Ignore resources at your peril: commodities are re-emerging as a growth asset

The commodities sector staged a remarkable comeback in 2025. Structural shifts – from geopolitics and supply chain realignment to the accelerating energy transition – have put resource equities back in the spotlight. Investors are rediscovering these assets as valuations remain compelling and fundamentals strengthen.

2025 in review: Commodities stage a comeback

Natural resources delivered robust gains in 2025, with the sector’s benchmark index up about +15% for the year. This broad performance, however, masked striking divergences across sub-sectors.

• Industrial metals and mining stocks were the standout, surging ~+40% on tightening supply and booming demand for critical minerals.
• Energy equities also advanced (+14%) amid stable oil prices and strong gas demand.
• In contrast, agricultural commodities were the laggard (-7%), reflecting oversupply in key crops and weaker pricing dynamics.

Within mining equities, precious metals stole the show: gold and silver were up +127% in 2025, Uranium stocks weren’t far behind, climbing +63% on nuclear energy’s revival, while copper miners rose +55%, reflecting copper’s critical role in electrification and infrastructure. 

The clear lesson from 2025 is that hard assets – from industrial metals to precious metals – are reclaiming their strategic importance in a world reshaping its energy systems and supply chains.

What to expect in 2026

Looking ahead, 2026 is poised to extend the momentum seen in commodities. Three key drivers underpin this optimistic outlook:

• Persistent safe-haven appeal: In an environment of currency volatility and geopolitical tensions, hard assets – especially gold and silver – will continue to attract safe-haven investment. Investors seeking stability are likely to maintain high allocations to precious metals in 2026, supporting commodity prices even if growth moderates.
  
  
• Energy transition meets the AI boom: The push for decarbonisation and electrification ensures robust demand for metals like copper, nickel, and lithium well into 2026 and beyond. At the same time, the build-out of AI infrastructure and data centres is metal-intensive, requiring vast amounts of copper and rare-earth elements for power and cooling systems. These dual trends create a powerful, sustained demand profile for commodities critical to new energy and tech.
  
  
• Reindustrialisation of the West: Geopolitical realignments are forcing the U.S., Canada, Australia and others to reduce dependence on China for critical minerals. In response, governments are streamlining permits, funding new mining projects, and incentivising domestic supply chains. This structural shift is not a short-term cycle - it’s a decade-long transformation.

What looks good: Where are the opportunities?

With these tailwinds at our backs, the most compelling opportunities lie in mining companies with strong management and clear growth projects.

In particular, firms that combine operational excellence with exposure to the critical minerals essential for the energy transition and defence technologies are poised to outperform. Many resource companies remain undervalued relative to their growth potential, so investors have a chance to buy quality assets at attractive prices.

Several names that stand out:

• Develop Global (ASX: DVP): Base metals producer; positioned to benefit from strong demand and new projects.
• PMET Resources (TSX-V: PMET): Lithium exploration leader with a world-class Canadian deposit for EV batteries.
• Foran Mining (TSX: FOM): Copper developer offering growth exposure vital for electrification and infrastructure.

What to avoid?

While the outlook for commodities is positive and the sector offers attractive upside, investors should remain selective. Not all players will benefit equally, and there are pitfalls to avoid:

• Overly defensive plays: Companies that prioritise dividends and having limited growth projects may underperform in a market driven by expansion and innovation.

• Large energy consumers: Energy-intensive operations (such as smelters and refiners) face margin pressures from rising energy costs and carbon compliance requirements. These businesses are vulnerable as higher operating costs could impact profits.

In short, avoid companies without a growth story or those structurally on the wrong side of decarbonisation trends. It’s a year to be picky and focus on high-quality names with clear tailwinds.

Why now? The case for commodities in 2026

Despite their strategic importance, resource stocks remain undervalued relative to the broad global equities. In August 2025, the S&P 500 to Commodity Index ratio hit a record high, signalling extreme divergence between equities and commodities. This disconnect presents what I believe to be a rare opportunity for investors seeking both value and growth.

We have observed many commodities double or triple over time, and this upside could persist. It is not unreasonable to envision commodity prices rising another 100–200% over the coming years, even if broad equity indices were to pull back by 25–35% from today’s levels. With quality low-cost producers and high-grade projects in hand, many mining companies look attractive on a forward-looking basis.

In our view, this is not just a short-lived cycle but the beginning of a multi-year boom underpinned by structural forces. As Western economies prioritise national security and supply chain resilience, unprecedented capital is flowing into new mines and energy projects to secure reliable supply. The last time valuations were this attractive was during the early 2000s commodities supercycle, which delivered outsized returns for patient investors. Minerals are critical for the global economy, and fundamentally irreplaceable, so the race is on to secure reliable supply.

The message for investors is clear: ignore resources at your peril. Commodities and natural resource equities are entering 2026 with powerful tailwinds at their back. This asset class, long treated as an afterthought, is pivoting from defensive to growth. With the world’s economies undergoing profound transformation, commodities have re-emerged as essential building blocks of the future. Looking ahead to 2026, the takeaway is to stay informed, stay selective, and be ready to seize the opportunities in this resurgent sector. The commodities comeback appears to be just getting started.

Investing in a brighter future together

Janus Henderson is a leading global active asset manager dedicated to helping clients define and achieve superior financial outcomes through differentiated insights, disciplined investments, and world-class service. As of September 30, 2025, Janus Henderson has approximately AUD$730 billion in assets under management, more than 2,000 employees, 350+ investment professionals and 25 offices worldwide. The firm helps millions of people globally invest in a brighter future together.

Please note, this wire is part of Livewire's Ultimate Investing Guide for 2026. The full guide is available for download here.