U.s. Water Bills Surge 62% In A Decade: Etfs Positioned To Benefit

American households are paying 62% more for drinking water than they did a decade ago — a surge that has outpaced overall inflation, grocery prices and even household income growth. According to a new Food & Water Watch study (as cited in The Guardian) analyzing billing data from the 500 largest community water systems serving 45% of the U.S. population, the average household paid $531 in 2025 for 60,000 gallons of water. 

The factors driving this hike, including aging water lines, lead pipe replacement, PFAS “forever chemical” remediation, and climate-related infrastructure costs, are structural and unlikely to reverse. Meanwhile, the federal Bipartisan Infrastructure Law’s water funding expired last month, shifting more of the burden onto ratepayers and private capital. 

For investors, this creates a compelling but nuanced opportunity. 

Regulated utilities can pass infrastructure costs onto customers through approved rate increases, providing predictable revenue visibility. Water technology and treatment companies benefit as municipalities and utilities invest in efficiency, monitoring and purification. However, not all water stocks are equally positioned. Companies with heavy exposure to rate-regulated water utilities and infrastructure replacement stand to benefit most directly from sustained bill increases.

This puts the spotlight on exchange-traded funds (ETFs) that offer direct exposure to a handful of the companies mentioned above, while cushioning a portfolio from the idiosyncratic risk of single-stock investing. But before we explore those funds, it's crucial to identify the companies — and by extension the particular ETFs — that remain positioned to benefit the most from the current scenario.

Stocks Set to Benefit From Rising Water Bill

The stocks most directly capitalizing on rising water bills are those providing the infrastructure, technology, and regulated services that utilities must deploy. 

For instance, American Water Works AWK, the largest publicly traded U.S. water utility, has secured $216 million in additional annualized revenues in the first half of 2026, including $68 million from New Jersey rates alone to fund $1.4 billion in system upgrades. These approved revenue increases come directly from approved consumer utility bill and rate hikes.

American Water plans to invest roughly $3.7 billion in 2026 alone and $19-$20 billion through 2030 to replace aging 20th-century pipe networks and meet stricter federal environmental mandates. These multi-billion-dollar buildouts are routinely passed down to households via general rate cases and infrastructure surcharges, which, in turn, pump up their water bills. 

Similarly, Xylem XYL, which supplies water technology and services essential for infrastructure modernization, benefits indirectly from rising U.S. water bills, driven by the broader need to modernize aging infrastructure, manage water scarcity, and meet stricter treatment requirements. The company’s Water Solutions and Services segment saw orders jump 147% organically to $1.45 billion in second-quarter 2026, anchored by a record $850 million, 23-year outsourced water contract. 

On the other hand, Ecolab ECL, which provides water treatment solutions for industrial and municipal clients, also benefits from rising water bills. As municipal water prices outpace inflation, companies cannot afford to waste water, and Ecolab is hired to optimize, recycle, and reduce water consumption across several high-growth, water-intensive sectors. 

Water ETFs in the Spotlight

Against the current backdrop, ETFs with concentrated exposure to regulated water utilities and pure-play infrastructure companies are best positioned. 

Utility-heavy funds capture the direct revenue benefit of approved rate increases, while diversified water funds that include industrial technology names benefit from the capital spending wave. In particular, water ETFs with a majority of exposure to U.S.-listed companies should benefit from rising water bills. 

Therefore, the following water ETFs should benefit the most from the rising water bills:

Invesco Water Resources ETF PHO

This fund, with a market value of $1.89 billion, provides exposure to 41 companies that create products designed to conserve and purify water for homes, businesses and industries. Ferguson Enterprises holds the first spot in this fund, with an 8.21% weight. 

ECL holds the second position with an 8.18% weight, while AWK holds the 10th spot with a 3.81% weight. PHO charges 59 basis points (bps) in fees. Geographically, the United States holds 57.6% of this fund’s assets.

First Trust Water ETF FIW

This fund, with net assets worth $1.71 billion, provides exposure to 36 U.S.-listed companies that derive a substantial portion of their revenues from the potable and wastewater industry. Agilent Technologies holds the first spot in this fund, with a 4.56% weight, while ECL holds the fourth position with a 4.10% weight. 

XYL holds the sixth position with a 3.93% weight, while AWK holds the eighth spot with a 3.83% weight. FIW charges 50 bps in fees. 

Global X Clean Water ETF AQWA

This fund, with net assets worth $20.2 million, includes 40 companies advancing the provision of clean water through industrial water treatment, storage and distribution infrastructure, as well as purification and efficiency strategies, among other activities. AWK holds the first spot in this fund, with an 8.20% weight, while XYL holds the third position with a 7.46% weight. 

AQWA charges 50 bps in fees. Geographically, the United States holds 67.7% of this fund’s assets.

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This article originally published on Zacks Investment Research (zacks.com).

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