Sprinkle your investment portfolio with water!

Yizheng Jin, Eduardo Roca, Bin Li, Victor Wong, Adrian Cheung

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

We investigate the profitability of water-related investments and their diversification benefits in a portfolio context. Motivated by the need to understand whether or not water indices and water funds are desirable vehicles for investment, we analyse the performance of a major water index independently as well as within portfolios. Our results indicate that the water asset class outperforms traditional asset classes, and has the capacity to produce diversification effects in portfolios primarily comprised of listed equity and bond assets. In addition, our study suggests that the diversification benefits of the water asset class are likely to be a result of its superior performance over the stock benchmark, rather than its low correlation with traditional asset classes. Our study provides a valuable contribution to the small, yet growing body of literature on water investments.

Original languageEnglish
Pages (from-to)43-59
Number of pages17
JournalInternational Journal of Water
Volume9
Issue number1
DOIs
Publication statusPublished - 2015

Fingerprint Dive into the research topics of 'Sprinkle your investment portfolio with water!'. Together they form a unique fingerprint.

  • Cite this