First Trust Water ETF: A Decade of Dominance in Water Investing

First Trust Water (NYSEARCA:FIW) has been the best performing water-themed ETF over the past decade, offering competitive long-term performance even when compared with the S&P 500. Its investment thesis is based on the growing demand for water resources and the potential for water-related businesses to outperform the broader market. The ETF has a diversified portfolio of 83 stocks, with a focus on water utilities, treatment, and infrastructure. While the water ETF space has experienced significant outperformance in recent years, FIW's long-term track record suggests it remains a solid choice for investors seeking exposure to this growing market.

First Trust Water ETF (FIW) has emerged as a leading performer in the water-themed ETF space over the past decade, offering competitive long-term returns that rival the broader market indices. Launched on May 8, 2007, FIW has consistently outperformed its peers, including Invesco Water Resources ETF (PHO) and Invesco S&P Global Water Index (CGW), by significant margins [1].

The ETF's investment thesis is grounded in the growing demand for water resources and the potential for water-related businesses to outperform the broader market. FIW's diversified portfolio includes 83 stocks, with a focus on water utilities, treatment, and infrastructure. This broad exposure helps to mitigate risks associated with individual companies and sectors, providing a more stable investment profile.

Recent market performance has been mixed. On July 15, 2025, the ETF experienced a price drop of -1.42%, falling from $109.09 to $107.54. This decline follows a three-day losing streak and marks the lowest point in the ETF's recent trading history [2]. Despite these short-term fluctuations, analysts remain optimistic about FIW's long-term prospects, forecasting a 11.13% rise over the next three months, with a 90% probability of the price ranging between $117.80 and $124.00 [2].

Technical indicators suggest a mixed outlook. While a 3-month Moving Average Convergence Divergence (MACD) buy signal is present, the ETF also faces resistance at key levels, such as $109.65 and $107.55. Additionally, the ETF holds sell signals from both short and long-term moving averages, indicating a more negative forecast in the near term [2].

From an investment perspective, FIW's high expense ratio of 0.53% and relatively low dividend yield of 0.71% are notable drawbacks. These factors can erode long-term returns, particularly for income-oriented investors. However, FIW's strong historical performance and diversified portfolio make it a solid choice for investors seeking exposure to the growing water market.

References:
[1] https://stockinvest.us/stock/FIW
[2] https://seekingalpha.com/article/4801491-fiw-best-choice-if-you-are-determined-to-own-water-etf