Non-ferrous metals are experiencing a valuation re-evaluation; Fuguo Resources Select is seizing the long-term allocation opportunity

Product Listing | China Investment Network

Review | Li Xiaoyan

Geopolitical conflicts continue to intensify, causing sharp fluctuations in the global commodity markets. International oil and gold prices are rising simultaneously. As the “skeleton and blood vessels” of modern industry, the supply chain security and pricing logic of non-ferrous metals are undergoing profound reshaping. Compared to the short-term visible volatility of oil, non-ferrous metals, with their risk-hedging, industrial, and strategic attributes, have become an “anchor of value” that cannot be ignored in the current complex environment. Against this backdrop, the GuoFu Resources Selected Hybrid Initiator Fund (Class A 021642, Class C 022167), which focuses on resource themes, leverages full industry chain coverage and precise supply-demand judgment, with long-term value allocation increasingly prominent.

Four Major Categories Build the Core Framework of Resource Investment

Non-ferrous metals include precious metals, industrial metals, energy metals, and strategic minor metals, forming the core underlying logic of industry research and investment. Different categories exhibit differentiated characteristics during economic cycles and geopolitical changes.

Precious metals, centered on gold, silver, platinum, and palladium, are “risk-hedging tools” during geopolitical turmoil and inflation cycles. Gold and silver possess both inflation resistance and risk hedging properties. The continuous accumulation of gold by central banks worldwide provides long-term support; by 2026, there are no signs of slowdown in global central bank gold purchases. Platinum and palladium are key materials for automotive exhaust purification. As demand for emissions control in new energy vehicles increases, their industrial attributes and strategic value continue to strengthen.

Copper and aluminum in industrial metals are macroeconomic “barometers.” Copper, known as the “mother of industry,” is widely used in power grids, infrastructure, and high-end manufacturing. The construction of AI data centers and grid upgrades drive copper demand to grow over 5% annually. Aluminum, the “king of lightweight,” sees strong demand in lightweighting new energy vehicles, photovoltaic supports, and energy storage boxes. The aluminum per vehicle in global new energy vehicles has risen to 250kg, becoming a core driver of industrial metal demand growth.

Energy metals are the “core raw materials” for green transformation. Lithium, cobalt, nickel, and other varieties support the development of new energy industries. A pure electric vehicle uses 3-4 times more copper than a fuel vehicle. Photovoltaic power stations have high demand for aluminum frames, and lithium batteries rely heavily on lithium, cobalt, and nickel resources. With global new energy vehicle sales surpassing 28 million and energy storage installations growing by 60%, demand for energy metals continues to lead growth.

Strategic minor metals, though used in limited quantities, have irreplaceable strategic value. Tungsten, antimony, germanium, and rare earths are widely used in military, chips, and high-end manufacturing. About 79% of tungsten and 76% of cobalt are produced in China and the Democratic Republic of Congo. Coupled with increased export controls in resource countries, strategic minor metals exhibit market characteristics of “easy to rise, hard to fall.”

Triple Geopolitical Risks Amplify Industry Differentiation

Recently, geopolitical hotspots have rapidly transmitted to the non-ferrous supply chain through risk aversion, shipping disruptions, and energy costs, causing industry segmentation with varying impacts across categories.

Risk aversion drives short-term capital into precious metals, with gold and silver prices oscillating upward, becoming core assets for hedging geopolitical risks. Shipping disruptions, especially through key routes like the Strait of Hormuz and the Red Sea, carry large volumes of non-ferrous metal transportation. Blockages increase logistics costs and insurance premiums, significantly raising supply chain costs for base metals like aluminum and copper. Middle Eastern electrolytic aluminum capacity accounts for about 9% of the global total; geopolitical conflicts restrict local capacity and halt alumina transportation, shifting the global aluminum market from “slight surplus” to a deficit of several million tons.

Rising energy costs further squeeze profit margins in non-ferrous industries. Electrolytic aluminum production is highly dependent on electricity; rising energy prices push electricity costs above 50%. Stricter environmental regulations accelerate the exit of high-energy-consuming capacities. Meanwhile, resource nationalism, such as Congo increasing cobalt mining rights fees and Indonesia restricting nickel mining quotas, adds supply-side uncertainties. These factors accelerate the global reshaping of the non-ferrous supply chain, with countries pursuing diversified resource supply strategies.

