Tapping into
the Value of Water
The Global Water Crisis
1% of Earth's
water is potable.
56% deficit in water
supply by 20301
people depend
on surface water
to meet their basic needs.2
= 100 million
Water Is Facing
Unprecedented Demand3
69% of all water consumption
is used for agriculture.
Food demand to increase by
60% by 2050
12% of all water is used for
domestic purposes.
Domestic demand is expected to increase
300% in Africa and Asia and 200% in Central
and South America by 2050.
19% of all water is used for
industrial purposes.
Global water demand for manufacturing
will increase by 400% by 2050.
Water Resource Issues on the Rise
Irresponsible extraction,
inequitable access,
pollution,
and climate change
all contribute to the water crisis.
The Sustainability Challenge:
Doing More with Less4
Did you know it takes 2000 gallons of water to
produce one pound of beef?
But only 25 gallons to produce a
pound of lettuce.
The Infrastructure Challenge5
Some water infrastructure in the United States is more than 100 years old and leaking, leaking 20% of its water throughput.
There is a water main break every two minutes and an estimated 6 billion gallons of treated water lost each day in the U.S.
That's enough to fill over 9000 olympic swimming pools.
Yet Water Has Been a Compelling Investment
Past performance is not indicative of future results.
Source: Virtus Performance & Analytics. Data as of S&P Global Water Index inception 11/16/2001.
VIRTUS DUFF & PHELPS WATER FUND Be a Part of the Clean-Water Solution
Supply
Exploration,
engineering,
and design
Wastewater
treatment
Pumping stations
and pipelines
Well
drilling
Desalination
equipment
Efficiency
Advanced
irrigation equipment
Drought
resistant crops
Smart meters
Leak detection
devices
Automation
controls
Quality
Disinfection
chemicals
Sanitary
appliances
Wastewater
technology
Filtration
Monitoring
and testing
Key Features
Precision exposure to sustainable water
Targets pure-play companies, committed to addressing water scarcity, increasing water quality, and enhancing water efficiency. Investors may benefit fully from the secular growth trend that the water theme represents globally.
A resilient portfolio in ever-changing market conditions
The Fund focuses on what the manager considers high-quality water stocks backed by strong structural drivers, seeking to deliver stability in difficult market environments while generating attractive long-term growth and returns.
Time-tested experience in Water and ESG investing
The Duff & Phelps team has decades of experience in listed real assets and water-related investment expertise, engaging in a recurring dialogue with global water leaders. The Fund is aligned to four of the 17 United Nations Sustainable Development Goals (SDG), with a focus on Goal 6, “Clean Water and Sanitation,” offering potential exposure to financial, environmental, and social value.
The Takeaway
Amid a global warming crisis, companies addressing supply, efficiency, and quality can make for a timely investment opportunity with the potential to generate financial, environmental, and social alpha.
Learn more about the investment opportunity and the Virtus Duff & Phelps Water Fund.
Sources:
1 Source: WorldWaterDay.org and World Resources Institute 2020 (Combating the Coronavirus Without Clean Water)
2 Source: UN World Water Development Report 2018 (Nature-Based Solutions for Water)
3 Source: UN World Water Development Report 2021 (Valuing Water)
4 Source: Water Footprint Network (2008); Ecolab, Closing Keynote Presentation from the Financial Times Water Summit from Doug Baker, CEO of Ecolab (October 2015)
5 Source: 2021 Report Card for America’s Infrastructure, www.infrastructurereportcard.org
IMPORTANT RISK CONSIDERATIONS:
Market Volatility: Local, regional, or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the portfolio and its investments, including hampering the ability of the portfolio manager(s) to invest the portfolio’s assets as intended. Issuer Risk: The portfolio will be affected by factors specific to the issuers of securities and other instruments in which the portfolio invests, including actual or perceived changes in the financial condition or business prospects of such issuers. Equity Securities: The market price of equity securities may be adversely affected by financial market, industry, or issuer-specific events. Focus on a particular style or on small or medium-sized companies may enhance that risk. Water-Related Risk: Because the portfolio focuses its investments in water-related companies, it is particularly affected by events or factors relating to this sector, which may increase risk and volatility. Focused Investments: To the extent the portfolio focuses its investments on a limited number of issuers, sectors, industries or geographic regions, it may be subject to increased risk and volatility. Foreign Investing: Investing in foreign securities subjects the portfolio to additional risks such as increased volatility, currency fluctuations, less liquidity, and political, regulatory, economic, and market risk. Sustainable Investing: Because the portfolio focuses on investments in companies that the Manager believes exhibit strong environmental, social, and corporate governance records, the portfolio’s universe of investments may be smaller than that of other portfolios and broad equity benchmark indices. Prospectus: For additional information on risks, please see the fund’s prospectus.
INDEX DEFINITIONS
The MSCI AC World Index (net) is a free float-adjusted market capitalization-weighted index that measures equity performance of developed and emerging markets. The S&P 500® Index is a free-float market capitalization-weighted index of 500 of the largest U.S. companies. The S&P Global Water Index (net) is a modified capitalization-weighted index comprised of 50 of the largest publicly traded companies in water-related businesses that meet specific invest ability requirements. The index is designed to provide liquid exposure to the leading publicly-listed companies in the global water industry, from both developed markets and emerging markets. The indices are calculated on a total return basis with net dividends reinvested. The indices are unmanaged, their returns do not reflect any fees, expenses, or sales charges, and they are not available for direct investment.
Please consider a Fund’s investment objectives, risks, charges, and expenses carefully before investing. For this and other information about any Virtus Fund, contact your financial representative, call 800-243-4361. Read it carefully before investing.
Not insured by FDIC/NCUSIF or any federal government agency. No bank guarantee. Not a deposit. May lose value.