Powering transition: critical minerals are central to the next era

16 Apr 2026 - abrdn

Investors are adding diverse exposure across the minerals ecosystem. Find out how and why. (4-minute read)

16 Apr 2026 - Powering transition: critical minerals are central to the next era

By: abrdn

Powering transition: critical minerals are central to the next era

abrdn

March 2026

(4-minute read)

Global energy consumption is accelerating. It's being driven by power-hungry artificial intelligence (AI) development, the rise of robotics and automation, and the electrification of transport and industry.

At the same time, the energy transition is intensifying investment in renewable power, alongside the need for significant grid building and modernisation.

These trends are highly dependent on a relatively small group of minerals -- including copper, aluminium and rare earth elements -- which are essential for electric vehicles, batteries, semiconductors and renewable infrastructure.

Demand for these critical materials is rising, while supply remains constrained...

Demand for these critical materials is rising, while supply remains constrained because of long project lead times and limited new capacity. This imbalance may provide sustained pricing support and attractive long-term investment opportunities.

Our Future Minerals strategy invests in global companies that are positioned at the forefront of this transition -- both within the extraction industry and across the wider minerals value chain.

What differentiates our Future Minerals approach?

A key differentiator of our strategy is our quality-led, ESG (environmental, social and governance)-integrated approach. From an initial universe of around 1,500 companies, inclusion requires at least 20% revenue exposure to the future minerals theme, alongside robust quality and ESG credentials.

Companies must pass ESG screens, with a preference for strong governance, environmental practices and risk management. This helps to mitigate tail risks in a complex and often volatile sector.

The portfolio invests across four core areas:

Mineral extraction and processing (over 60%)
Upstream and downstream value-chain exposure (15-30%)
Compounds and advanced materials (5-15%)
Recycling and sustainability solutions (5-10%)

This structure provides diversified exposure across the full minerals ecosystem, rather than reliance on pure-play miners alone.

Opportunities

In a concentrated global-equity market, the portfolio offers diversification through low US exposure and minimal exposure to technology -- two areas that dominate global indices.

Structural demand drivers are also becoming more visible. Electrification, renewable energy deployment, grid upgrades and rapid AI adoption are increasing global energy intensity. Copper is central to this demand.

Pathways to greater energy security

The ongoing conflict in the Middle East underscores the strategic importance of critical minerals, reinforcing the case for electrification and renewable energy as key pathways to greater energy security and reduced reliance on oil and third-party energy sources.

Data centre energy demand to soar

Data centres currently account for around 3% of US energy consumption, a figure projected to increase to around 12% by 2030 (McKinsey, 2024). Meeting this demand reinforces the need for both clean energy infrastructure and the minerals required to build it.

Ex-China beneficiaries to emerge?

Many critical materials, including rare earths, remain highly concentrated in China. Efforts by the US and EU to diversify supply chains are accelerating, which creates opportunities in regions that are trying to de-risk their mineral value chains. MP Materials, the top contributor in 2025, illustrates this trend, and we expect further ex-China beneficiaries to emerge during 2026.

While commodity markets can be volatile and short-term cyclicality is to be expected, we believe the long-term fundamentals of the asset class remain structurally attractive and that the strategy is well-positioned to capture opportunities in 2026 and beyond.

Key sectors in the portfolio

Copper

Copper is the poster child of critical minerals. It's a key theme within the portfolio, with around 30% exposure. It's fundamental to electrification and has no practical substitute as an electricity conductor. Following a 44% rise in the London Metal Exchange's spot price in 2025, demand resilience will be tested in 2026. However, copper's relatively low cost within end-use applications suggests higher prices can be absorbed without affecting demand.

Supply remains constrained because of disruption at major producers and long project lead times, while merger and acquisition activity highlights the strategic value of high-quality assets. We expect these supply challenges to keep the market tight well into 2026.

