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. Retail Industry ETF

    An exchange-traded fund that invests in companies whose main ...
  2. Gaming Industry ETF

    A sector exchange-traded fund that invests solely in gaming companies, ...
  3. Exchange-Traded Fund - ETF

    A security that tracks an index, a commodity or a basket of assets ...
  4. Brazil, Russia, India And China ...

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

    The company or financial institution which creates and administers ...
  6. BRIC ETF

    An exchange-traded fund that invests in stocks and listed securities ...
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. Investing

    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 of being soft on the rampant communism spreading across the globe. When ...
  5. Chart Advisor

    Cocoa Prices Setting Up For A Move Lower

    Cocoa prices have been trending lower over the past several months and the recent bearish crossover between the 50-day and 200-day moving averages suggest that the long-term downtrend is gaining ...
  6. VelocityShares 3x Long Crude Oil ETN has the potential for huge returns, but there are several reasons why you might want to steer clear for now.
    Mutual Funds & ETFs

    A Leveraged Oil ETN For The Future (Just Not Now)

    VelocityShares 3x Long Crude Oil ETN has the potential for huge returns, but there are several reasons why you might want to steer clear for now.
  7. Latin American exchange-traded funds combined two of the hottest buzzwords of recent years: Emerging markets and low fees. Here are the biggest.
    Mutual Funds & ETFs

    Want To Invest In Latin America? Here are 22 ETFs

    Latin American exchange-traded funds combined two of the hottest buzzwords of recent years: Emerging markets and low fees. Here are the biggest.
  8. Chart Advisor

    'Tis The Season For Food And Beverage Stocks

    The holidays tend to be a gift to investors in defensive consumer stocks. Here's a food and beverage sector ETF (and its top holdings) to consider
  9. Economics

    Profiting From China's Breakout: The Right Funds

    China's prospects for growth, and for rewarding investments, can't be debated. Here are some worthwhile funds to invest in, and the smart way of doing it.
  10. Chart Advisor

    Commodities Set Up For A Continued Move Lower

    Commodities have been suffering since late summer, and unfortunately for the bulls it doesn’t appear that the situation is about to change anytime soon.

You May Also Like

Hot Definitions
  1. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  2. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  3. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  4. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  5. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
  6. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
Trading Center