Should You Invest in the First Trust Water ETF (FIW)?
Looking for broad exposure to the Industrials - Water segment of the equity market? You should consider the First Trust Water ETF (FIW), a passively managed exchange traded fund launched on 05/08/2007.
FIW: Water Remains Expensive
FIW holds 36 companies involved in the potable and wastewater industry. It's well established with $1.84 billion in AUM, but its 0.53% expense ratio is on the high end. Valuation is also concerning. FIW trades at 24.28 forward earnings and only offers 10.01% estimated earnings growth, both of which are worse than XLI, the broad-based Industrials sector ETF. I also found FIW's earnings momentum underwhelming. On average, its components delivered only a 3.47% earnings surprise last quarter.
Should You Invest in the First Trust Water ETF (FIW)?
Launched on 05/08/2007, the First Trust Water ETF (FIW) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Water segment of the equity market.
FIW: Popular Investment Theme Trading At Elevated Valuations
First Trust Water ETF provides exposure to companies in the freshwater treatment and distribution industry. The FIW ETF has a 5-year compounded annual return of 15.0%, outperforming the S&P 500 Index. However, its portfolio is currently trading at 29.3x P/E. While I like the water treatment and distribution investment theme, I am hesitant to invest at current valuations.
Should You Invest in the First Trust Water ETF (FIW)?
The First Trust Water ETF (FIW) was launched on 05/08/2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Industrials - Water segment of the equity market.
FIW: Still Expensive, But This Water ETF Is Flowing In The Right Direction
The First Trust Water ETF holds 36 companies that derive a substantial portion of their revenues from the potable water and wastewater industry. Over the last two years, I have relied on fundamental analysis to justify not buying FIW. In previous reviews, I've noted issues with FIW's valuation, quality, and earnings momentum. FIW has shown improvement on these factors over the last year, and despite it offering solid growth potential, it trades at 23.25x earnings, a rich multiple for the Industrial sector.
