Fresh water: a dwindling supply and a growing demand.
Source: "The Water Problem," Zulfiquer Ahmed Amin, Global Policy forum, October 8, 2007.
Although over two thirds of the world is covered in water, 97% of it is salt water. Only 3% is fresh water. Of the world's small supply of fresh water, less than 1% is available for human consumption. Yet the demand for fresh water is growing twice as fast as the global population.
The U.N. estimates that human consumption of water increased sixfold in the 20th century, while the population itself only tripled.1
As if fresh water isn't scarce enough, much of it is wasted due to aging infrastructure. In the U.S., up to 20% is lost to leakage. Replacing the U.S. water infrastructure may cost between $300 billion and $1 trillion. At the current rate of investment, it would take 900 years to get the job done.2
The problem affects more than just drinking water. In northwest China, for example, factories have closed because there isn't enough water. Chinese government economists estimate that environmental troubles generally shave 10% off the country's gross domestic product every year.3
Global spending on water infrastructure is projected to outpace the level of spending on all other infrastructure sectors on an absolute and percentage growth basis through the year 2020.4
Source: Infrastructure to 2030: Telecom, Land Transport, Water and Electricity, OECD, 2006.
This confluence of issues —
- Finite supply of freshwater,
- Challenges of global population growth,
- Modernization of developing populations,
- Need for technology to maximize water supplies,
- Infrastructure to support its transport and storage
— lead many to conclude that water is a critical area for resource development. As such, the water sector represents a significant investment opportunity. Since we are left with little choice but to grow and increase spending in the water sector, the time may be ripe to invest in a water fund.
For more information on any Calvert fund, please contact Calvert at 800.368.2748 for a free prospectus. An investor should consider the investment objectives, risks, charges, and expenses of an investment carefully before investing. The prospectus contains this and other information. Read it carefully before you invest or send money.
Calvert mutual funds are underwritten and distributed by Calvert Distributors, Inc., member FINRA, a subsidiary of Calvert Group, Ltd. #9978 (4/10)
Investing throughout the entire water network.
The Calvert Global Water Fund invests in more than just water. It also invests in a massive network of water-related systems, services, and technologies involved in all stages of water management — from ground to people and back to ground again. Key areas include water and wastewater utilities, water pumps and valves, consulting and engineering to build water infrastructure, and technologies to maximize water supplies through purifying, desalination, and metering.
There is investment opportunity in utilities, infrastructure and technologies that are being used to manage our interaction with this scarce and valuable resource throughout each stage. Here are some examples: water collection, water storage, the infrastructure to move water through pipes from one area to another, desalination, innovations that reduce usage or emphasize re-use of water and systems that disinfect water prior to its discharge back into the environment.
Water. A timely and attractive investment.
As the world's population surges, its collective thirst for water — for drinking, agriculture, industry, and maintaining a high standard of living — will continue to surge as well. Yet the world faces a dwindling supply of fresh water.
The precarious situation related to the supply and demand for fresh water creates a significant need for global investment in sustainable methods of obtaining and delivering water. It also presents a significant growth opportunity for investors. In fact, the water sector has outperformed U.S. and global markets in five out of the last six calendar years.
Source: Zephyr. U.S. Market represented by the Standard & Poor's 500 Index Monthly Reinvested, Global Market Represented by MSCI World Index and Water Sector represented by S-Network Global Water Index Total Return.
On a cumulative basis, returns for global water investments since 2004 have been stronger than the U.S. and global market indices.
Source: Zephyr. U.S. Market represented by the Standard & Poor's 500 Index Monthly Reinvested, Global Market Represented by MSCI World Index and Water Sector represented by S-Network Global Water Index Total Return.
Indices are unmanaged and do not reflect the payment of advisory fees and other expenses associated with an investment in a fund. Investors cannot directly invest in an index. Index performance does not represent fund performance. A fund may perform significantly differently. Index returns are for illustrative purposes only and do not represent actual performance of a Calvert Fund.
A Word About the Investment Risks. Calvert Global Water Fund is subject to the risk that stocks that comprise the water sector may decline in value. The water industry can be significantly affected by common economic trends, such as the availability of water, the level of rainfall and consumption, and other climatic events, in addition to environmental considerations, taxation, and government regulation (including the cost of compliance). The Fund is non-diversified and may invest more of its assets in a smaller number of companies; therefore, gains or losses on a single stock may have greater impact on the Fund. The stock markets in which the Fund invests may also experience periods of volatility and instability. Consequently, the Fund may tend to be more volatile than other mutual funds. Lastly, foreign investments involve greater risks than U.S. investments, including political and economic risks and the risk of currency fluctuations.
For more information on any Calvert fund, please contact Calvert at 800.368.2748 for a free prospectus. An investor should consider the investment objectives, risks, charges, and expenses of an investment carefully before investing. The prospectus contains this and other information. Read it carefully before you invest or send money.
