Our messages have been looking at the potential of water investments for over five years. Our belief is that water is an investment commodity and its value will grow.

In the U.S. alone, water demand has tripled in the past 30 years, while the population growth has been just 50%.

The 2003 Needs Assessment indicates that community water systems and not-for profit non-community water systems need $276.8 billion over the next 20 years to install, upgrade and replace infrastructure.

There are many influences that should drive growth in U.S. water companies.

First, census figures show that the American population is growing strongly.  This increases the need for new or improved water infrastructure.

Second, there is a trend toward privatization and outsourcing of government water operations. 

Third, the water industry is becoming increasingly sophisticated.

Fourth increased regulations regarding water creates opportunity in both the U.S. and abroad.

There is also growing consolidation in the water industry.

Water may be the most undervalued commodity in the market.

Plus this is a recession resistant, predictable and profitable industry. Yet which water companies should we choose?

Many investors prefer to leave the specific decisions to professionals. There are mutual funds and investment trusts that invest in water, such as the Global Water Equities Portfolio.

This is an investment trust focused on investing in the utility sector along with some foreign and small-capitalization companies, all doing business somehow related to water.

The trust is managed by Boenning & Scattergood, the oldest independent investment firm in the Philadelphia region.  This firm has been in business for over 90 years and has developed a particular expertise and knowledge of the water industry, including water utilities, filtration, equipment, chemical and engineering companies.

Boenning & Scattergood select the securities and provide ongoing support relating to the U.S. Water Equities Portfolio, looks for businesses that intend to operate in a socially and environmentally correct way. They search for those that earn primary revenues and growth from some aspect of the domestic potable water industry, including: water supply, pumps and pipes, machinery and equipment, filtration and purification, compliance and testing, utilities, metering and distribution, construction and engineering, wastewater treatment and recycling.

Recent portfolio holdings include:

CONSUMER DISCRETIONARY    3.00% of Portfolio
POOL SCP Pool Corporation

H E A LT H C A R E 1                 .9 5 %
Millipore Corporation

I N D U S T R I A L S               66.0 3 %
3M Company
A.O. Smith Corporation
Danaher Corporation
ESCO Technologies Incorporated
Flowserve Corporation
Franklin Electric Company Incorporated
General Electric Company
IDEX Corporation
ITT Industries Incorporated
Lamson & Sessions Company
Layne Christensen Company
Lindsay Manufacturing Company
Mueller Industries Incorporated
Pall Corporation
Pentair Incorporated
Pico Holdings Incorporated
Roper Industries Incorporated
URS Corporation
Watts Water Technologies Incorporated

MAT E R IAL S                             9.97%
Arch Chemicals Incorporated
Calgon Carbon Corporation
NLC Nalco Holding Company

U T I L I T I E S                         1 9.0 5 %
American States Water Company
Aqua America Incorporated
California Water Service Group
Middlesex Water Company
SJW Corporation
Southwest Water Company

This trust is offered by Claymore Securities, Inc. www.claymore.com

The code for this trust is CGWEAX.

Investors who want a broad spectrum of water investments should investigate trusts such as this.

Until next message, good global investing!

Gary

We have plenty of water here in the sacred province of Imbabura which along with the equatorial sun ripens rich crops for the market that sits just down the street. The water is pure as well. We drink the water here right from the tap! Come join us!