Three Clear Plays on Water Purification

"Water, water everywhere, nor any drop to drink."

Samuel Taylor Coleridge's famous phrase describes life on the high seas 200 years ago. But it also applies to modern-day India and other places with regular shortages of water for drinking or agriculture.

Even in the U.S., a safe, reliable water supply is not a given. Many of the water-treatment plants built in the 1970s are nearing the last days of their usefulness just as contaminants in water that were unknown 30 years ago become more prevalent.

Over the past two months, three new exchange-traded funds focused on the water industry have hit the market, following on the success of the PowerShares Water Resources Portfolio(PHO Quote) 20 months ago. Water Resources, which holds only stocks that trade in the U.S., has over $2 billion in assets and is up 41% since its debut in December 2005. The fund is also fairly liquid, with average daily volume of about 683,000 shares. ...