FuW Fund Portrait: Water - the elixir of all life

Water is more than an essential resource: it is an attractive investment opportunity. As our fund manager Stefan Schütz explains in the ‘Fonds’25’ magazine published by Finanz und Wirtschaft, water is often not available in the required quantity or quality, which requires considerable investment. You can find out what other drivers the water sector relies on in the full article by Damien Martin.
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Water concerns us all. The human body consists of up to 65% water, and this sometimes cold liquid is the elixir of all life.
of all life, and access to it is not guaranteed equally well everywhere on our planet. This is not only true in Africa, where there is generally sufficient rainfall, as Stefan Schütz, fund manager of the Tareno Global Water Solutions Fund, explains.

The issue is also accompanied by problems in the industrialised countries of the West. These are always the same four problems. ‘The issues are the same across all regions and can be categorised,’ says Schütz. For example, there is either too much or too little water, or access or the quality of the water is too poor.

 

Strongly regional theme

According to Schütz, the fact that these topics have an impact across regions is also due to the fact that water is very much a regional issue. ‘The issues surrounding water in Basel, for example, are completely different to those in Zurich.’ According to Schütz, this is also the biggest challenge and opportunity as the manager of this fund. After all, there will be no company that dominates the market in a winner-takes-it-all manner and drives returns. But there will always be small and medium-sized companies that profitably realise the topic of water in their region. This is why, according to Schütz, the fund also focuses on small and mid-cap companies.

As early as 2024, but also in the current year, it is the infrastructure programmes in particular that will shape the water-related market,
explains Schütz. In the USA, they have already been initiated by Joe Biden, and Donald Trump is expected to further boost spending. There are also some trends that speak in favour of water as an investment, says Schütz. ‘Chip production requires ultra-pure water. In order for this water to be made available, investments in infrastructure are needed.

Portrait Stefan Schütz Tareno AG

Long-term partner

In addition to the structural drivers, overall market-driven factors such as interest rates and energy prices are also particularly important. ‘The entire cost side is very important, including interest rates, commodity and energy prices.’ According to Schütz, the fund is also heavily exposed to cyclical sectors such as industry and construction. The fund invests in a topic that will be with us for a long time. Schütz therefore recommends a holding period of at least five to seven years. The topic of water is not something for quick money per se, but for a sustainable and ecological return. ‘The mill grinds slowly,’ comments Schütz.

LINK TO ARTICLE (in German)

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