A Solid Steel ETF

The announcement of the alliance came after Rio Tinto shuttered its $19.5 billion alliance with Aluminum Corp. of China(ACH) or Chinalco. The failed Chinalco/Rio Tinto deal is a timely illustration of the obstacles faced by resource-hungry countries seeking to reduce import costs in commodities markets dominated by big players. Along with BHP and Brazil's Cia. Vale do Rio Doce, RTP controls about 70% of the market for iron ore exports. An investment in any single commodity fund, such as SLX, is volatile and should only be a piece of a well-diversified investment picture. When it comes to individual commodity funds, however, SLX is as good as it gets.

While SLX is a focused-sector fund, it is far more liquid than many of the other single commodity ETFs, like iPath's Nickel(JJN) or Lead(LD) products. With a three-month average daily trading volume of more than 400,000 shares, interested investors can participate in the steel rally and maneuver in and out of SLX with relative ease despite the concentrated and focused nature of sub-sector fund.

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