Best steel ETFs to buy in 2024

By:

James Knight

James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.

Updated: Oct 11, 2022

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Steel ETFs offer an alternative to buying individual stocks by providing you with a selection of the top performing companies in the industry. In this guide our experts pick out the top steel ETFs for this year and explain where to get them.

What are the top steel ETFs to buy?

There is only one dedicated steel ETF on the market right now. You can scroll down to learn more about it and invest, or bookmark this page to get updates whenever a new one is released.

VanEck Steel ETF (NYSEARCA: SLX)

The first, and so far only, steel ETF is run by VanEck. It aims to let investors track the steel industry by owning shares in a broad representation of companies in the sector and has been available since 2006.

While the ETF does indeed own a wide range of steel companies, it is weighted heavily towards a handful; almost 50% of the fund’s money is invested in five businesses. Rio Tinto and Vale Sa are the largest of these, so SLX’s success is heavily reliant on their performance.

The fact remains, however, that it is the best way to gain exposure to the steel industry. In recent times, it’s boasted good returns as well; its share price has increased by 10% over the past five years and by more than 30% in the last 12 months.

Where to buy the best steel ETFs

To invest in an ETF you need to find an online stock broker. The process of buying shares in one is exactly the same as with an individual company and you can get started in just a few minutes by signing up with one of the brokers below.

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What is a steel ETF?

It’s a type of investment ETF that you can buy and sell shares in. An ETF, or exchange-traded fund, owns a range of different stocks and trades on a public stock market. The value of the shares fluctuates in response to the value of the companies that it owns.

A steel ETF owns shares in any company that’s involved in the steel lifecyle. That could be a company that produces it, manufactures steel products, transports them to retailers, or sells them.

Are steel ETFs a good investment?

They can be, as steel is a crucial component in many modern technologies. However, there is only one ETF available at the moment so you don’t have the luxury of choice. There are also a few potential risks that could affect stock prices in the industry.

The most pressing of those is the industry’s impact on the climate. Steel production uses a lot of energy and releases a lot of carbon dioxide, so most companies need to invest significant amounts of money into making their processes more environmentally friendly.

That will eat up some of their profits but the flip side is that investors tend to like companies that make an effort to go ‘green’. You can keep track of the industry’s progress on this front using the news links below, or sign up to a broker to invest in an ETF right away.