Uranium

Uranium is benefiting from a global renaissance in nuclear energy. In 2025, Western governments reaffirmed nuclear power as a core pillar of energy security and decarbonisation. China continues its nuclear expansion at full speed. Inventories have been drawn down over the past decade, mining activity has lagged demand, and supply remains highly concentrated. With uranium accounting for less than 10% of nuclear operating costs, demand elasticity is extremely low. Against this backdrop, we see 2026 as a potential inflection point for the uranium market. The strategy has around 8% exposure to uranium. This includes a holding in Kazatomprom, the world's largest and lowest-cost producer, which also benefits from comparatively strong environmental credentials given its in-situ recovery extraction methods.

Outlook for 2026

Despite heightened geopolitical uncertainty, commodity markets performed strongly in 2025. We think this momentum will extend into 2026. A broad rotation away from software and growth�'heavy assets towards hard assets and materials supports our position. The portfolio currently has around 75% exposure to mining companies -- an area where investors remain structurally underweight, with basic materials accounting for just 3.8% of the MSCI All Countries World Index (Morningstar, 31 January 2026).

Funds operated by this manager:

abrdn Sustainable Asian Opportunities Fund , abrdn Emerging Markets Equity Fund , abrdn Sustainable International Equities Fund , abrdn Global Corporate Bond Fund (Class A)

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Infrastructure in focus: Turning on the capex tap

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Many investors are well-versed in the growth story for data centres, with the rapid building of these assets a focal point in markets and the media. What is perhaps not appreciated is the large-scale capital investment outlook beyond...

13 Apr 2026 - Infrastructure in focus: Turning on the capex tap

By: Magellan Investment Partners

Infrastructure in focus: Turning on the capex tap

Magellan Investment Partners

March 2026

(3-minute read)

Many investors are well-versed in the growth story for data centres, with the rapid building of these assets a focal point in markets and the media. What is perhaps not appreciated is the large-scale capital investment outlook beyond hyperscalers, AI and data centres.

For example, UK water infrastructure highlights the sheer volume of expected investment required. The UK Government has confirmed a GBP104 billion private investment program for the sector between 2025 and 2030. This reflects the years of underinvestment, with improving environmental performance the key objective.
In such a situation, there is no optionality. This investment needs to happen. The UK government estimates ~60% of water mains were built before 1980, with ~13% of these assets over 100 years old. This underinvestment has led to issues such as water pollution and stopgap solutions to support storm overflows and wastewater treatment. With public health concerns and regulatory support, we can expect that this investment will go ahead.
For the listed UK water utilities such as United Utilities and Severn Trent, we view this large-scale sector capex positively. While large capital spending is often viewed with apprehension in other industries, in regulated infrastructure it is a source of earnings. Capital outlays roll into the regulated asset base (RAB) as they come online, forming the basis of allowed returns. More capex supports a higher RAB and greater earnings growth over time.
These listed water utilities are instrumental in delivering the government's planned investment overhaul. In the current regulatory period (2025-2030), Severn Trent guides to 60% growth in its Regulated Capital Value (RCV or RAB) while United Utilities expects >40% growth in its RCV over the same period.

This capex story is durable for regulated utilities, even in a market downturn. Regardless of the economic climate, there are no substitutes for clean water and wastewater infrastructure. For the UK listed water utilities, while share prices are sensitive to rates, this does not reflect any change in the underlying quality of these businesses.

Funds operated by this manager:

Magellan Global Fund (Open Class Units) ASX:MGOC , Magellan Infrastructure Fund , Magellan Global Opportunities Fund No.2 , Magellan Infrastructure Fund (Unhedged) , Magellan Global Fund (Hedged) , Magellan Core Infrastructure Fund , Magellan Global Opportunities Fund Active ETF (ASX:OPPT)

Important Information: This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 trading as Magellan Investment Partners ('Magellan Investment Partners') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation. This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should obtain and consider the relevant Product Disclosure Statement ('PDS') and Target Market Determination ('TMD') and consider obtaining professional investment advice tailored to your specific circumstances before making a decision about whether to acquire, or continue to hold, the relevant financial product. A copy of the relevant PDS and TMD relating to a Magellan Investment Partners financial product may be obtained by calling +61 2 9235 4888 or by visiting www.magellaninvestmentpartners.com

Past performance is not necessarily indicative of future results and no person guarantees the future performance of any financial product or service, the amount or timing of any return from it, that asset allocations will be met, that it will be able to implement its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of a Magellan Investment Partners financial product or service may differ materially from those reflected or contemplated in such forward-looking statements.

