The theme for World Water Day in 2025 (on March 22) is “Glacier Preservation”

The theme for World Water Day in 2025 (on March 22) is “Glacier Preservation”, focusing on the critical role glaciers play in global water systems

The theme for World Water Day in 2025 (on March 22) is “Glacier Preservation,” focusing on the critical role glaciers play in global water systems and the urgent need to address their rapid decline due to climate change.

Glaciers are critical to life—their meltwater is essential for drinking water, agriculture, industry, clean energy production, and healthy ecosystems. But rapidly melting glaciers are causing uncertainty to water flows, with profound impacts on people and the planet. For example, flooding and rising sea levels can contaminate land and water resources and cause damage to water and sanitation infrastructure. According to the 2023 State of Global Water Resources Report by the World Meteorological Organization, glaciers lost 600 gigatons of water in 2023, the largest measurement in 50 years.

Against this backdrop, the supply/demand dynamics of water create opportunities for thematic investments in utilities, infrastructure, and technology that increase the supply and reliability of safe freshwater. These investment opportunities can come in the form of open-end and exchange-traded funds focused on companies involved in water-related activities and a range of publicly traded water-related stocks.

How to Invest in Water in the US and Europe

As of February 2025, we identified 73 open-end funds and ETFs focused on the water theme, including 13 in the US and 60 in Europe, representing a total of $41 billion in assets under management. This universe has grown by almost 70% in the past five years.

Assets peaked at $50 billion in 2021 before declining to today’s level due to outflows and mixed performance.

Exhibit 1 Annual Assets in U.S. and European Water Funds

US water funds have registered net withdrawals in each of the past three years, totaling $820 million. Meanwhile, European water funds have bled an aggregated $5.6 billion over the past two years, contrasting with the subscriptions of nearly $7 billion in 2021.

Exhibit 2 Annual Flows of U.S. and European Water Funds

The recent outflows on both sides of the Atlantic can be partly explained by the underperformance of the strategies against a backdrop of subdued industrial activity and high interest rates. After outperforming the Morningstar Global Markets Small-Mid Cap Index by 4 and 12 percentage points in 2021 and 2022, respectively, US water funds paced the index in 2023 and lagged by 3.5% in 2024. European water funds trailed the benchmark by an annual average of 5.4% over the past two years.

Though municipal and broader water and wastewater infrastructure spending remained healthy last year in the US and Europe, broader industrial activity was subdued, resulting in slower-than-anticipated capital and operating expenditures in the water sector. Meanwhile, higher interest rates continued to hold back residential and nonresidential construction activities, affecting water spending in multiple markets around the world. Moreover, low agricultural commodity prices pressured profitability in key growing regions such as the US and Brazil, limiting investment in irrigation equipment and technology.

Exhibit 3 Annual Performance of U.S. and European Water Funds

US Water Investment Funds Focus on Mid-Cap Growth Companies

The exhibit below lists the 13 water funds available to US investors. Investors interested in water funds can choose US-focused or global portfolios. Nine are passively managed ETFs, concentrated (with an average number of 43 holdings), and focused on midsize growth companies. Fees average 0.7% on an asset-weighted basis, roughly in line with the average (0.6%) thematic peers in the US.

For investors seeking impact, one benchmark is U.N. Sustainable Development Goal 6 (Clean Water and Sanitization). Based on revenues of investee companies, US water funds are all over the map, with revenues contributing to the theme ranging from 7% to 65%, averaging 38%.

At 65%, Global X Clean Water ETF AQWA boasts the highest percentage of revenue contribution to the theme. The fund invests in companies advancing the provision of clean water through industrial water treatment, storage and distribution infrastructure, and purification and efficiency strategies. In comparison, NYLI Clean Oceans ETF OCEN focuses on companies that help to achieve a cleaner ocean through reduced pollution and increased resource efficiency. The low revenue percentage (7%) associated with SDG 6 can be partly explained by the multiple SDGs the strategy targets, including Life Below Water (SDG 14) and Responsible Consumption and Production (SDG 12).

US funds appear to be biased toward US companies, with revenue exposure to the US averaging above 50% compared with 12% to Europe.

Exhibit 4 U.S. domiciled Water Funds

Invesco offers three US-dom