Steel Industry ETF

AAA

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.

INVESTOPEDIA EXPLAINS '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. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. Gaming Industry ETF

    A sector exchange-traded fund that invests solely in gaming companies, ...
  3. Retail Industry ETF

    An exchange-traded fund that invests in companies whose main ...
  4. Brazil, Russia, India And China ...

    An acronym for the economies of Brazil, Russia, India and China ...
  5. BRIC ETF

    An exchange-traded fund that invests in stocks and listed securities ...
  6. ETF Sponsor

    The company or financial institution which creates and administers ...
RELATED FAQS
  1. 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 Full Answer >>
  2. What is the automotive sector?

    In the world of finance, the automotive sector represents the financial performance and economic variables related to automobile ... Read Full Answer >>
  3. What is the best way to get exposure to electric cars when investing in the automotive ...

    Investors interested in electric cars have a variety of options. Automakers such as Tesla Motors exclusively manufacture ... Read Full Answer >>
  4. Where can I buy covered call ETFs (exchange-traded funds)?

    Covered calls can be traded through any major retail broker. Investors need to have their brokerage accounts approved for ... Read Full Answer >>
  5. Is there an index for tracking mid-cap stocks?

    There are several indexes for tracking mid-cap stocks. The most widely referenced is the S&P Mid-Cap 400, but others ... Read Full Answer >>
  6. What are the most common ETFs that track the automotive sector?

    The most frequently traded exchange-traded fund (ETF), The First Trust Nasdaq Global Auto (CARZ), is an index of automotive ... Read Full Answer >>
Related Articles
  1. Mutual Funds & ETFs

    Spread Out Risk With Sector-Based ETFs

    These ETFs take the sector rotation strategy from institutional investors and puts it in your hands.
  2. Mutual Funds & ETFs

    An Introduction To Sector ETFs

    Find out how these specialized ETFs can give your portfolio the punch it needs.
  3. Entrepreneurship

    The Giants Of Finance: Andrew Carnegie

    Though not as well-remembered as some of his contemporaries, Andrew Carnegie's legacy is strong and moralistic.
  4. Mutual Funds & ETFs

    U.S. Investors Are Seeking Opportunities Overseas

    A latest analysis leads to believe that many investors are applying a spring cleaning approach to their portfolios, rebalancing as the 1st quarter ended.
  5. Options & Futures

    Key Factors Of The Russell 2000 Index

    The Russell 2000 index represents the small cap universe, with a broad selection of fast growth companies at the bottom end of the capitalization spectrum.
  6. Chart Advisor

    Interested in Growth Stocks? See These 4 ETFs

    Given the rise in popularity of growth ETFs, there are several interesting growth stock choices for investors.
  7. Chart Advisor

    ChartAdvisor for April 17 2015

    A weekly technical summary of the major U.S. indexes.
  8. Mutual Funds & ETFs

    Pros & Cons Of Bond Funds Vs. Bond ETFs

    Understanding the pros and cons of bond funds and bond ETFs will help you choose the instrument that is best for building your diversified bond portfolio.
  9. Mutual Funds & ETFs

    6 ETFs to Fight Your Recession Jitters

    Are you worried about a recession? If so, consider these 6 ETFs.
  10. Mutual Funds & ETFs

    The UNG Natural Gas ETF: Best Bet or Stay Clear?

    UNG is a popular natural gas ETF, but if you're going to get involved, then you need to know the risks.

You May Also Like

Hot Definitions
  1. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  2. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  3. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  4. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  5. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
  6. Tangible Net Worth

    A measure of the physical worth of a company, which does not include any value derived from intangible assets such as copyrights, ...
Trading Center