Why the next five years could be a golden era for resources investors

This interview was filmed Friday 28th August, 2026. 

If two narratives have dominated 2026, most would agree it's AI and geopolitical conflict - whether it's in the news or around the water cooler. These two forces are reshaping everything around them.

And underpinning both is an insatiable appetite for energy, and the way access to those resources can shift as political alliances are made and broken.

In my conversation with David Franklyn, Head of Funds Management at Argonaut, these key resilient themes have been central to their investment thinking for years, and in his view, aren't going anywhere. They're also the starting point for how Argonaut builds its portfolio. 

Watch the full interview above for all of the insights or continue reading the highlights below. 

Positioning for uncertainty 

While the resources sector is volatile and cyclical by nature, the goal isn't to call turning points, Franklyn explains. "It's about preparing for what might happen in a market where there is heightened equity market risk so that you can take advantage of opportunities when they come."

That heightened risk is playing out now. US equities are up 80–90% over four years, but the risks beneath that are growing: stretched tech valuations, bond yields near historic highs, US government debt above $40 trillion, and ongoing geopolitical conflict - the Russia-Ukraine war soon entering its fifth year, and the US-Iran conflict running since March.

Against that backdrop, part of Argonaut's positioning is defensive. "That means making sure you've got a little bit of cash, making sure that you've got enough of your portfolio in big, quality, liquid stocks so that you can move your proportion of cash really quickly," says Franklyn. 

Lithium: buying the cycle before it turns

Lithium has been one of the more painful commodity trades of recent years, yet it's currently the largest commodity weighting in Argonaut's portfolio.

The team built their lithium exposure from zero at the start of FY26. Spodumene had been broadly flat through FY25 before beginning to move, which they used as the signal to build into quality names ahead of the move in the commodity price.

What followed illustrated the force of momentum and passive flows. Once the lithium price began moving, equities exploded. Valuations stretched to where the market was pricing spodumene at US$2,500 per tonne, against a long-term expectation of around US$1,500. 

"The movement of cash and momentum investing has a much bigger impact. And so you probably need to get set earlier, and probably a bit too early, to make sure that you're already there when it arrives."

With that in mind, Argonaut's current lithium positions reflect a focus on quality over speculation: PLS Group (ASX: PLS); Q2 Metals, (CVE: QTWO) which Franklyn calls "probably the best development project in the lithium space - spodumene space - in the world"; and Lithium Argentina (NYSE: LAR), which he sees as a standout value opportunity.

Bullish on copper but cautious on the price

Argonaut typically weights copper at 20–25% of the portfolio, but has been trimming that exposure since November. They remain broadly bullish, but valuation discipline takes precedence over the macro call.

"There are times where copper can probably run a bit too hard - the copper price and copper equities do as well. So we're careful to adjust the portfolio."

Within that caution, Franklyn identifies two distinct opportunities. The first is in how the market values major copper producers. He points to companies like Ivanhoe Mines (TSE: IVN), Freeport-McMoRan (NYSE: FCX), and First Quantum Minerals (TSE: FM) that are sitting on 20–50 years of copper in the ground, yet tend to trade in similar multiples to producers with just a five-year mine life. 

"It probably doesn't correctly value those major copper producers that have a huge endowment of copper in the ground."

The second is in identifying copper development projects. With the whole market hunting for new copper supply, Argonaut has been looking globally for projects that tick specific boxes.

"Good locations, well-managed, capex is not too excessive, but will ultimately get to 50,000 to 100,000 tonnes. And I think that's a real opportunity as well."

The process in practice

Franklyn's framework has three steps: identify the resilient themes, determine which commodities benefit, then find the best quality and value companies within those commodities. A fourth step -  managing downside risk - sits underneath all of it.

The top contributors to Argonaut's performance since inception are an illustration of the system at work, across copper, lithium, uranium, oil and gas, and gold:

NexGen Energy (ASX: NXG) holds what Franklyn describes as "the highest quality uranium project in the world" in Canada's Athabasca Basin: low cost, very high grade, targeting up to 30 million pounds per annum from around 2030–32.

Greatland Resources (ASX: GGP) is listed in the UK when Argonaut first bought it, after it acquired Telfer and Havieron from Newmont. The market was divided on whether Telfer was an asset or a liability. Argonaut took a large position, and when Greatland moved its listing to Australia, that conviction paid off.

IGO (ASX: IGO) owns Greenbushes, which Franklyn considers the best quality lithium project in the world. 

OZ Minerals (ASX: BHP) is a high-quality copper producer which has been acquired by BHP.

A more recent addition is Warrior Met Coal (NYSE: HCC), a US-listed met coal producer Argonaut began buying in May. 

With gold on a tear over the last couple of years, it's also been a strong performer, and Argonaut also run a dedicated gold fund. 

"What we're looking for is good production growth, strong balance sheets, well managed, and ideally the projects are based in Australia."

The Australian producers who fit that brief in Franklyn's view are Genesis Minerals (ASX: GMD), Capricorn Metals (ASX: CMM), Ramelius Resources (ASX: RMS) and Greatland Resources (ASX: GGP) - growing production numbers from 150,000–250,000 ounces towards 500,000–700,000 ounces by 2030, with dividends likely to follow.

Managing the downside

When Liberation Day hit, and again, when markets sold off on the US-Iran conflict, Argonaut moved from 10% cash to 30% cash within a single day. For Franklyn, the ability to move that quickly is built into the portfolio as a guardrail.

"The key is it's all in the preparation. You've got to assess the level of risk and then build the portfolio around that."

Maintaining enough large-cap, liquid exposure to convert quickly is what made those moves possible. Franklyn points to the period from December 2025 to July 2026, when most peers reporting to Morningstar were down, Argonaut was up.

In FY26, the fund returned 62% and in the 5 years to FY26, the Argonaut Natural Resources Fund was the best performing resources fund in Australia, and second best overall across all strategies. 

Looking ahead

Franklyn's base case is a good five years for resources, underpinned by the same forces he's been tracking for several years now - electricity demand growing at twice the rate of overall energy demand, geopolitical risk supporting gold and energy security commodities, and the sector seeing more exploration and development activity than it has in years. 

"It's an exciting space", he says.

On the energy transition, he's cautiously optimistic. 

"The tragedy of what we've been through in the last five years is that coal is still clearly the dominant energy source, and as far as emissions go, we need to reduce that. I think the next five years will be a lot more successful in moving to where we want to be than the last five have been."

For Franklyn, results and performance for investors are an output of a process and a system, which they will continue. 

"We just focus on doing what we do: resilient themes, identify the commodities, value and quality, and then managing downside risk. So we'll just keep doing what we're doing."

Managed Fund

Argonaut Natural Resources Fund

Australian Shares

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Managed Fund

Argonaut Global Gold Fund

Alternative Assets

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