over direct ownership of a selection of high-quality water infrastructure stocks. JasonDoiy/iStock Unreleased via Getty Images Investment Thesis Over the last year or two, I've written articles about three out of four of the leading ETFs within the niche "water fund" category (PHO, FIW and PIO), and Invesco S&P Global Water (This article was written byBen Holden-Crowther414 FollowersFollowI am an international analyst with a Buffett and Munger inspired approach to investing. My emphasis is on identifying high quality, shareholder-oriented companies which have been unfairly discounted by the market due to short term factors or irrational investor psychology. At the moment, I am particularly interested in legacy businesses considered to be in secular decline in sectors such as remittances, ATMs and tobacco, where cash generative, high yield stocks (often with under-appreciated revenue and earnings growth) are very often unfairly ignored. While emphasizing U.S. stocks, I also cover attractive opportunities within my own country (the UK) and globally.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.