The GWI Global Water Index underperformed the benchmark MSCI World Index last year largely because of the diabolical performance of Asian water stocks. Big mark-downs on the share prices of Manila Water, Poten Environment, China Water Affairs and Wabag helped ensure that the GWI Asia stocks index increased by just 1.7%. This ensured that the GWI Global Water Index rose by 26.4% against 28.4% for the MSCI World Index in dollars. The GWI Americas index was up 37.4% and the GWI Europe index up 26.6% (see stocks commentary p8). Most of the big specialist water funds avoided the Asian misery and comfortably outperformed the MSCI World Index in the relevant currency. The active fund managers should not feel too pleased with themselves, however: the top two performers were both exchange traded funds (i.e. fixed portfolios of water-related stocks). Nevertheless, it was a great year for inflows into thematic water funds. Including performance, total assets under management in specialist water funds increased by 56% to more than $25 billion during the year.
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