Supply Conditions
There is a limited supply of fresh water, and while technologies and treatment methods are being developed to tap into new reservoirs, we are still likely to face challenges as our ever-expanding world population grows thirstier. Growing rates of urbanization across emerging Asia and Latin America are also bolstering the demand for this essential good; this increase in population spurs an increase in demand for food and since water is a necessary component in farming, this puts extra strain on already tight supply conditions.
Regulations
The reason why most water equities receive little to no attention from growth-hungry investors is because the they find themselves in heavily-regulated markets. Water companies are always faced with the challenge of delivering a crucial product to consumers while at the same time generating a profit for shareholders as well as trying to avoid political backlash. As such, the water sector offers stability similar to electric utilities from a fundamental perspective, but it does warrant a closer look from those looking to tap into a rapidly expanding corner of the economy.