Mastering the Commodities Markets

PRICING AND PRICE DISCOVERY

Although we understand instinctively that water is a valuable commodity there is no universal pricing for this, yet! Consequently it is problematical to invest in the raw material, which only leaves us with the possibility of investing via equity, bonds or ETFs with the organisations that are involved in the supply chain for clean potable water. There are no futures or options markets yet, and many of the world’s major water providers are governmental, though there are occasional commercial operators.

Four major water exchange traded funds (ETFs) have been launched since 2005, with combined assets of over US$1.3 billion, according to Morningstar Inc., an independent data provider (www.morningstar.com).The key water ...