🤝 BFF Take
FIW's Lower Cost and Stricter Water Focus Give It a Narrow Edge
PHO (Invesco Water Resources) holds 37 water infrastructure and technology companies at 0.59%. FIW (First Trust Water ETF) holds 36 companies at 0.53%. Both fund water-related companies: utilities, treatment equipment, infrastructure, testing, and technology. The overlap between the two portfolios is high. FIW applies a stricter "pure play" screen, requiring companies to derive the majority of their revenue from water-related activities. PHO casts a slightly broader net and includes companies with meaningful but not dominant water exposure. FIW's stricter mandate and lower cost make it the better choice for investors who specifically want water theme purity. Both are small, illiquid funds. Bid-ask spreads should be checked before buying and limit orders used.
📋 Quick Takeaways
💧PHO: 0.59% ER, 37 holdings, $2B AUM. FIW: 0.53% ER, 36 holdings, $1.5B AUM.
🔬FIW requires companies to derive most revenue from water activities. PHO allows broader water-adjacent exposure.
⚠️Both funds are small and thinly traded. Use limit orders. Bid-ask spreads matter here more than the ER difference.
📊 Data-Based Take: FIW has the lower fee
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
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Reviewed by a CFA® Charterholder · Data updated Jun 2026 · Educational only, not financial advice
PHO
Invesco Water Resources ETF
FIW
First Trust Water ETF
📋 PHO vs FIW — Key Facts Side by Side
| Metric |
PHO |
FIW |
| Fund Name |
Invesco Water Resources ETF |
First Trust Water ETF |
| Issuer |
Invesco |
First Trust |
| Tracks Index |
Nasdaq OMX US Water Index |
ISE Clean Edge Water Index |
| Expense Ratio |
0.59% |
0.53% ✓ |
| Cost per $10K/yr |
$59.00 |
$53.00 |
| AUM |
$2B |
$1.5B |
| Holdings |
37 |
36 |
| Inception |
2005 |
2007 |
| 1-Year Return |
+18.00% |
+17.50% |
| 3-Year Return |
+5.50% |
+5.20% |
| 5-Year Return |
+10.20% |
+9.80% |
| Avg Bid-Ask Spread |
0.10% |
0.12% |
Data from ETF BFF database. Returns are annualised. Not investment advice.
📊 PHO vs FIW — Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Should You Buy PHO or FIW?
Choose if...
PHO
- You already use Invesco and prefer staying within their fund family
Choose if...
FIW
- You want the lowest fees — saves ~$6/yr per $10K vs PHO
- You already use First Trust and prefer staying within their fund family
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❓ PHO vs FIW — Frequently Asked Questions
What do PHO and FIW invest in?
PHO and FIW both invest in companies that earn most of their revenue from water-related activities: water utilities, wastewater treatment technology, water testing equipment, water infrastructure, and water pumping and filtration companies. Holdings include companies like Xylem, Watts Water Technologies, American Water Works, and Veolia subsidiaries. Both are US-focused but include some international listings.
Are water ETFs a good investment?
Water ETFs provide thematic exposure to a sector supported by long-term trends: population growth, infrastructure aging, water scarcity, and increasing regulatory standards for water quality. However, both PHO and FIW are small funds with limited liquidity and high expense ratios above 0.50%. Their long-term returns have been positive but not dramatically different from broad market returns. Water ETFs work best as a small satellite allocation for investors with specific views on water infrastructure spending.
How do PHO and FIW perform relative to the S&P 500?
Water ETFs have historically delivered returns below the S&P 500 over most periods, because water infrastructure companies tend to be defensive, utility-like businesses with lower growth rates than the technology companies that dominate the S&P 500. In periods of infrastructure spending focus or regulatory tightening around water quality, PHO and FIW can outperform. Past performance does not guarantee future results.
What is the minimum investment for PHO or FIW?
Both PHO and FIW trade like stocks on the NYSE. You can buy a single share. PHO trades at roughly $60-70/share and FIW at roughly $100-110/share. As with any ETF, use limit orders rather than market orders due to lower trading volumes. The bid-ask spread on thinly traded thematic ETFs can be 0.10-0.20%, adding hidden costs beyond the stated expense ratio.
New to ETF investing? See answers to the most common ETF questions →
ℹ️ Data shown is for educational purposes and may not reflect the most current figures. Returns are trailing price-based and exclude dividend reinvestment. Past performance does not guarantee future results. ETF BFF is not a licensed financial advisor — this is not personalized financial advice.