Steel ETF Shows Its Strength
December 12th at 11:00am by Tom Lydon
Which exchange traded fund (ETF) is the top performer year to date?
Go on…guess. Give up? It’s Van Eck Market Vectors Steel (SLX), which is up 84.5%. After the Federal Reserve’s rate cut on Tuesday, the fund and steel overall took a bit of a dip, but SLX is still holding tight to the top position.
The steel sector has a vested interest in the rate cut, since demand for industrial metals is tightly tied into infrastructure development and manufacturing, reports Associated Press. The better the economy, the more stuff gets built. And that’s not just on our own turf — the booming economies of China and India will likely increase steel demand in the coming years.
The mining group Rio Tinto (RTP) is one of the largest holdings in SLX at 12.7%. The company has been in BHP Billiton’s (BBL) sights for a takeover, but so far, they’ve only been presented with a proposal. According to Shu-Ching Jean Chen of Forbes, Rio Tinto has filed a request with the Australian Securities Exchange that BHP Billiton either make a formal offer or leave the company alone for six months.
