What this ETF is trying to do

The VANECK STEEL ETF (ticker: SLX) is an exchange-traded fund designed to track the steel industry. It provides investors with exposure to companies involved in the production and management of steel.

What the numbers show

The current price of SLX is $103.10. Looking at historical performance, the fund has seen significant growth:

• Year-to-Date (YTD) Price Return: The share price has increased by approximately 21.49% so far this year.

• One-Year Price Return: The share price rose by approximately 43.55% over the last year.

• Three-Year Price Return: The share price has grown by approximately 63.26% over the last three years.

It is important to distinguish between price return and total return. Price return only tracks the change in the share price. Total return includes both the price change and any distributions (cash payments) made to investors.

For SLX, the total returns are higher than the price returns because they include those distributions:

• One-Year Total Return: Approximately 45.78%.

• Three-Year Total Return: Approximately 76.56%.

• Five-Year Total Return: Approximately 121.66%.

An estimated price from roughly one year ago was $71.82.

Income and distribution explanation

SLX provides cash distributions to investors, which currently sit at a distribution yield of approximately 1.28%. The trailing distributions are $1.32.

The distribution frequency is described as "irregular or less frequent," with only one payout recorded in the last 12 months. While distributions provide cash income, they are not a guarantee of future payments or the preservation of your initial investment.

NAV erosion explanation

"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

However, regarding price erosion (the decline in the market price of the shares), the fund shows a strong profile. The erosion score is 100, which is labeled as "No price erosion detected," and the erosion severity is rated as "good." There is no severe erosion-risk flag for this ETF.

Top Holdings

The following are the top holdings in the SLX portfolio (note that this is a partial list):

• BHP GROUP LTD ADR: 7.25%

• RIO TINTO PLC ADR: 7.06%

• VALE SA ADR: 6.72%

• NUCOR CORP: 6.53%

• ARCELORMITTAL SA DEPOSITORY RECEIPT: 5.41%

• STEEL DYNAMICS INC: 5.19%

• RELIANCE INC: 4.92%

• RIO TINTO LTD: 4.76%

• NIPPON STEEL CORP: 4.49%

• POSCO HOLDINGS INC ADR: 4.47%

Holdings can change over time.

Pros

• Strong historical price and total returns over the one, three, and five-year periods.

• No detected price erosion according to the current erosion score.

Cons

• The distribution frequency is irregular and less frequent.

• The fund's performance is tied to the steel industry.

Beginner takeaway

SLX is an ETF focused on the steel sector. While it offers a distribution yield, its recent history has been defined by significant share-price growth. Investors should remember that price returns and total returns are different, and high yields in the future are never guaranteed.