4 Metal Mutual Funds Quietly Betting Big on Steel and Aluminium

Four Mutual Funds with High Metal Sector Exposure

Here is how much of each portfolio sits in iron and steel plus non-ferrous metals combined:

To put those numbers in context, a diversified equity fund typically holds somewhere between 5% and 10% in materials. These funds are running double that, and in Samco's case, more.

Why Metals and Why Now?

Before looking at the funds, it helps to understand what they are buying into, because the metals story in 2026 is genuinely strong on fundamentals rather than just momentum.

Three forces have converged. The first is price.

Aluminium rose 22% during 2025 as supply stayed tight and demand climbed from the automotive and renewable energy sectors. Copper and other base metals followed, helped by supply disruptions in major mining regions and geopolitical tension in West Asia.

The second is domestic demand. India produced 106.5 million tonnes of steel in 2025, and the National Infrastructure Pipeline and PM Gati Shakti continue to push construction activity.

The third is policy. The government has introduced safeguard duties on steel to protect domestic producers from imports, and the Production Linked Incentive scheme supports the sector.

So this is not a sector rallying on fumes. Metal companies delivered strong FY26 performances with margins expanding across geographies, even against subdued pricing in some segments.

Samco Large Cap and Samco Large & Mid Cap Funds

Samco Large Cap Fund holds 21.35% in metals, the highest of the four. Samco Large & Mid Cap Fund holds 16.38%.

Samco runs what it calls the C.A.R.E. Momentum strategy. The acronym stands for Cross-sectional, Absolute, Revenue and Earnings momentum, and the system systematically identifies stocks showing strength across all four dimensions.

Cross-sectional momentum measures how a stock is performing relative to others. Absolute momentum looks at its own price trend. Revenue and earnings momentum track whether the underlying business is accelerating.

Feed the last eighteen months of Indian market data into a model like that and metals come out near the top, almost by construction. The sector had the price momentum, and it had the earnings momentum too, with FY26 margins expanding across the board.

This is the insight about these two funds: the metals overweight is a by-product of the strategy.

That distinction matters enormously for an investor. A discretionary manager who buys metals because he believes aluminium is undervalued will hold through a downturn. A momentum model will not. When metals stop leading, the model rotates out, mechanically and without sentiment.

Both funds are also very young. Samco Large Cap launched in 2025 and its net asset value still sits below its starting value of Rs 10. The regular plan carries an expense ratio of 2.1%, and the fund is rated very high risk.

ICICI Prudential Multicap Fund

ICICI Prudential Multicap Fund holds 17.9% in metals. This is a scheme launched in 1994, managed today by Lalit Kumar, with assets under management of roughly Rs 176.76 bn and a five-year annualised return of about 15.9%.

It has an expense ratio of 1.42% and is benchmarked to the Nifty 500 Multicap 50:25:25 index.

As a multicap, the fund is mandated to hold at least 25% each in large, mid and small cap stocks, which limits how much it can concentrate anywhere. Within those constraints, it has still chosen a substantial metals position.

The portfolio shows this is deliberate. Among its largest holdings sit Jindal Steel and Vedanta, alongside names like UltraTech Cement and ABB India.

These are considered positions in a portfolio built by a fund house with three decades of history.

Capitalmind Flexi Cap Fund

Third is Capitalmind Flexi Cap Fund, at 17.48% exposure to metals.

Capitalmind is a young, quantitatively-minded asset manager, and this was its very first scheme, launched in 2025.

It grew quickly, crossing Rs 1 bn in assets within 35 days of launch and reaching roughly Rs 5.76 bn for the direct plan by mid-2026, drawing over 5,100 unique investors and more than 1,800 empanelled distributors.

The fund is managed by Prateek Jain and Anoop Vijaykumar, and as a flexi cap it has complete freedom to invest across large, mid, and small companies wherever the team sees an opportunity.

It holds at least 65% in equity at all times. Its allocations lean heavily toward financial services and basic materials, the sector bucket that houses metals and mining.

Its NAV remains close to its Rs 10 starting point, at about Rs 9.91 in mid-2026, reflecting how recently it launched and the fact that its first year covered a difficult period for Indian equities generally.

A Word of Caution

A 46% one-year rally is exciting. But it's also the single biggest reason to be careful here.

Metals are among the most cyclical sectors in any equity market. Steel and aluminium companies do not control the price of what they sell. That price is set globally, by Chinese production, by supply disruptions, by currency moves and by the pace of world growth.

A company can execute flawlessly and still see profits halve because a commodity price fell.

There is a second risk specific to these particular funds: concentration without a mandate. If you buy a metal ETF, you know exactly what you own and you have chosen the risk deliberately.

If you buy a large cap fund and it happens to hold 21% in metals, you may be carrying a sector bet you never intended to make.

That cuts both ways. It has worked handsomely over the past year. It would hurt just as much in reverse, and an investor who bought a diversified fund expecting diversified behaviour might be unpleasantly surprised.

Third, and most practically, portfolio allocations change. The data here reflects a point in time.

Conclusion

The fundamental case for the metal sector at this point of time is noteworthy. Infrastructure demand, policy protection, tight global supply, and strong company balance sheets are all genuine.

But a sector that has run 46% in a year has already priced in a great deal of that good news, and cyclical sectors have a long history of humbling investors who arrive late.

If you want metals exposure, the honest questions are how much you want, whether you want it chosen deliberately or as a side-effect of somebody's model, and whether you will still want it when the cycle turns.

Evaluate your own financial goals, time horizon, risk tolerance, and each fund's mandate, track record and costs as key factors before drawing any investment conclusions.

Happy investing.

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