Water, a safe investment option.

The global water sector would remain a safe investment choice during 2010 and for several years beyond, a US-based investment management firm has said.

The consultancy, which tracks the water sector, and some of its top companies regularly, has identified water conservation and efficiency, recycling and reuse as the hot areas of investment in the sector.

A report from Summit Global Management entitled 'The Case for Water Equity Investing 2010' has stated that water being an underestimated resource, many might not realise that it represents the "world's third biggest (industry sector) in terms of embedded capital behind only oil & gas and electrical power", and the global market is estimated to be $500 billion per year.

The report said that the global economic crisis will undoubtedly impact the volume and rate of investment going into hydrocommerce in the near term. But the investment side of the industry has certainly evolved over the last 25 years, and the changes are virtually all positive.

Given the compelling, recession-resistant business model, combined with the urgency of water challenges across the globe, the consultancy is of the view that the outlook for water stocks today is much better than it was 25 years ago, or even five ago. Hydrocommerce will undoubtedly remain one of the world’s most vital industries, and will continue to offer some of the best risk/reward characteristics to the intelligent long-term investor, it added.

The findings of the report come as a shot in the arm for those looking at water as an investment option. Water scarcity is now a global issue. Going ahead, as climate changes come into play more strongly and affect supplies, population growth raises demand and pollution eats into already-scarce resources, it would be a profitable industry for those who come up with viable solutions.