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.