Why WAM Active is going for gold and still backing miners

Market thematics move so quickly these days that cyclical opportunities can now be measured in months, not years. 

AI capex, gold and rare earths have been big performance drivers for investors in 2026, and some have already come back full circle to being opportunities again. 

Here, Wilson Asset Management's Shaun Weick takes us through some of the major moves in the WAM Active (ASX: WAA) portfolio, which enjoyed its best ever performance in FY26.

He highlights a "very cheap" out-of-favour financial services company that has quietly been staging a comeback and the many ASX AI plays that have driven recent outperformance, but may have flown under the radar of a lot of investors. 

He also explains why WAM Active is going back to gold and the aspect of the AI capex thematic that's dominating war room discussions, and how it has just seen the fastest drawdown in 30 years. 

What was the most notable addition to the portfolio recently and why?

One of the more notable additions has been Zip (ASX: ZIP). 

We continue to see evidence of a healthy US consumer, with the recent US bank results reinforcing our view that credit conditions remain robust. Management has done a good job of managing investor expectations, balancing growth and risk, demonstrating they can continue to grow transaction volumes strongly while maintaining discipline around credit quality.

We think there is upside risk to FY27 consensus forecasts, while the balance sheet is in excellent shape and management is actively buying back stock. The share price has materially underperformed key US peers, which have rallied strongly in recent weeks, and the stock remains very cheap at around 9x EV/Cash EBITDA versus history.

What was the most notable sell or downsize in the portfolio recently?

Our most notable reduction was within the gold sector, where we reduced overall exposure through February and March as the market appeared to be approaching a "blow off top" moment. Gold had been a strong contributor to returns over the past year, and we felt it was appropriate to trim exposure following a significant rally.

While the Iran conflict, rising inflation expectations and USD strength have contributed to a sharp pullback, recent price action is encouraging, with signs of stabilisation around the key US$4,000 level. 

We believe it is time to selectively add back exposure [to gold] as the Iran conflict eases and the hawkish Federal Reserve narrative subsides. 

Forrestania Resources (ASX: FRS) is a standout at current levels in our view, on track to be a 220koz producer by 1QCY27, with comparable companies trading at 3-4x its current market cap. We also like Genesis Minerals (ASX: GMD) and Benz (ASX: BNZ), as we see catalysts to re-rate the stocks irrespective of broader gold price moves.

What's your most notable overweight and why?

Key overweight remains materials, particularly copper and rare earths. Key positions include Lindian Resources (ASX: LIN), Viridis Mining (ASX: VMM), Solstice Minerals (ASX: SLS) and Cobre (ASX: CBE) where each has strong near-term re-rate catalysts. 

We think the recent weakness within the critical minerals space has created opportunities, driven by positioning as opposed to fundamentals which continue to be supportive in our view. 

Electrification, AI infrastructure, defence spending and the push by Western economies to secure critical supply chains and reduce China's grip are all increasing demand for these commodities. At the same time, supply remains constrained in several markets.

What's your most notable underweight and why?

We remain relatively cautious on consumer-facing parts of the domestic economy.

Australian households are still feeling the cumulative impact of higher interest rates and cost-of-living pressures. We also think recent tax policy settings have weighed on confidence and activity more broadly. While conditions should improve as rates begin to ease, we are yet to see a meaningful recovery in consumer sentiment. Broadly, we think consensus earnings expectations remain too high and are awaiting a "rebase".

The encouraging part is we believe interest rates have likely peaked domestically which historically has seen capital flow back into the small cap sector. Investor positioning is light and the stock prices will bottom before the news flow, so we are selectively adding exposure where we see upside such as SkinKandy (ASX: SK1), FDC (ASX: FDC) and Flight Centre (ASX: FLT).

What's been one of your most notable performers recently?

Exposure to the boom in artificial intelligence capex and its beneficiaries have been a major driver of performance in the portfolio. 

Direct beneficiaries such as soon-to-be-listed neocloud Firmus, Megaport (ASX: MP1) and FortifAI (ASX: FTI), the "picks-and-shovels" plays including Maas Group (ASX: MGH), ALS (ASX: ALQ), Southern Cross Electrical (ASX: SXE), Vysarn (ASX: VYS) and DXN Limited (ASX: DXN) and technology companies that are leveraging AI to deliver improved hospital and patient outcomes such as Artrya (ASX: AYA) and EchoIQ (ASX: EIQ). The critical minerals sector is also experiencing tailwinds from the AI buildout.

What are the themes and trends dominating discussions right now?

For more than twelve months, market leadership has sat with the beneficiaries of the AI capex boom — chips and memory, electrical services, data-centre construction, power delivery, and the commodities underpinning the buildout. 

Citi forecasts public AI capex above US$1tn in 2027, up 33% year-on-year, and US$1.5tn by 2030, with Amazon (NASDAQ: AMZN), Meta (NASDAQ: META), Alphabet (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT) making up around 90% of that spend.

July has seen an aggressive rotation: winners have been dumped and losers rallying. Using the Goldman Sachs Momentum basket as a proxy for the winners, the index is down a staggering 32% month-to-21 July - the fastest drawdown in the factor in over 30 years. Signs of capitulation selling and hedge fund deleveraging are clear.

To land where we are: the July pullback has been sharp and painful, but our baseline stays positive. We're seeing pockets of capitulation selling and hedge-fund deleveraging and read the weakness as positioning-driven rather than a break in fundamentals. 

Early US reporting season results are supporting this and are the barometer that matters - it's the key pillar under the market. The question we're watching: does this rotation have legs or has it already finished?