Insights · By Yue Jer
The Energy Transition is now driven by economics, not subsidies.
Solar, wind, and batteries are now cheaper than their fossil-fuel alternatives in everything from power generation[1] to passenger and freight vehicles[2].
Cost parity has been reached and exceeded. Utilities are installing more solar/wind over gas turbines[3], and consumers are shifting towards EVs over petrol/diesel[4], simply because upfront costs are lower and operating costs too.
The Energy Transition will demand exponentially increasing volumes of new energy metals like lithium.
Unlike copper, iron ore, and other industrial metals, new-energy metals markets are much smaller and enjoy much higher growth rates. We expect lithium demand to grow at a 26% CAGR through to 2030. This sector will be a recurring source of alpha throughout the inevitable cycles that a growing industry experiences.
We expect the individual components of lithium demand (passenger cars, grid storage, trucks, etc) to follow an S-curve adoption pattern.
Why do we not currently invest in nickel, cobalt, graphite, etc?
We studied these sectors in detail in preceding years. Nickel and cobalt are in a fundamentally oversupplied state[5] as battery technology shifted towards lithium iron phosphate (LFP) chemistries requiring no nickel nor cobalt.
Graphite is largely resourced and produced within China[6], and we believe in China’s ability to scale quickly and at low cost, making much of the non-Chinese listed graphite companies unattractive for investment.
We did not invest in these sectors since the fund inception and avoided their sector underperformance.
Lithium, Silver, Gold, Copper as key constituents of the AGMF.
The Lithium sector will be the key growth sector of this decade and exposure to high-growth, high-quality companies and underlying assets will be the main strategy.
Silver is an important component of solar panels and electronics required in the AI boom, and this market has been in deficit for several consecutive years[7]. It is difficult to grow silver supply as only a quarter[8] of the world’s silver mines are pure-play silver, the rest being high-capex gold/copper and lead/zinc mines with silver as a byproduct. We thus believe the long-term pricing trend is upwards.
Gold is in the portfolio as a general inflation hedge, and as a by-product of owning silver mines. The key investment theme for gold is central bank buying – particularly China with its massive trade surpluses, de-dollarization theme, and there being no other asset class large and liquid enough to absorb that massive trade surplus.
We are structurally bullish on copper in the long run but believe it to be somewhat overpriced currently, as prices and inventories have risen concurrently[9]. A broad market correction/crash and reversion of its role as Dr. Copper should allow a much better entry point.
[1] https://about.bnef.com/insights/clean-energy/battery-storage-costs-hit-record-lows-as-costs-of-other-clean-power-technologies-increased-bloombergnef/
[2] https://rmi.org/app/uploads/dlm_uploads/2024/06/RMI_cleantech_revolution.pdf
[3] https://www.eia.gov/todayinenergy/detail.php?id=64364
[4] https://www.iea.org/reports/global-ev-outlook-2026/executive-summary
[5] https://iea.blob.core.windows.net/assets/2831e0dc-f030-4d14-985c-d26d1af4430f/GlobalCriticalMineralsOutlook2026.pdf
[6] https://www.usgs.gov/publications/production-mineral-commodities-and-geospatial-map-mineral-industries-and-related
[7] https://silverinstitute.org/global-silver-investment-to-remain-strong-in-2026-against-the-backdrop-of-a-sixth-consecutive-annual-market-deficit/
[8] https://silverinstitute.org/silver-supply-demand/
[9] https://www.dws.com/en-fr/insights/cio-view/charts-of-the-week/2026/copper-between-shortage-and-stockpiling/