For investors seeking momentum, VanEck Vectors Steel ETF (AX:SLX) is probably on radar now. The fund just hit a 52-week high and is up about 182.2% from its 52-week low price of $15.30/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
SLX in Focus
This product offers exposure to the overall performance of steel companies. No stock accounts for more than 12.96% of the fund. Vale SA, Rio Tinto (LON:RIO) and Arcelormittal (AS:ISPA) are top three stocks of the fund. The fund charges 55 bps in fees (see all materials ETFs here).
Why the Move?
Trump’s pledge to invest in infrastructure activities and upgrade the nation’s crumbling roads, bridges and waterways went in favor of steel prices. Also, the implementation of tariffs on steel imports in the U.S. in order to safeguard domestic companies from the adverse impact of cheap supplies from China helped the sector. If these were not enough, bets over tighter supply from China with the country taking measures to ‘cut excess steel capacity’ also pushed up prices in recent sessions.
More Gains Ahead?
It seems that SLX might continue with its strength given a positive weighted alpha of 123.40. Since a positive weighted alpha hints at more gains, there is definitely still some promise for investors who want to ride this surging ETF a little further.
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VANECK-STEEL (SLX): ETF Research Reports
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Zacks Investment Research