Three Major Trends Drive “Cycle + Growth” Dual Momentum

Beyond short-term geopolitical fluctuations, the long-term investment logic of the non-ferrous metals industry has shifted from purely cyclical to a “cycle + growth” dual drive, supported by three core trends.

Green transformation continuously boosts demand, becoming the industry’s growth engine. The global “dual carbon” goals and explosive growth in new energy industries drive upgrades in demand structure for non-ferrous metals. Beyond new energy vehicles and photovoltaics, sectors like energy storage and wind power also sustain demand for copper, aluminum, and lithium. The energy transition under carbon neutrality is expected to sustain growth for decades. Domestic policies focusing on high-end green consumption further stimulate demand for high-performance copper and aluminum alloys, injecting new momentum into the industry.

Supply-side rigidity is pushing the industry’s price center upward in the long term. Mining exploration to production takes 5-10 years. Over the past decade, insufficient global mining investment has led to scarcity of high-quality mineral resources. Coupled with increased export controls and stricter environmental regulations in resource countries, supply cannot quickly respond to demand growth. By 2026, new copper mine production is expected to be less than 500,000 tons, with supply growth in energy metals lagging behind demand, gradually widening the supply-demand gap and supporting long-term industry value.

Dual support from monetary and geopolitical environments enhances the value of resource assets. The acceleration of de-dollarization worldwide, along with central banks’ continued accumulation of gold and other physical assets, combined with normalized geopolitical conflicts, increases the allocation value of non-ferrous metals as inflation-hedging and risk-averse assets. The Fed’s easing cycle is expected to see 3-4 rate cuts by 2026, weakening the dollar index and further boosting the financial attributes of non-ferrous metals, with prices of gold, silver, and other varieties steadily rising.

GuoFu Resources Selected Accurately Captures Structural Opportunities

For ordinary investors, directly participating in stocks or futures markets requires high professional skills. Investing through resource-themed funds is a more efficient approach. The GuoFu Resources Selected Hybrid Initiator Fund invests over 80% of non-cash assets in resource-related stocks and depositary receipts, covering base metals, precious metals, energy metals, and oil, constructing a diversified portfolio.

The fund manager adheres to a “rotation of varieties under supply-demand framework” strategy, focusing on core sectors like energy metals to precisely grasp structural industry opportunities. For commodities like copper, gold, and aluminum with significant recent gains, the fund emphasizes sustainability judgments to avoid short-term volatility risks. For energy metals like lithium, it relies on supply-demand reversal signals to position for price elasticity. Morgan Stanley forecasts a global lithium market gap of 80,000 tons by 2026, with a potential reversal in supply-demand dynamics that could boost lithium stocks, aligning with the fund’s investment direction.

In terms of performance, the non-ferrous metals sector ranked first among all industries in 2025, with industry prosperity continuing to rise. GuoFu Resources Selected, through precise sector positioning and risk control, has captured excess returns during the industry rally. Its top 10 holdings account for 51.32%, with moderate concentration, balancing yield and stability. The fund manager has extensive experience in resource industry research, using a “three-stage analysis + 3×3 matrix” framework to accurately identify cycle β and stock α, navigating through cyclical fluctuations.

2026 Investment Outlook: Optimize Allocation to Capture Structural Opportunities

Looking ahead to 2026, the tight global non-ferrous supply chain is unlikely to change significantly. Dual drivers of geopolitical risks and green transformation are expected to sustain a positive overall trend, but differentiation among varieties may intensify, requiring optimized segmentation based on supply-demand dynamics.

In the short term, precious metals, aluminum, and strategic minor metals present phased opportunities. Precious metals benefit from risk aversion and central bank gold purchases; aluminum is supported by energy costs and supply constraints; strategic minor metals, due to concentrated supply and strategic importance, have price advantages. In the medium to long term, the long-term value of the industry will be driven by three main factors: green transformation, supply rigidity, and monetary and geopolitical support. Energy metals and high-end manufacturing-related minor metals are expected to continue leading.

GuoFu Resources Selected, leveraging full industry chain coverage and professional research capabilities, will precisely seize industry structural opportunities in 2026. For investors, it is advisable to monitor geopolitical developments for short-term tactical opportunities while focusing on long-term fundamentals, participating in the growth of the non-ferrous metals industry through professional fund tools to achieve steady asset appreciation in a complex market environment. (Risk warning: Fund investments involve risks. Investors should carefully read the fund contract, prospectus, and other legal documents before making investment decisions to understand the fund’s risk-return profile and choose products suitable for their risk tolerance.)