Investment giants are placing massive bets on a sustained rally in mining and metals, pouring money into the sector at the fastest rate seen in years, according to new data from London.
Fund managers say the surge is fueled by artificial intelligence infrastructure demands, increased defense spending, and investors moving away from overvalued technology stocks.
The numbers tell a dramatic story: Assets managed in mining exchange-traded funds skyrocketed to $87.4 billion by March 31, more than doubling from $37 billion just one year prior, according to research firm ETFGI data compiled for Reuters.
Energy, oil, gas and agriculture sectors have similarly drawn substantial investment flows, representing what analysts call one of the most dramatic shifts toward physical assets in recent memory.
During the first quarter alone, investors pumped $8.24 billion into mining investments, marking a stunning $10.8 billion reversal from the same period in 2025 when President Donald Trump’s sweeping tariff announcements sparked $2.52 billion in outflows.
BlackRock portfolio manager Evy Hambro described the trend as “the early stages of a commodity supercycle,” telling Reuters that capital is beginning to rotate from high-priced tech stocks into hard assets.
The tech sector’s struggles are evident: Morningstar’s U.S. Technology Index dropped 9% in the first quarter, while shares of mining giants BHP and Rio Tinto both reached all-time highs this year.
“The material intensity of GDP is rising,” Hambro explained, citing massive capital investments in electrical grid infrastructure, data centers, electric vehicles and charging networks.
This cycle differs significantly from China’s urbanization boom of the 2000s, Hambro noted, because current demand is “much more robust and resilient” due to global diversification across artificial intelligence, electrification and defense sectors.
However, the dramatic shift brings heightened risks of volatile price swings, as metals markets remain relatively small compared to global stocks and bonds, making them more susceptible to supply chain disruptions in mining, refining and transportation.
Fidelity’s Taosha Wang echoed the supercycle assessment, stating that a mining and energy-focused boom has already begun as the Iran conflict pushes governments to prioritize supply chain security.
Investment flows reveal a clear preference for industrial metals over traditional safe havens. Copper funds attracted $198 million in March, while gold’s recent rally gave way to profit-taking. The VanEck Gold Miners ETF alone shed $710 million last month, though it remains up nearly $1 billion year-to-date.
The gold pullback during active geopolitical tensions is particularly noteworthy, investors observe. Rather than seeking refuge in traditional safe assets, markets appear to be wagering that the Iran crisis will trigger real-economy responses, with energy security and infrastructure investments requiring copper, steel, and rare earth elements.
Oil and gas funds received nearly $6 billion in net flows during the first quarter, according to ETFGI data, reinforcing the theory that investors are positioning for infrastructure spending increases.
Some portfolio managers favor diversified mining companies like BHP and Rio Tinto, positioned to benefit from multiple demand drivers.
“Copper is very much in demand, aluminum very much in demand, even more so now, as the Iran crisis unfolds,” said Anix Vyas, portfolio manager at Harding Loevner, noting that Rio Tinto’s holdings in both metals position it to benefit from surging demand from data centers and industrial applications.
Vyas characterized the shift as investors abandoning software companies vulnerable to AI disruption in favor of companies with more sustainable competitive advantages, particularly miners controlling critical mineral resources.
The relatively modest size of metals futures markets means heavy investment inflows can amplify volatility even while broader upward trends continue.
Trading volumes for metals futures including copper and aluminum on the London Metal Exchange totaled $21 trillion last year, while CME gold futures exceeded $25 trillion. These figures pale compared to $85 trillion in Nasdaq-100 futures and over $135 trillion in S&P 500 futures.
The dramatic year-over-year swing in ETF mining flows illustrates how rapidly sentiment can change and how vulnerable these markets remain to sudden reversals.
Mining represents only a small fraction of global stock markets, with the top five mining companies comprising just 0.4% of the MSCI ACWI Index versus 16.8% for the leading five technology companies. Metals and mining products account for merely 0.57% of total equity ETF market share.
Major mining companies’ shares currently trade at 7 to 8 times EV/EBITDA, well below the 14 times multiples seen during the 2008-2010 boom, suggesting substantial upside potential if the supercycle materializes.
“Copper is at the intersection of everything and critically undersupplied. There is no doubt in my mind that copper prices could double or triple over the next decade and owning copper producers will deliver multiples of the spot price growth,” said Charlie Aitken, group investment director at Australia’s Regal Partners, which maintains overweight positions in mining and metals and managed A$21 billion ($15.05 billion) at the end of March.
While sector investments offer inflation protection, they could also accelerate price increases, potentially compounding inflation pressures from the Iran war’s impact on energy markets and posing risks to global economic growth, investors warned.
