Seven basic materials exchange traded funds (ETFs) have been launched this year, with six of them in the last three months. This is evidence that the sector is hot. Juan Carlos Arancibia reports in Investor’s Business Daily that metals, mining and other basic materials stock remain market leaders.
streetTRACKS SPDR Metals and Mining (XME) is up 20% since the first of August. This ETF holds steel companies, such as Nucor (NUE), copper miner, Phelps Dodge (PD), material company Alcoa (AA) and energy stocks, like DuPont (DD). Energy stocks have been weaker as the price of crude oil has slid.
Other ETFs in this category include iShares Dow Jones U.S. Basic Materials (IYM) and PowerShares Dynamic Basic Materials (PYZ). While IYM top holdings include DuPont (DD), Dow Chemicals (DOW) and Alcoa (AA), PYZ includes Allegheny (ATI), Southern Copper (PCU) and Lyondell Chemical (LYO).
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.