This material may include data, research and other information from third party sources. No guarantee is made that such information is accurate, complete or timely and no warranty is given regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material. Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan Investment Partners or the third party responsible for making those statements (as relevant). Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Magellan Investment Partners will not be responsible or liable for any losses arising from your use or reliance upon any part of the information contained in this material.

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Hedge Clippings |10 April 2026

10 Apr 2026 - FundMonitors.com

The war in the Middle East may have dominated markets, but we will leave the rights and wrongs of that to others. What cannot be ignored, however, is the war's impact on markets.

10 Apr 2026 - Hedge Clippings |10 April 2026

By: FundMonitors.com

Hedge Clippings | 10 April 2026

March Delivers a Painful Reminder About Equity Risk

The war in the Middle East may have dominated markets, but we will leave the rights and wrongs of that to others. What cannot be ignored, however, is the war's impact on markets.

Investors have spent the past few weeks being whipsawed by Trump's threats, followed by regular backdowns, deadline extensions, and policy reversals. Whether it is strategy or theatre, policy delivered by social media posts unfortunately dominates the message in the short term. Uncertainty has been the story, and markets have responded accordingly.

March was ugly. The ASX 200 Total Return Index fell more than 7%, while the S&P 500 fared slightly better, but still dropped almost 5%. Those are the sort of monthly numbers that remind investors, very quickly, that equity markets do not rise in a straight line forever.

Against that backdrop, and with almost 40% of funds having now reported their March performance, equity-based funds on average have tracked slightly better than their respective indices. On the surface, that sounds reassuring. But as we noted in last week's Hedge Clippings, averages can be misleading.

The old saying still applies: if your head is in the oven and your feet are in the freezer, on average you are comfortable. In reality, you are experiencing uncomfortable extremes. Fund returns can look much the same. A respectable average can mask some fairly brutal outcomes.

And there has been plenty of pain at those extremes. Only 11% of the funds reporting so far have produced positive returns for March. That is the bad news. The better news is that nearly 55% of equity-based funds have outperformed the ASX 200. In other words, while many managers still lost money, a decent number lost less than the market itself, and the best have protected their investors' capital to a significant degree.

That said, there are also plenty of funds sitting in minus double-digit territory, and their investors will have received a sharp reminder that diversification is not just a nice idea for calmer times. After two or three years of equity returns north of 20% or more, it is easy to get carried away and assume the good run will continue indefinitely.

It rarely does. Which is why diversification across asset classes still matters. Bonds, credit and fixed income may seem dull when equities are flying, but they are there for precisely this sort of environment. March has been another timely reminder that sensible portfolios are built not just for the good times, but for the uncomfortable ones too.

Which is another convenient reminder to log in to FundMonitors.com and use the combination of tools to set up - or update - a Watch List. From there, select funds to create a series of Model Portfolios to track and analyse fund and peer group performances, including each fund's relative Star Ranking.

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16 Apr 2026 - Powering transition: critical minerals are central to the next era

What differentiates our Future Minerals approach?

Opportunities

Pathways to greater energy security

Data centre energy demand to soar

Ex-China beneficiaries to emerge?

Key sectors in the portfolio

Copper

Uranium

Outlook for 2026

15 Apr 2026 - Performance Report: Bennelong Emerging Companies Fund

15 Apr 2026 - Back to normality: How to adapt as volatility re-emerges

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10 Apr 2026 - Hedge Clippings |10 April 2026

10 Apr 2026 - Performance Report: Bennelong Australian Equities Fund

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