Rotate from tech to metals and mining
A multi-year secular rotation is underway from overvalued mega-cap technology stocks into under-allocated metals and mining equities.
The argument
The speakers highlighted a pair trade of the metals and mining ETF (XME) against the Nasdaq (QQQ), arguing that institutional investors and pensions have not yet built meaningful allocations to metals. They noted that while tech is over-leveraging for AI CapEx, mining companies have spent a decade deleveraging and running clean balance sheets.
The thesis, stress-tested
✓ What validates it
- ✓Pensions and large institutional funds publicly announcing new 5% target allocations to metals and commodities
- ✓XME outperforming QQQ on a rolling monthly basis
▸ Risks discussed
- ▸A broader market liquidity shock could temporarily depress illiquid mining equities
- ▸Delays and construction hiccups in infrastructure build-outs
Hear it yourself
"Like, check this chart of XME to QQQ. So the metals and mining ETF do the Qs. This is actually shot at, Julian Brigden. He he mentioned this pair trade. He thinks it's, like, gonna be the multiyear golden trade."
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