Abstract: The present invention is an aqueous coating composition and method of preparing same that uses certain polyoxyalkylene phosphate surfactants to increase the compatibility of inorganic pigments such as TiO2 with latex polymer binders to reduce the clustering of the inorganic pigment particles in the aqueous coating composition. The aqueous coating composition of the invention includes at least one polyoxyalkylene phosphate surfactant having the following structure: wherein m is 1 or 2, n is an integer from 1 to 100, R1 is C1-C5 alkyl, O—R2 is an alkylphenol residue wherein R2 has the structure C6H4—CpH2p+1 or O—R2 is a linear or branched alkyl alcohol residue wherein R2 has the structure CpH2p+1, and p is an integer from 1 to 30. The aqueous composition further includes at least one latex polymer, at least one inorganic pigment and water.