At a time when markets are preoccupied with AI and other mega-cap tech stocks, the observation from Elea Capital and Ixios Asset is straightforward: the increasing concentration of indices is reducing market efficiency.

This situation is prompting fund managers to seek segments that are less exposed to the mechanical flows of ETFs and index funds. For example, Elea Capital favors universes overlooked by the major indices, which are capable of offering diversification and decorrelation. Furthermore, "the mechanisms that once made the classic 50% equity, 50% bond portfolio robust no longer function as they used to," analyzes Bertrand Haumesser.

Indeed, increasing geopolitical tensions, record levels of public debt, and the progressive loss of safe-haven status for sovereign bonds have reshuffled the financial pack, leading Elea Capital to allocate more space to tangible assets such as critical or precious metals.

Critical Metals: China Central to the Issue

For David Finch, the primary economic challenge of the coming years boils down to one question: how can the West reduce its dependence on China? "Today, Beijing controls the bulk of global refining for many critical metals. For certain rare earths, as with antimony, China accounts for up to 95% of the world's finished metal production."

This dominance is the result of several decades of investment in mines, but more importantly in processing infrastructure, a segment that Western countries gradually abandoned for economic and environmental reasons.

According to Ixios, demand for metals is also set to accelerate, supported by the electrification of transport, the development of data centers linked to artificial intelligence, the strengthening of power grids, and rising military expenditure, all of which create a growing need for copper, uranium, rare earths, and tungsten.

At the same time, development timelines for new mines often reach fifteen to twenty years, while existing deposits are aging and seeing their productivity decline.

For Ixios, these factors are shaping the contours of a true supercycle in metals.

Gold Regains Its Monetary Status

 Since the freezing of Russian reserves in 2022, central banks have accelerated their purchases of the yellow metal within a context of de-dollarization. They are seeking to reduce their dependence on the dollar and US  bonds.

"Since 1996, this is the first time that central banks hold more gold than US Treasuries in their reserves," the specialists point out. And the trend is set to continue: China, India and several Gulf States still have considerable accumulation potential.

China, where gold represents under 10% of reserves, and India, where it represents less than 20%, notably have significant catch-up potential. To reach the reserve levels of the United States, Beijing would need to buy the next ten years of global gold production.

Faced with exploding public debt and fears of currency depreciation, gold appears as a protection against the erosion of purchasing power. "When you measure currencies against gold over 25 years, they have lost between 90% and 95% of their value," he notes. According to him, the yellow metal is therefore not just a safe haven in times of crisis, but also a bulwark against risks related to growing government debt and monetary creation.

Gold Miners: A Still Overlooked Bet

While gold has risen sharply in recent years, David Finch believes that mining companies have not yet benefited from a comparable revaluation.

"The sector is currently generating historic levels of cash flow, balance sheets are deleveraged, and yet valuations remain among the lowest in the market."

He says that investors remain scarred by the mistakes of the previous mining cycle and are underestimating the profound transformation of the sector.
For Ixios, share buyback programs, increased dividends, and rediscovered financial discipline could gradually lead to a readjustment of valuations.