HSBC dips its toes into the water index market

In line with the trend toward alternative energy and global natural resource indices, HSBC has announced the creation of the new water-centric HSBC Optimised Global Water Index. The index will focus on companies that concentrate on water collection, storage, purification, distribution, metering, desalination and sanitation, but isn’t pure play — leaving room for many companies linked closely to the water sector.

According to an HSBC press release [pdf], the time is right for investment in the water sector.

“Water and air are the most precious commodities for life on Earth. Mankind has taken both for granted and not taken care in preserving the quality of either,” HSBC said. Continuing, “This deteriorating balance between supply and demand on the one hand and the increased uncertainty of supply due to climate change makes water a long term attractive investment opportunity.”

The index will be offered as two versions: the HSBC Optimised Water Total Return Index, which includes ex-dividend adjustments; and the HSBC Optimised Water Price Return Index, which excludes the effects of dividends.

Comprising a maximum of 20 stocks, the index will only include companies eligible for foreign investment.

For complete details on the index, see HSBC’s Water Brochure [pdf].

Source : IndexUniverse