3 Best Steel ETFs to Buy in Q4 2024
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Steel is one of the most important metals in the world today. It is used in most construction projects globally.
The industry has changed significantly in the past decades as China disrupted the sector using massive government subsidies. As a result, western companies that dominated the industry a few decades ago have become relatively smaller.
This article looks at some of the best steel ETFs to invest in. Since there is just one such ETF to invest in, we will also look at those that have iron ore mining companies since steel comes from the metal.
What are the top steel ETFs to buy?
Copy link to sectionThere 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.
| # | ETF symbol | ETF name | Learn more |
|---|---|---|---|
| 1 | SLX | VanEck Steel ETF | Learn more > |
| 2 | PICK | iShares MSCI Global Metals & Mining Producers | Learn more> |
| 3 | XME | SPDR S&P Metals & Mining ETF | Learn more > |
1. VanEck Steel ETF (SLX)
Copy link to section- Assets: $93 million
- Expense ratio: 0.56%
- Year of inception: 2006
- Average annual return since inception: 6.34%
- 30-day SEC yield: 2.75%
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.
The SLX ETF holds 27 companies in the steel industry. Most of its companies are from the United States followed by Brazil, Australia, Netherlands, and Luxembourg. In all, it has just 27 companies, which excludes the highly volatile and illiquid Chinese firms.
Therefore, if you are interested in steel ETFs, this is the best fund to allocate funds to. The key challenge is that it is a tiny fund that can be highly illiquid. It is also a fund with a higher-than-average expense ratio.
2. iShares MSCI Global Metals & Mining Producers (PICK)
Copy link to section- Assets: $1.2 billion
- Expense ratio: 0.39%
- Year of inception: 2012
- Average annual return since inception: 2.97%
- 30-day SEC yield: 2.75%
The iShares MSCI Global Metals & Mining Producers ETF is another potential steel ETF to invest in. While is not necessarily a steel fund, it is made up of the biggest mining-focused fund.
It invests in 265 companies in the industry from around the world. The biggest firms in the fund are the likes of BHP Group, Rio Tinto, Freeport McMoran, Glencore, Anglo American, and Vale.
These are some of the biggest iron ore mining companies in the world. Additionally, it has steel companies like Nucor, Steel Dynamics, Nippon Steel, Reliance Steel, Tata Steel, and US Steel among others.
As a result, the fund has a close correlation with the performance of steel and iron ore. Most importantly, it is a diversified fund that gives you exposure to other commodities like copper and gold.
3. SPDR S&P Metals & Mining ETF (XME)
Copy link to section- Assets: $2 billion
- Expense ratio: 0.39%
- Year of inception: 2006
- Average annual return since inception: 0.65%
- 30-day SEC yield: 2.75%
The SPDR S&P Metals & Mining ETF is another fund that gives you access to companies in the mining and steel sector. It tracks the S&P Metals and Mining Select Industry Index.
47% of the companies in the steel industry followed by gold, coal and consumable fuels, aluminum, and copper sectors. The biggest companies in the fund are the likes of Carpenter Technology, Alcoa, Newmont, Freeport-McMoran, ATI, and Royal Gold. Some of the top steel firms in the fund are Steel Dynamics, US Steel, and Nucor.
The benefit of investing in this fund is that it is a highly liquid, has a lower expense ratio than the VanEck Steel ETF, and is more diversified.
Where to buy the best steel ETFs
Copy link to sectionTo 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.
We found 4 online brokers for users based in
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What is a steel ETF?
Copy link to sectionIt’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?
Copy link to sectionThey 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.
Methodology: How we choose the best steel ETFs
Copy link to sectionAt Invezz, we are dedicated to helping investors make informed decisions by providing authoritative, accessible, and engaging advice and recommendations. Our curated section of the best Exchange-Traded Funds (ETFs) is carefully selected by our team of experienced market analysts and reviewed by a sub-editor. This methodology outlines the rigorous process we follow to ensure our ETF recommendations are up-to-date, reliable, and insightful.
- Analyst research & recommendations: Our seasoned market analysts use their in-depth sector knowledge to identify ETFs with strong potential, ensuring they meet high standards of performance, liquidity, and market potential.
- ETF evaluation: We evaluate ETFs based on their underlying assets, historical performance, expense ratios, and tracking accuracy, alongside macroeconomic factors and sector trends.
- Fund performance reports: We assess ETFs through the latest performance reports, analyzing key metrics like returns, volatility, expense ratios, and assets under management (AUM).
- Sector analysis and external recommendations: Our detailed sector analysis, combined with recommendations from reputable sources like Barron’s and Zacks, provides an additional layer of validation for our selections.
- Quarterly review & refresh: We update our curated ETF list quarterly, re-evaluating each ETF based on the latest reports, industry developments, and market conditions to ensure our recommendations reflect the most current information available.
More of the best ETFs
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