All told, there are about 140 companies in this investment segment, Sheldon added.
The portfolio touches on every major sector of the economy except financials, and it focuses chiefly on companies based in the United States and Europe, although revenues can come from emerging markets.
Each of the 40 companies in the portfolio gets at least 10 percent of its revenues from water. The fund's largest holdings include U.K. wastewater company United Utilities Group Plc, Swiss pump manufacturer Sulzer AG, and Japanese turbine and compressor manufacturer Ebara Corp.
Despite the concentration on macro issues, only about 15 percent of the portfolio is directly connected to government policy or projects, Sheldon said.
The team sees little immediate impact from short-term weather such as the drought in California or record flooding in England, although these might nudge policy makers and businesses to take water matters more seriously.
"Investing in anticipation of government policy is very difficult because it always get delayed," Sheldon said.
Construction and industrial companies account for the largest section of the portfolio, or about 40 percent.
Lately, the fund has been focusing more on companies in the pipes and infrastructure business.
Sheldon and his team recently added to a position in HD Supply Holdings Inc, a $4.4 billion industrial distributor based in the United States. HD Supply gets about a quarter of its revenues from its expanding waterworks business, which provides water and sprinkler systems to residential and commercial construction sites, according to Thomson Reuters data. The company's shares, which debuted on the public markets in June of 2013, have slid 2.5 percent for the year to date.
The fund has also been adding to its position in Flowserve Corp, an $11.2 billion market-cap company that is one of the leading makers of pumps and pipes used in water treatment plants around the world. In December, the company announced it will provide all the pumps at a desalination plant in Chile that, when completed, is expected to be the largest such facility in the Western Hemisphere.
Investors who want to add water to portfolios will pay an annual expense fee of $1.85 per $100 invested, a level higher than average.