Calvert mutual funds are underwritten and distributed by Calvert Distributors, Inc., member FINRA, a subsidiary of Calvert Group, Ltd. #9978 (4/10)
Broad exposure to strong potential water-related companies.
The Calvert Global Water Fund invests in a well-diversified portfolio of water-related companies that we believe possess the characteristics necessary to potentially produce above-average returns. Professional management by experienced and knowledgeable investment management professionals delivers an actively managed portfolio of carefully researched and selected investments. The Calvert Global Water Fund is part of the Calvert Solution™ Strategies, which includes the Calvert Global Alternative Energy Fund (for more information about the Calvert Global Alternative Energy Fund, click here).
| Objective: | Long-term growth of capital by investing at least 80% of its net assets in equity securities of companies involved in the water sector or water-related services | |
| Fund Symbols: | CFWAX, CFWCX, CFWYX | |
| Fund CUSIPS: | 13161P 797 (A-Class),13161P 789 (C-Class),13161P 771(Y-Class) | |
| Strategy: | Combination of quantitative and fundamental investment processes | |
| Cap Size: | All-market-cap | |
| Geography: | U.S. and non-U.S. companies | |
| Benchmark: | S-Network Global Water Index Total Return | |
| Portfolio Manager: | Jens Peers of Kleinwort Benson Investors International Ltd. | |
| Share Classes: | A, C and Y | |
About Calvert.
Calvert has the expertise to manage a global water fund. Calvert has one of the largest research departments in the U.S. dedicated to environmental, human rights and corporate governance issues. Our team of 18 sustainability research analysts brings a wealth of experience to the complex and sensitive environmental, human rights, and governance issues related to investing in natural resources. When you combine that with Calvert's rigorous analysis and independent thinking, Calvert is a company you can trust. For more information about Calvert, go to www.calvert.com.
An actively managed fund.
Unlike passively managed funds, the Calvert Global Water Fund is actively managed, allowing for a proactive and highly dynamic approach. Backed by a team of research analysts, our portfolio managers scour the market to discern those companies that we believe will have a truly sustainable competitive advantage. In an emerging technology sector that's abundant with opportunity and risk, an active management approach offers investors the added confidence of knowing that investment professionals are constantly reviewing the marketplace to maximize potential while reducing risk.
Calvert is pleased to be working with the Fund's subadvisor, Kleinwort Benson Investors International Ltd (formerly KBC), of Ireland, to manage the Calvert Global Water Fund. They have been actively involved in the water investment field since 2000 and regional equity experts in seven global cities back their dedicated Eco-Funds management team.
Investing throughout the entire water network.
The Calvert Global Water Fund is not just an investment in drinking water or infrastructure, but in the entire water network — capture, storage, delivery, treatment and filtration — encompassing each stage of the water cycle. Water is needed for so much more than just drinking so Calvert wants to make sure that all pieces of the water puzzle are thought about and considered.
A pure water fund.
Unlike other water funds, 80% of the Calvert Global Water Fund's assets are derived from companies in the water sector. Calvert defines a company in the water sector as one in which at least 50% of its business is related to water.
Water is a human right.
We believe that all of us have a right to clean water. When you invest in the Calvert Global Water Fund, you invest in that right. Calvert strives to invest only in companies that support this objective.
Calvert's commitment to solutions to the global freshwater crisis goes far beyond investing in companies that meet our exacting sustainability criteria. Calvert is the only SRI firm in the U.S. with a standalone water fund that has an explicit commitment to advocacy. We achieve this advocacy through the following areas of emphasis:
- Disclosure and Transparency: We strongly encourage companies we invest in to improve the disclosure of environmental, social and governance (ESG) factors and comply with global transparency standards regarding water
- Equitable and Affordable Access: We prevail upon companies to conform to human rights policies and practices to promote equitable and affordable access to fresh water and sanitation
- Mitigation of Water Impact Associated with Climate Change: We seek to increase awareness of the relationship between water use and energy use and introduce strategies to reduce the effects of climate change on water
- Shareholder Engagement: We promote best practices to involved parties to build momentum for building accountability for the water sector
We have also developed close working relationships with environmental, development and human rights organizations with notable expertise and presence on water issues, including the Pacific Institute, the CEO Water Mandate, Ceres, UNEP FI's Water and Finance Workstream and the Institute for Business and Human Rights.
