Infrastructure-related ETFs have been one of the most popular thematic categories to emerge in 2021, as year-to-date net inflows reached $4.2 billion in June (as of 6/30/21).  As investors seek to capitalize on expectations of fiscal stimulus in the US, we believe infrastructure-related themes may gain further momentum in the months ahead.  While there are many different types of "infrastructure" to consider, we find the water theme to be particularly compelling, supported by both long-term trends and potential near-term catalysts.  Moreover, we infer that most investors have only minor exposure to this theme, as the ISE Clean Edge Water Index represents just 1.2% of the Russell 3000® Index's market capitalization (as of 6/30/21).  It is also possible that your average investor may think in terms of water utilities rather than water infrastructure companies with respect to this theme.

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