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. Guy Dollé

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

    Lakshmi Mittal serves as the chairman and CEO of ArcelorMittal; ...
  3. Section 232 of the Trade Expansion ...

    Section 232 of the Trade Expansion Act of 1962, authorizes the ...
  4. Exchange-Traded Fund (ETF)

    An exchange-traded fund (ETF) is a security that tracks an index, ...
  5. ETF of ETFs

    An ETF of ETFs is an exchange-traded fund (ETF) that tracks other ...
  6. Index ETF

    Index ETFs are exchange-traded funds that seek to track a benchmark ...
Related Articles
  1. Insights

    United States Steel Upgraded By JPMorgan (X)

    Shares of U.S. Steel climbed as much as 4.22% Monday, reaching a session high of $19.75 after the company's shares were endorsed by analysts at JPMorgan.
  2. Investing

    Top 4 Steel Stocks for 2018

    Trump's plan to impose tariffs on steel imports and use U.S. steel for all new pipelines and pipeline repairs, positions these four steel stocks for gains.
  3. Investing

    Trump's Wall Could Be Great News for Steel Stocks

    So Trump signed the order for the Wall. Some industries stand to gain. A lot.
  4. Investing

    Can U.S. Steel Stock Really Climb 50% in One Year? (X)

    United States Steel comes highly recommended for risk-tolerant investors, according to Barron's.
  5. Investing

    Why AK Steel Stock Surged 32% Last Week (AKS, SLX)

    Steel manufacturers posted strong gains last week in the wake of Donald Trump's surprise victory for the White House.
  6. Investing

    Steel Cycle Looks Good

    Buying cyclical stocks at the right time can be a great investment strategy, but it requires more than just trying to time a cycle to benefit.
  7. 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%.
  8. Insights

    Is Now the Time to Buy Steel Dynamics? (STLD)

    After 15% declines over the past three months, it certainly seems as if the risk-versus-reward profile of Steel Dynamics has drastically improved.
  9. Investing

    U.S. Steel Earnings Coming Up, What to Expect (X)

    U.S. Steel comes highly recommended, according to Barron's, which expects the stock to reach $37 per share in 12 months.
  10. Investing

    Steel Prices Soaring, Led by China

    Despite a continuous global supply glut, steel prices in China have advanced since the beginning of 2016.
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 Answer >>
  2. 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. Capital Asset Pricing Model - CAPM

    Capital Asset Pricing Model (CAPM) is a model that describes the relationship between risk and expected return and that is ...
  2. Return On Equity - ROE

    The profitability returned in direct relation to shareholders' investments is called the return on equity.
  3. Working Capital

    Working capital, also known as net working capital is a measure of a company's liquidity and operational efficiency.
  4. Bond

    A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows ...
  5. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  6. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
Trading Center