A Word About the Investment Risks. Calvert Global Water Fund is subject to the risk that stocks that comprise the water sector may decline in value. The water industry can be significantly affected by common economic trends, such as the availability of water, the level of rainfall and consumption, and other climatic events, in addition to environmental considerations, taxation, and government regulation (including the cost of compliance). The Fund is non-diversified and may invest more of its assets in a smaller number of companies; therefore, gains or losses on a single stock may have greater impact on the Fund. The stock markets in which the Fund invests may also experience periods of volatility and instability. Consequently, the Fund may tend to be more volatile than other mutual funds. Lastly, foreign investments involve greater risks than U.S. investments, including political and economic risks and the risk of currency fluctuations.
Investment in mutual funds involves risk, including possible loss of principal invested.
For more information on any Calvert fund, please contact Calvert at 800.368.2748 for a free prospectus. An investor should consider the investment objectives, risks, charges, and expenses of an investment carefully before investing. The prospectus contains this and other information. Read it carefully before you invest or send money.
Calvert mutual funds are underwritten and distributed by Calvert Distributors, Inc., member FINRA, a subsidiary of Calvert Group, Ltd. #9978 (4/10)
Investments along the water cycle.
By investing in the Calvert Global Water Fund, you can invest in a broad array of companies around the world with a primary focus on water. The fund is diverse, with investments spanning geographic regions and every sub-sector of the water cycle, including collection, treatment, usage and distribution of water.
Here are just a few examples of the global companies that the Calvert Global Water Fund is invested in as of March 31, 2010:
Pentair has�a substantial presence in emerging markets such as India. Pentair Water India�has approximately 575 employees in manufacturing, research and sales locations in Goa, New Delhi and Hyderbad. This team partners with Water Health International, to address the lack of clean water in rural villages. In Goa, Pentair constructs complete water treatment systems. Water Health and Pentair�then install the systems which give access to safe drinking water for the community. Through this partnership, Pentair has installed 50 systems in the southern state of Andhra Pradesh and an additional 30 systems in other regions, providing access to clean water to thousands of people.
On the Web: Partnering to Deliver Clean Water in India (external link)
Athough Brazil boasts one of the world's most�important natural water resources in the world, Brazil's rivers and coasts are increasingly under stress due to increasing pollution, which is now threatening the tourism-based economy. Arcadis, a Dutch water infrastructure company, is involved in a massive sanitation improvement project for the state of Baixada Santista to address the fact that 80 percent of the monitored water�has failed to meet quality standards. This sanitation improvement project involves more than 1,000 kilometers of sewage network, 125,000 new household sewage connections, 7 new wastewater treatment plants, and 100 pumping stations.
On the Web: Sao Paulo Coast Sanitation Project (external link)
Hyflux is based in Singapore and its principal activities include water and renewable resources management. Hyflux was an early entrant to the Chinese market, having established itself since 1994. Two of Hyflux's plants in China are water recycling plants. Transforming wastewater into safe drinking water is made possible today thanks to better, more effective technologies that can properly treat dirty water and eliminate the hazards posed by organic contaminants, industrial pollutants, and pharmaceuticals. Water recycling is an ideal choice for areas that are not candidates for desalination, such as the interior regions of China, India, and Africa. This approach to water management is also well-suited for high-growth areas that do not have consistent yearly rainfall yields, which is increasingly the case in China and India.
Japan-based multinational Kurita Water Industries specializes in water-treatment chemicals and equipment. Kurita has developed numerous new technologies that have not only substantially saved costs in groundwater pumping, but has also resulted in 70% less surplus sludge waste in wastewater and rendered contaminated ground water harmless. Kurita has also created the Eco Shuttle, a system that recycles used water treatment chemical containers, therefore reducing waste and saving resources.
Flowserve's pumps, valves, and seals play an integral role in the movement, control, and protection of critical water resources. Flowserve is committed to extending its sustainability mission to its day to day operations. In 2008, Calvert began a dialogue with senior executives at the company to encourage Flowserve to disclose relevant environmental, social and governance (ESG) policies and programs. The company was eager to implement a sustainability program and was in the process of developing a reporting mechanism when the dialogue first began. Flowserve now has a Chief Sustainability Officer to oversee the company's corporate responsibility efforts, and the company recently released its first sustainability report.
Company holdings represented the following percentages of assets under management in the Calvert Global Water Fund as of March 31, 2010: Arcadis, 1.79%; Flowserve, 4.30%; Hyflux, 1.51%; Kurita, 3.07%; and Pentair, 4.72%. Calvert may or may not still invest in, and is not recommending any action on, companies listed. For current information, see individual holdings on www.calvert.com. Current and future portfolio holdings are subject to market risk.
For more information on any Calvert fund, please contact Calvert at 800.368.2748 for a free prospectus. An investor should consider the investment objectives, risks, charges, and expenses of an investment carefully before investing. The prospectus contains this and other information. Read it carefully before you invest or send money.
Calvert mutual funds are underwritten and distributed by Calvert Distributors, Inc., member FINRA, a subsidiary of Calvert Group, Ltd. #9978 (4/10)