Investing in oil has been a hot topic over the last year, but the International Securities Exchange hopes investors will latch onto a new investment based on another precious commodity: water.
The International Securities Exchange, New York, launched a 20-stock water index it developed with investment firm Boenning & Scattergood Inc., West Conshoshoken, Pa., according to Bruce Goldberg, ISE's chief marketing officer. Options on the ISE-B&S Water index, which includes companies in the water infrastructure, filtration, distribution, purification and treatment industries, began trading Jan. 5.
"We're creating a presence in the index world and the challenge is, how do we create products that can be distinguished from those that trade at other competitors?" he said in a telephone interview. "We have a homebuilders index and a ‘sindex,' which covers alcohol, tobacco and gambling, and the water index fits into that realm."
Investment interest is likely to come from both institutional and retail investors, he said.
"A good idea's a good idea; if it can appeal to an individual, it can appeal to an institution, and vice versa," he said, adding that if the water index proves successful, the exchange might create other products based on it.