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. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  6. Stock ETF

    A security that tracks a particular set of equities, similar ...
Related Articles
  1. Investing

    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. Investing

    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.
  3. Investing

    Steel Prices Soaring, Led by China

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

    U.S. Raises China Steel Import Duty Sixfold (SLX)

    The U.S. said Tuesday it would raise import duties on Chinese cold-rolled steel by 522%.
  5. Investing

    AK Steel Stock Steaming Ahead of Earnings (AKS)

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

    Tata Steel to Delay Sale of UK Assets on Brexit

    Tata Steel Limited, the Indian steel giant, has halted the sale of its U.K. assets as potential buyers defer decisions post-Brexit
  7. Small Business

    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.
  8. Trading

    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.
  9. Investing

    The Top 5 Small-Cap Basic Material Stocks for 2016 (WOR, CMC)

    Find out what kind of small-cap basic material stocks may make a run in 2016 and how their different business characteristics have played into the selection.
  10. Investing

    U.S. Steel at Cusp of Multiyear Uptrend (X)

    U.S. Steel should offer an excellent buying opportunity when it pulls back into the mid-teens.
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 >>
Hot Definitions
  1. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  2. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  3. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  4. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
  5. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  6. Four Percent Rule

    A rule of thumb used to determine the amount of funds to withdraw from a retirement account each year. The four percent rule ...
Trading Center