And humans use a lot of water. The typical US household uses 100 gallons of water per day. It takes 3,000 gallons to produce one pair of blue jeans and 1,900 gallons to produce a pound of beef. Thousands of gallons of water are required to create a silicon wafer, millions of which are produced daily across the globe. US power plants use 136 billion gallons of water each day.

With the global population soon to reach 7 billion, ensuring supplies of clean water is a pressing concern. The United Nations (UN) estimates that half the world’s population will experience water shortages by 2040.

Continued industrialization in developing economies will exert enormous pressure on already-strained water supplies. Consider the recent history: The global population increased fourfold during the 20th century, but industrial demand boosted fresh water consumption by 900 percent during the same period. The UN’s 2009 World Water Development Report found that water scarcity has already curtailed economic growth in areas as far flung as California, Australia, China and Indonesia.  

Water scarcity could also drastically change our eating habits. Water is the single most important agricultural input, accounting for about 70 percent of global water consumption. It is estimated that by 2030 water scarcity could reduce global harvests by as much as one third.

The problem has become particularly acute in China, where an estimated 60 percent of the nation’s 670 largest cities are already coping with water shortages. The Yellow River–a critical water source for the nation–currently has only 10 percent of its natural flow, and in some years the river fails to even reach the ocean. Meanwhile, Himalayan glaciers that supply water to more than 2 million Asians are melting at a rapid rate, endangering yet another vital water source.

More troubling, though, is that much of the available drinking water isn’t safe for consumption. In developing countries–where 90 percent of sewage and 70 percent of industrial waste are discharged directly into waterways–almost 80 percent of illnesses are related to poor water and sanitation.

Given the dire nature of the situation, expect a drastic increase in infrastructure spending in upcoming years, with an emphasis on water-related projects.

The US spends 2 percent of gross domestic product (GDP) on infrastructure construction, Europe spends 5 percent of GDP and China spends 9 percent of GDP. Over the next 20 years, that percentage is expected to rise to the low teens, with China alone forecast to spend hundreds of billions of dollars annually. More than $150 billion of that spending will be devoted to water.

PowerShares Water Resources (NYSE: PHO) holds a portfolio of 32 companies that manufacture pipes, pumps and other water infrastructure equipment, as well as water utilities and treatment outfits. The fund’s top five holdings are AECOM Technology (NYSE: ACM), an engineering and construction outfit; water-issue consultancy Tetra Tech (NSDQ: TTEK); Lindsay Manufacturing (NYSE: LNN), which produces and sells irrigation equipment; Veolia Environment (NYSE: VE), the world’s largest publicly traded water company; and Itron (NSDQ: ITI), which develops and sells smart meters.

The fund charges a reasonable annual expense ratio of 0.64 percent and yields a slight 0.5 percent. One potential drawback: A large portion of the fund’s holdings are engaged in non-water related businesses, which means the fund is hardly a perfect proxy for water. Still, the overall portfolio will benefit from the global build out of water-related infrastructure.

PowerShares Water Resources is the newest addition to the Growth Portfolio and rates a buy up to 25.