In the pantheon of glamorous investments, water isn’t it, likely because it’s seen as a necessity. Adding to the “unsexy” feel of water-related stocks is the fact that many hail from the not-so-sexy industrial and utilities sectors.

Necessary, yes. Artificial intelligence (AI) or cryptocurrency levels of glitz, no, but that doesn’t diminish the arguably unsung case for water investing. For those that want to capitalize on water investment opportunities while eschewing stock-picking, breathe a sigh of relief because there are six pertinent exchange traded funds, some of which are among the earliest iterations of thematic ETFs.

The First Trust Water ETF (NYSE: FIW) is part of that group. FIW, which follows the ISE Clean Edge Water™ Index, is a $1. 95 billion ETF that turned 18 years old in May so it’s neither small nor young. FIW is also relevant today and perhaps for the long-term.

Water isn’t just needed for healthcare, cooking and bathing – vital functions to be sure. It’s also crucial in technology. As just one example, the semiconductor production process is notoriously water-intensive. Count AI as another massive water consumer.

“AI data centers to drive annual water consumption for cooling and electricity generation to approximately 1,068 billion liters by 2028 (our base case) - an 11x increase from 2024 estimates,” according to Morgan Stanley.

FIW an Industrial Renaissance Play

Quiet as it has been kept, water is at the heart of U. S. trade policy and this country’s efforts to usher in an industrial renaissance.

“The reindustrialization of the U. S. economy is set to dramatically increase water demand over the next several years, particularly for water-intensive industries such as semiconductor manufacturing,” according to First Trust research. “New chip fabrication facilities can consume as much as 10 million gallons of ultra-pure water daily to ensure contaminant-free silicon, with roughly 1. 5 gallons of water needed to produce each gallon of ultra-pure water. ”

Roughly 59% of FIW’s 36 holdings are industrial stocks, making the ETF relevant at a time when 25 chip factories are under construction in the U. S. It’s not just semiconductors that need water. The same is true of AI and the fossil fuels industry (fracking), among others. Those industries’ water needs are so substantial it’s not a stretch to say that water is the lubricant of the U. S. economic engine. Consider Google’s water consumption, which has increased in exponential fashion.

“Between 2017 and 2024, Google’s water withdrawals—total water extracted from sources, including any later replenished— grew a rate of 20% per year, primarily driven by the need to cool data centers,” adds First Trust. “As artificial intelligence applications expand, the need for more computational resources and water for cooling is expected to continue to rise for Google as well as the other hyperscalers. ”

Water Infrastructure Still Matters

With more than 73% of its weight in industrial and utilities stocks, FIW feels like an infrastructure ETF – something much less glamorous than a tech fund.

There’s nothing wrong with that, particularly because infrastructure – a core competency of many FIW holdings – is one of the most pivotal pieces in the water puzzle. It’s how water is consumed and delivered to end users, including high-tech firms. Infrastructure is also at the heart of the water investment thesis because the U. S. scores poorly in this category and needs to devote massive sums for improvement.

“The American Society of Civil Engineer’s (ASCE) 2025 Report Card for America’s Infrastructure assigned poor grades for water infrastructure, including a C- for drinking water, a D+ for wastewater, and a D for stormwater,” concludes First Trust. “This reflects decades of underinvestment, with Congressional Budget Office data showing water infrastructure spending growing at just a 0. 3% rate over the past 20 years. 13 The ASCE projects that $1. 65 trillion of investments will be needed for drinking water, wastewater, and stormwater infrastructure from 2024-2033. With just $655 billion funded, the remaining $1 trillion funding gap represents the largest of all infrastructure sectors. ”