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Insight taps into water stocks

Insight’s multi-manager team have invested in iShares S&P global water, the first exchange-traded fund in Europe that tracks the performance of water stocks.

The company has built small positions in the ETF within its diversified target return and wealthbuilder growth funds.

It says spending on water infrastructure has been neglected in recent years but concerns about climate change mean that water stocks will benefit from renewed spending to improve water systems and reduce wastage.

Insight also stresses that water is used in agriculture and this is a contributory factor to the need to improve water systems. With growing demand for agricultural commodities, such as wheat that is used to produce ethanol, demand for water is also likely to increase. This is likely to produce a bottleneck in supply, which means supply will need to be increased.

Co-head of multi-manager Patrick Armstrong says the ETF provides cost-effective broad exposure to global water companies including water utilities and equipment stocks.

Insight has also moved further towards absolute return funds by adding the JPMorgan highbridge statistical market neutral fund to the diversified target return fund.

Armstrong says: “We noticed the demand for water while looking at the agricultural theme and we expect water stocks to benefit from spending on infrastructure.

“We think the returns from fixed interest are not high enough to compensate investors for the risk so we have also extended our move into absolute return funds.”

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