For a long time, highly valued technology and software stocks dominated portfolios. But now a massive shift in sentiment is taking place: With the highest momentum in years, “smart money” is massively reallocating to real assets – catapulting the mining and metals sector back onto the shopping lists of major investors. The drivers of this massive capital rotation are the global expansion of AI infrastructure, exploding defense spending, and the urgent need for secure energy and raw material supply chains. Mining stocks thus serve several of these structural megatrends simultaneously – an exceptionally strong starting position for investors.
Current data from ETFGI, analyzed for Reuters, shows the enormous shift in these weights: Within one year, assets under management in mining ETFs have more than doubled – from $37 billion to $87.4 billion as of March 31. The first quarter alone saw inflows of $8.24 billion. This marks a dramatic shift in sentiment of $10.8 billion compared to the first quarter of 2025, when concerns about US tariffs had led to outflows of $2.52 billion.
AI, Defense, and Grid Expansion: The New Material Intensity
Unlike the commodity boom of the 2000s, which was dominated by China, the current surge is based on a significantly broader, global foundation. Asset managers see an insatiable hunger for metals for grid infrastructure, data centers, electric vehicles, and charging infrastructure. In parallel, the defense sector is driving up demand for strategic metals.
The global economy is becoming more material-intensive again. Fund managers are already speaking of the harbingers of a new commodity supercycle. Capital is deliberately flowing from the highly valued tech sector – whose business models are partly threatened by AI themselves – into companies that have absolute control over scarce and critical physical raw materials.
Industrial Metals Outperform Gold (for now)
The investors’ preference is striking: The big money is currently flowing primarily into real industrial demand and less into classic crisis protection. For example, copper funds recorded inflows of $198 million in March, while profits were taken in gold mining stocks. The VanEck Gold Miners ETF (GDX) lost $710 million in March (but is still up almost $1 billion year-to-date).
This trend reflects a strategic positioning: Instead of resorting to traditional safe havens, market participants are reacting to geopolitical tensions (such as the Iran conflict) with investments in energy, infrastructure, and strategic supply chains. The clear beneficiaries are copper, steel, and rare earths. Net inflows of almost $6 billion into oil and gas funds in the first quarter underscore that the market is betting on long-term physical capacity expansion, not just short-term price spikes.
Small Sector, Enormous Leverage
The massive flight of capital into real assets offers enormous opportunities but also a high risk of volatility. This is because the mining and metals sector is tiny compared to the rest of the stock market. The consequence: Even moderate capital inflows can trigger massive price explosions.
A look at the proportions illustrates this:
- The five largest mining companies account for only 0.4% of the MSCI ACWI Index (the top 5 tech companies are at 16.8%).
- Products from the metals and mining sector make up only 0.57% of the total equity ETF market.
- In 2025, the trading volume of metal futures (such as copper/aluminum) on the LME was $21 trillion, and for gold futures (CME) over $25 trillion. This compared to $85 trillion in the Nasdaq-100 futures market and over $135 trillion in S&P 500 futures.
This narrowness of the market means that sentiment can turn extremely quickly and violently – exacerbated by global bottlenecks in extraction, refining, and transport.
Valuations Leave Room for Imagination
Despite the recent price rallies, the sector is still historically undervalued. According to Reuters, large mining companies are currently trading at 7 to 8 times enterprise value to EBITDA. For context: During the boom from 2008 to 2010, these multipliers were around 14. So, the market is still far from euphoria.
Copper, in particular, stands out as a “perfect storm” because it combines demand trends (power grids, data centers, e-mobility) with a notoriously scarce supply. Investors agree: The mining and metals sector is back as a structural investment theme. However, investors must be aware that this massive capital inflow into real assets can itself have an inflationary effect (especially in strained energy markets) and that the investment profile is characterized by enormous upside potential, but also high volatility.
