Steel Yourself: The Mining ETF That’s Built for an Industrial Comeback
Most investors buy gold miners to hedge inflation. But this ETF leans heavy into steel—and that might be exactly what your portfolio needs.
Most investors hear “mining ETF” and think “gold.” They picture bullion-backed returns, safe-haven trades, and a bet against central banks.
But XME, the SPDR S&P Metals & Mining ETF, isn’t built for gold bugs. It’s built for builders.
While funds like GDX are stacked with precious metal miners, XME is dominated by companies that dig up the raw materials of industrial growth—steel, aluminum, coal. It’s less a hedge against monetary chaos and more a high-beta wager on America’s return to a hard-hat economy.
And that wager is looking more realistic by the week.
The Mining ETF That Doesn’t Care About Gold
Most mining funds concentrate on gold or copper. Not this one.
XME is equal-weighted, meaning smaller producers get just as much attention as the giants. That spreads the risk and gives you broader exposure to the underlying sector—not just a few mega caps.
But what really sets XME apart is its exposure to steel, which accounts for about 40% of the fund. Major holdings include Nucor, Cleveland-Cliffs, and Steel Dynamics, with coal and aluminum names filling out the roster. Gold miners are in the mix, but they’re background noise.
This is an ETF built for rising demand, not collapsing currencies.
Trump’s Tariffs Have Landed. XME Is Built for This Moment.
Since returning to the White House, President Trump has moved fast on trade—and tariffs are front and center once again.
His administration has already begun implementing a universal baseline tariff on imports, and that’s a tailwind for domestic metals producers. U.S. steel and aluminum companies, long battered by global oversupply and cheap Chinese exports, suddenly have pricing power again.
On top of that, the long-promised “Big Beautiful Infrastructure Bill” has finally passed, and it's massive: hundreds of billions in spending on bridges, roads, energy grids, and domestic manufacturing.
That’s rocket fuel for commodities like steel and aluminum.
When government spending targets the real economy, companies that extract and refine basic materials tend to win. And that’s exactly what XME owns.
Falling Rates, Rising Demand
There’s another key ingredient in this setup: interest rates.
The Federal Reserve has already begun cutting rates after inflation cooled earlier this year. That creates a tailwind for capital-intensive sectors like mining, which typically get squeezed when borrowing costs rise.
But here’s the twist: If fiscal stimulus keeps coming, inflation could resurge, even as rates fall. That would recreate a rare and powerful environment—strong nominal growth with rising input prices—the kind that benefits hard-asset producers more than software stocks.
In short: XME is no longer just a cyclical bet. It’s potentially a structural beneficiary of the new political and economic order.
A Portfolio Diversifier You Might Actually Want
Canadian investors are notoriously overweight in banks, energy, and U.S. tech. And most of the so-called inflation hedges—gold, TIPS, real estate—haven’t exactly delivered consistently.
XME offers something different:
Exposure to rising input prices without buying futures contracts
Industrial leverage in an era of government-driven demand
A potential beneficiary of onshoring, protectionism, and deglobalization
It won’t deliver in every market environment, and it’s not a low-volatility play. But as a tactical sleeve in a diversified portfolio, XME can play an important role—especially when the narrative shifts from tightening to building.
Bottom Line
Most investors are still thinking like it’s 2012—hedging deflation, hiding in growth stocks, ignoring commodities.
But the world has changed. Government is back. Trade wars are real. Industrial policy is alive and well.
And if the next decade belongs to builders, XME is quietly one of the most relevant ETFs on the market.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Investors should conduct their own due diligence and consult with a financial advisor before making investment decisions.