ETF Education Report: Invesco Global Water ETF (PIO)

What this ETF is trying to do

The Invesco Global Water ETF (ticker: PIO) is an exchange-traded fund that focuses on the water industry. It holds a variety of companies involved in different parts of the water sector. Based on the provided data, this fund holds 51 total companies.

Top Holdings

Because the list provided is a partial list, these are the largest companies in the fund:

• Ebara Corp (8.21%)

• Ferguson Enterprises Inc (8.19%)

• Ecolab Inc (8.06%)

• Pentair PLC (7.26%)

• Companhia de Saneamento Basico do Estado de Sao Paulo (6.91%)

• Waters Corp (4.39%)

• Compania de Saneamento de Minas Gerais Copasa MG (4.20%)

• IDEXX Laboratories Inc (3.94%)

• Veolia Environnement SA (3.81%)

• Agilent Technologies Inc (3.75%)

Please remember that holdings can change over time.

What the numbers show

When looking at an ETF, it is important to know the difference between "price return" and "total return." Price return only tracks how much the share price moves. Total return includes both the price movement and any cash distributions paid out.

• Year-to-Date (YTD): The price return is approximately -1.94%, while the total return is approximately -1.16%.

• One-Year: The price return was approximately -3.20%, and the total return was approximately -2.31%.

• Three-Year: The price return was approximately 26.75%, and the total return was approximately 30.36%.

To see how the price has changed recently, we can look at an estimated price from roughly one year ago, which was $44.73. The current price is $43.30.

Income and distribution explanation

Some investors look for "distributions," which are cash payments made by the ETF. This ETF has a distribution yield of approximately 0.93%. It usually pays out quarterly, and it has made 4 payments over the last 12 months. While these payments provide cash, they are not the same as total return.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling share price can sometimes be related to this, they are not the same thing. For this ETF, the erosion-risk score is 94, which is labeled as "Stable / sideways," and the erosion severity is rated as "good." There is no severe erosion-risk flag for this fund.

Pros

• The fund has shown a strong three-year total return of approximately 30.36%.

• The erosion-risk score suggests the fund is currently considered stable or sideways.

Cons

• The price return and total return have both been negative over the last year and year-to-date.

Beginner takeaway

When studying an ETF like PIO, remember that a high distribution yield does not guarantee you will make money; you must also look at the price return. Always distinguish between the movement of the share price and the total return, which includes cash payments.