5 Best Natural Resources ETFs

4. First Trust Water ETF (NYSE:FIW)

5-Year Performance as of October 9: 76.91%

Introduced in May 2007, the First Trust Water ETF (NYSE:FIW) aims to replicate investment results that align with the performance of the ISE Clean Edge Water Index. This index includes companies that generate a sizable portion of their revenues from the potable and wastewater industry. As of October 9, the ETF manages total net assets worth $1.33 billion, while featuring an expense ratio of 0.53%. It is one of the best natural resources ETFs to buy. 

Advanced Drainage Systems, Inc. (NYSE:WMS) is one of the top holdings of the First Trust Water ETF (NYSE:FIW). Advanced Drainage Systems, Inc. (NYSE:WMS) specializes in the manufacture of water management solutions, including pipes and drainage. According to Insider Monkey’s second quarter database, 30 hedge funds were bullish on Advanced Drainage Systems, Inc. (NYSE:WMS), as opposed to 21 hedge funds from the preceding quarter.

Carillon Tower Advisers had this to say about Advanced Drainage Systems, Inc. (NYSE:WMS) in its Q3 2022 investor letter:

“Advanced Drainage Systems, Inc. (NYSE:WMS) rose during Q3, as the company’s water drainage systems are in high demand. While residential construction activity is plummeting due to higher rates, non-residential construction activity is less immune to higher rates. The company produces thermoplastic corrugated pipe that is lower cost and more effective than traditional concrete drainage systems. As it relates to margins going forward, many input costs for the company’s drainage systems peaked earlier this year, so the price-cost shift should move in the company’s favor going forward.”