Invesco Water Resources ETF underperforms S&P 500 and peers since late 2024

The Invesco Water Resources ETF (PHO) has lagged behind the S&P 500 and other water-focused ETFs since late 2024 due to its portfolio's limited exposure to core water industry stocks. Top holdings like Waters, Roper, and Ecolab have only modest links to the water theme, which may limit PHO's appeal for most investors. The ETF could see better performance if the AI capital expenditure boom slows and sectors like software and life sciences improve, given its portfolio tilt. However, the current structure of PHO does not strongly meet investor needs for pure water industry exposure.