How to Invest in the Janney Water Index
The Janney Water Index tracks 60 commonly traded stocks of the most significant companies in the water industry. This index represents the collective performance of the water industry, from utilities to ancillary manufacturers such as pump suppliers, allowing investment tied to the fortunes of the sector. The Janney Water Index is traded indirectly through exchange-traded funds, or ETFs.
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Instructions
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Open a trading account with a stockbroker to allow access to exchange-traded funds. You will almost always be required to submit identification to your broker, and it might take several working days to process before you can execute your first trade.
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Find an ETF which tracks the Janney Water Index. By buying into a tracking ETF, you can invest in the future of the index in a tax-efficient, manageable way.
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Read the ETF prospectus of your chosen funds, to get a better idea of the makeup of their portfolio and how they operate. Every ETF is required to publish a prospectus detailing past index performance, fund and promoter information, and a description of how the fund will invest.
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Choose an ETF to invest in, on the strength of its prospectus, and decide on a suitable transaction size relative to your total portfolio. In the interests of diversification, it is recommended to expose no more than 15 percent of your portfolio to one market sector or fund.
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Execute your order for the desired quantity of units in the ETF through your stockbroker, factoring in the costs of commission on your transaction.
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Tips & Warnings
Read as many prospectuses for as many funds as you can before settling on a particular ETF.
Remember to cost trading expenses and commission into your yield calculations before investing.
Always read prospectus disclaimers in full to ensure you have a comprehensive understanding of the risks involved in a particular fund.
Ensure that you are never too heavily exposed to any one fund or industry, and diversify your capital to minimize risk.
