Steel Industry ETF

DEFINITION of 'Steel Industry ETF'

A sector exchange-traded fund that invests only in companies that manufacture and market steel. The steel industry is very cyclical, as demand surges during economic boom times and plunges during recessions; this makes steel stocks and steel ETFs inherently volatile as well. With demand for steel surging in emerging economies such as India and China, a steel ETF can be viewed as a suitable way for investors to gain exposure to such markets.

BREAKING DOWN 'Steel Industry ETF'

A steel ETF is a good example of an ETF that targets a very specific market niche. There are only a few steel ETFs that trade on North American exchanges. Apart from U.S. steel companies, these ETFs also hold stocks of international steel producers.


By owning an ETF, you get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Another advantage is that the expense ratios for most ETFs are lower than those of the average mutual fund. When buying and selling ETFs, you have to pay the same commission to your broker that you'd pay on any regular order

RELATED TERMS
  1. Akio Mimura

    Served as chairman and president of Nippon Steel Corp. Mimura ...
  2. Guy Dollé

    The former chairman and CEO of steel company Arcelor from 20 ...
  3. Lakshmi Mittal

    The chairman and CEO of ArcelorMittal and one of the world's ...
  4. ETF Of ETFs

    An exchange-traded fund (ETF) that tracks other ETFs rather than ...
  5. Stock ETF

    A security that tracks a particular set of equities, similar ...
  6. Inverse ETF

    An exchange-traded fund (ETF) that is constructed by using various ...
Related Articles
  1. Markets

    How China Impacts the Global Steel Industry

    The Chinese economy is having a significant impact on the performance and profitability of steel and mining stocks.
  2. ETFs & Mutual Funds

    Are There Still More Gains For Steel Stocks Ahead?

    The steel sector has rebounded quite nicely over the last few months as investors have looked for value. Given the longer term demand picture, the value is still there and more gains could still ...
  3. Markets

    Global Steel Industry Faces “Severe Winter”

    The global steel industry is in deep crisis due to overcapacity, falling prices and rising competition that has threatened the survival of many companies.
  4. Markets

    United States Steel to Trade Ex-Dividend (X)

    Absent higher steel demand and improving commodity prices, U.S. Steel, even with its solid yield, isn't a value.
  5. Markets

    Steel Prices Soaring, Led by China

    Despite a continuous global supply glut, steel prices in China have advanced since the beginning of 2016.
  6. Markets

    AK Steel Stock Steaming Ahead of Earnings (AKS)

    AK Steel remains highly susceptible to the commodity price swings often driven by overseas manufacturers.
  7. Markets

    Commodities Outlook For The Remainder Of 2012: Base Metals

    Steel is iron alloyed with other compounds like carbon. It is the most widely produced metal in the world. This industry is dominated by China. At one time the U.S. was the top producer, but ...
  8. Markets

    Chinese Central Planners to Cut 6 Million Jobs

    China recently announced plans to lay off approximately 1.8 million workers in the coal and steel sector, but the real figure may be as high as 6 million.
  9. Markets

    Steel Stocks Poised For a Drop

    Steel stocks have triggered overbought conditions on the RSI indicator. These readings could signal a move lower in the weeks ahead.
  10. Markets

    U.S. Steel Shutters Alabama Plant (X)

    In one of the "difficult decisions" it has made in recent times, metallurgy giant United States Steel (NYSE: X) said it will close the blast furnace and some associated operations at its Fairfield ...
RELATED FAQS
  1. What was the first company with a $1 billion market cap?

    United States Steel Corportation (NYSE:X) was the world's first company to surpass the market capitalization mark of $1 billion ... Read Answer >>
  2. What are the most famous monopolies?

    Learn about famous monopolies from Carnegie Steel to Comcast that challenge free-market competition and encourage government ... Read Answer >>
  3. Why did the U.S. government take control of the steel industry in 1952?

    In early 1950, Senator McCarthy began seeing communists in every shadow, prompting him to accuse the Truman administration ... Read Answer >>
  4. Why would a multinational corporation conduct a vertical foreign direct investment?

    In many cases, multinational corporations conduct horizontal foreign direct investment (FDI) activities in order to expand ... Read Answer >>
  5. What are the most famous instances of backward integration?

    Learn more about backward integration in the supply chain and see how two famous examples, Carnegie Steel and Apple, used ... Read Answer >>
  6. Besides stocks, what other asset classes can I invest in through ETFs?

    Discover the extremely far-reaching range of investment asset classes that are available to investors through exchange-traded ... Read Answer >>
Hot Definitions
  1. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  2. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  3. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  4. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  5. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
  6. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is ...
Trading Center