The global water crisis: four funds investing in solutions

By James Yardley on 21 October 2026 in Specialist investing, Sustainable investing

We take water for granted because it’s always there when we turn on the taps, but the reality is there’s a huge global shortage of this natural resource. 1 in 4 people – 2.1 billion – lack access to safe drinking water or sanitation services, and the problem is expected to worsen dramatically by 2030*.

Freshwater demand is projected to outstrip supply by 40% within four years unless consumption trends and agricultural practices change dramatically**. But a fightback is underway. Governments are ploughing billions of pounds into finding solutions, and this is creating investment opportunities.

Here we look at what’s causing the problem, the companies looking for solutions, and the investment funds that could be worth considering.

Why is there a shortage?

Population growth, climate change, agricultural overuse, pollution, and poor resource management are the main reasons there isn’t enough water. According to a United Nations University report, this is creating a condition known as ‘water bankruptcy’ and calls for action to prevent further irreversible damage**.

Companies involved in solving the problem

Finding solutions is a mammoth undertaking, which is why thousands of companies operate across different sub-sectors. These include businesses in desalination, which turns seawater into freshwater, as well as wastewater treatment centres, leak detection, filtration, and agricultural water efficiency.

A prime example is Watts Water Technologies, which designs and manufactures products that improve water quality in commercial and residential settings. Another is Sabesp, a Brazilian company that collects, treats, and distributes water and builds distribution infrastructure. American Water, meanwhile, is the largest regulated water and wastewater utility in the US, serving around 14 million people across 14 states.

How to invest

There are different options. The first is choosing a specialist water-focused fund that provides focused access to this sector. You can also go for an environmental portfolio. This usually includes some water-related stocks, while taking a more diversified approach. Infrastructure funds are another option, investing in companies involved in the construction and maintenance of essential systems, including water networks.

However, you don’t necessarily need a specialist fund to access the theme. A more generalist global equity portfolio may also have meaningful exposure to companies tackling water-related challenges as part of a broader mix of investments.

Regnan Sustainable Water and Waste

The fund’s experienced managers, Bertrand Lecourt and Saurabh Sharma, tend to favour medium-sized companies with good earnings visibility. Industrial names and utility companies account for more than 80% of the overall sector allocation, while North America and Europe ex UK are the most prominent geographic locations. We believe the water theme is under-researched, and this portfolio can provide investors with a differentiated product that has minimal overlap with global equity funds.

Ninety One Global Environment

Ninety One Global Environment also takes a high-conviction approach, with just 20-40 holdings, and is designed to benefit from the trillions of dollars being spent to meet global temperature goals. It aims to achieve total returns from both capital growth and income over at least five-year periods, while investing in companies with a positive environmental impact. The managers, Deirdre Cooper and Graeme Baker, use an impressively comprehensive proprietary screen to build the fund’s investable universe.

FTF ClearBridge Global Infrastructure Income

The fund is designed to provide a good income, stable growth, and some inflation protection. It targets a yield of greater than 5%. Its philosophy is to take a very long-term approach with a focus on absolute rather than relative returns. This means looking at cash flow generation and regulatory dynamics. We think it’s difficult to find a more experienced team of infrastructure specialists, and we particularly like the fund’s track record of dividend growth alongside a generous yield.

WS Montanaro Global Select

The fund itself isn’t built around water or environmental themes. Instead, manager George Cooke and his team scour the globe for high-quality small and medium-sized businesses with strong growth prospects and sustainable competitive advantages. The result is a concentrated portfolio of around 25-40 companies. This fund illustrates how a generalist global portfolio can still provide meaningful exposure to the water story without making it the sole focus of an investment.

*Source: water.org
**Source: United Nations University, Global Water Bankruptcy, 2026
***Source: fund factsheet, 30 September 2026
^Source: fund factsheet, 28 August 2026