Correction in the water sector - entry opportunity for investors?

Donald Trump’s tariff policy has triggered a new trade conflict – with noticeable consequences for the global stock markets. The increasing uncertainty led to widespread price declines, from which the Tareno Global Water Solutions Fund was not spared. As of April 11, 2025, the YTD performance was -9.9%. Since its launch in 2007, however, the          W-EUR share class has recorded an overall performance of +266%.

But in every crisis there is also an opportunity: the current setbacks open attractive entry opportunities. Despite geopolitical tensions, the water sector is convincing thanks to its resilience and growth potential. Below we present specific programs and projects for the modernization of water infrastructure – they illustrate why investments in water technology are steadily increasing and gaining relevance in the long term.

Chart Performance since inception, W EUR tranche as of 11.04.2025

Source: Tareno Asset Management

Note: Fund inception: September 10, 2007. Past performance is not indicative of future results. The performance shown does not take into account any commissions and costs charged.

Europe relies on targeted investment programs to make water infrastructure fit for the future

• United Kingdom: The start of AMP8 (Asset Management Period 8), a regulatory framework for water companies in England and Wales that runs from April 2025 to 2030, marks a significant increase in investment in water companies. This is a five-year investment cycle that provides planning certainty for investors.
• Major project in northern England: A consortium led by the Austrian company Strabag has been selected for a 3 billion project to modernize 50 km of water pipes.
• Italy: The European Investment Bank approved a EUR 30 million green loan for the modernization of water networks in the Abruzzo region, focusing on improving the reliability of services and reducing water losses for some 450,000 inhabitants.

These developments reflect the clear political commitment to strengthening water infrastructure in Europe.

USA: Government funding and private partnerships

In the US, federal programs and public-private collaborations are creating momentum. In contrast to many other national and international programs, these projects have not been called into question by Donald Trump and are strengthening the quality of care and resilience in US communities.

• The extensive US infrastructure program is expected to enable investments of USD 6.2 billion in water infrastructure in the 2025 financial year alone.
• In Jackson, Mississippi, the Jacobs company is modernizing the municipal water system for 180,000 people – a prime example of the role of the private sector.

Brazil: Private funds for universal water supply

Brazil is setting ambitious infrastructure targets:

• USD 100 billion is to be invested by 2033 to ensure universal access to clean water.
• Planned concession awards in states such as Pará or Pernambuco could mobilize up to USD 9.2 billion in private investment.

The country shows how public-private partnerships can contribute to achieving national development goals.

Conclusion: the water sector remains a strategic investment

The recent price slumps in the wake of geopolitical tensions have also affected water shares – but are opening up attractive entry opportunities:

• Our water fund trades at a price-to-earnings (P/E) ratio of 16.7x, below its five-year average of 26.3x and well below the 2021 peak of 36.6x. This suggests an attractive entry point for investors seeking exposure to the sector.
• Long-term factors such as urbanisation, population growth and the increasing demand for digital infrastructure (e.g. data centres) continue to drive the need for efficient and resilient water systems.

Developments in the first quarter of 2025 are impressive proof that water infrastructure is and remains a key global topic with a high need for investment. The combination of long-term drivers, regulatory support and attractive valuations makes investments in the water sector a compelling choice – especially in challenging market phases.

For more information about the Tareno Global Water Solutions Fund and the water sector, please see our publications.