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A dramatic rotation from expensive technology shares into hard assets is accelerating, pushing global mining exchange-traded funds to their highest asset levels in years.
According to data compiled by ETFGI for Reuters, assets under management in mining ETFs more than doubled to $87.4 billion by March 31, up from $37 billion a year earlier. The sector attracted $8.24 billion in net inflows in the first quarter alone.
The shift is being driven by a confluence of forces: massive investment in AI infrastructure, power grids, electric vehicles and charging stations, along with rising defence spending amid geopolitical tensions. All of this is fuelling demand for industrial metals like copper and aluminium.
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“We are seeing capital rotate from high-valuation tech stocks into hard assets,” Evy Hambro, a portfolio manager at BlackRock, told Reuters. He called this “the early stages of a commodity supercycle,” adding that unlike the China-driven boom of the 2000s, this cycle is “much more robust and resilient” because it is powered by global diversification across AI, electrification and defence.
The numbers back him up. The Morningstar US Technology Index fell 9% in the first quarter, while shares of BHP and Rio Tinto — the world’s two largest mining companies — both hit record highs this year.
Investors are showing a clear preference for industrial metals over traditional safe havens. Copper funds drew $198 million in March, while gold faced profit−taking. The VanEck Gold Miners ETF (GDX) alone lost $710 million last month.
Taosha Wang of Fidelity argued that a mining- and energy-focused supercycle has already arrived, pointing to the Iran war as a key catalyst. “Governments are being forced to prioritise supply security,” she said. Instead of seeking shelter in gold, markets appear to be betting that the Iran conflict will drive a real-economy response — one that requires copper, steel and rare earths for energy security and infrastructure.
Yet the mining market is relatively small, which could amplify volatility. Annual trading volume in copper and aluminium futures on the London Metal Exchange totals roughly $21 trillion, far below the $85 trillion for Nasdaq-100 futures. Heavy inflows can thus magnify price swings.
Still, valuations remain attractive. Major mining companies trade at just 7 to 8 times EV/EBITDA, well below the 14 multiples seen during the 2008-2010 boom.
“Copper is at the intersection of everything and critically undersupplied,” said Charlie Aitken, group investment director at Australia’s Regal Partners. “I have no doubt that copper prices could double or triple over the next decade.”
Risks remain. While inflows provide an inflation hedge, they could also accelerate commodity price gains, compounding inflationary pressures from the Iran war’s impact on energy markets and posing a threat to global growth. But for now, the exodus from tech stocks into mining ETFs shows no sign of slowing.
