Note: This is an excerpt from the Fund Balance 2013 Review 2014 Outlook.

Section VI: Protecting Our Vital Resource — Water Resource Management: Fund Balance Coverage In 2014

Fund Balance now covers water management and services firms with our Water, Water, Everywhere proprietary ETF.

A world population on track to surpass to 8 billion by 2030 fixes global demand for fresh water as a tremendous challenge. Factoring in climate change, aging infrastructure and contamination issues yields projections for a 40% rise in water demand by 2030 hardly seem a stretch. With 71% of all water withdrawal used for agriculture, potential shortages and mismanagement would result in acute impairment of food production and trade.

The growing strain of our shared fresh and saltwater resources is clearly making its way into the public consciousness. Household consumer brand Brita points out in recent advertisements that using its products dramatically reduces the number of plastic bottles than end up in the ocean and fresh watersheds. A key point since such low rate of plastic are ever reused or recycled, rather they end up disrupting the foundations of the global food web.

Sustainable and integrated management methods will be needed to balance those of  private interests that own the rights to water resources and stewards publicly held natural capital resources, which are themselves vital to the common future for private interests as well. In addition, developers of waste-reducing irrigation systems, as well as creators of more potable water such as sea-water desalination technologies, will require thoughtful capital sourcing and

deployment in order to scale up. Here, as in the renewable energy efforts, fossil fuel extraction zones and their attached ambient toxification of fresh water sources further indicate growing conflict between dirty energy and the essential component of all life and thus economic activity.

The two dominant economic/ecologic complexes in the U.S, Texas and California, while states like Georgia are in conflict for resources with neighbors both due to issues of drought and water rights. The world’s largest soon to be consumer/producer, China, struggles with drought and flooding. Another key linkage between the water resources industry and energy is that by 2035, the International Energy agency predicts that global electricity generating capacity will reach 9,481 GW to meet accelerating demand.  There will thus be huge opportunities and requirements in integrating sustainability with water management and wastewater treatment.

In 2014 Fund Balance will cover and track the following group of firms:

1. Consolidated Water Co. Ltd. —  develops and operates seawater desalination and water distribution systems
2. Ecolab — manufactures and distributes cleaning and sanitizing products, and provides pest elimination services
3. Energy Recovery Inc. — Energy Recovery develops and manufactures energy efficient recovery devices and pumps used in desalination plants
4. Watts Water Technologies — designs and manufactures water control, conservation, and quality checking systems
5. Parker Haneffin — Parker has long recognized the connection between the health of our company and economic, environmental and social factors.
6. Siemens — Sustainability commands an established basis in their business culture and planning and is a key pillar of its corporate culture.
7. Xylem designs, manufactures and markets applications for water and wastewater management and recycling

We will work to understand and show our partners where the biggest opportunities are in water and wastewater treatment and provide clarity on regulatory variables and higher reuse targets, and power plant operators in the key markets. These are fast growing markets with distinct treatment solutions geographical requirements/microflucuations, market drivers, and technology trends, so you can pinpoint the regions with the best prospects for your business. As such they are significant opportunities for application of integrated management, sustainable financing, natural capital stewardship.