The materials sector has been a solid performer this year, benefiting from its status as a value group and late-cycle destination. That much is highlighted by a 7.2% year-to-date gain for the Materials Select Sector SPDR (NYSEArca: XLB).

However, the mantle of materials sector leadership has been passed from the biggest materials stocks and broader exchange traded funds like XLB to more focused offerings. Over the past month, the SPDR Metals & Mining ETF (NYSEArca: XME) is up 3.6% compared to an almost 1% loss for XLB. XME was one of just nine ETFs to hit a new 52-week high Monday.

The $555 million XME is getting help from multiple sources, including steel stocks, a group that has notched an epic rally since early June. Just look at U.S. Steel (NYSE: X). Shares of the largest U.S. steelmaker are up almost 29% in the past month and have surged throughout August after the company gave bullish guidance. Cowen & Co. and Deutsche Bank have price targets on U.S. Steel of $42 and $40, respectively. The stock closed at $35.54 on Monday.

That is good news for XME, which allocates 41.3% of its weight to steelmakers, more than two and a half times the ETF’s next largest industry weight (16.6% to diversified metals and mining). [Don’t Forget These Mining ETFs]

XME’s top-four holdings are steel stocks. Highlighting just how strong steel stocks have been in recently, Steel Dynamics (NasdaqGS: STLD) is the worst performer of that quartet over the past month with a gain of nearly 19%. Still, U.S. Steel remains the marquee name in the industry and that should serve XME just fine as Wall Street is heaping praise on the company’s cost-cutting efforts. U.S. Steel is realizing $465 million a year in savings and its cash on hand more than doubled to $1.5 billion at the end of the most recent quarter from $600 million at the start of 2014.

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