Top 3 Mutual Funds with Exposure to Copper and Industrial Metals

As we step into 2026, portfolio conversations are gradually shifting beyond traditional equity themes toward segments that are closely tied to real economic activity. One such space gaining attention is industrial metals - a category that includes copper, zinc, aluminium, and iron ore.

These metals are not emerging trends, but as the new year begins, they are being reassessed through a fresh lens: their growing relevance in global infrastructure expansion, energy transition, and long-term manufacturing growth.

• Copper sits at the centre of this renewed interest. It is increasingly viewed as a critical input for the modern economy, supporting power transmission, electric mobility, renewable energy systems, and data infrastructure.
• Zinc plays an equally important role by strengthening steel through galvanisation, making it indispensable for infrastructure longevity and industrial applications.
• Aluminium contributes through its lightweight and conductive properties across transportation, power, and packaging, while iron ore continues to anchor steel-led growth linked to construction.

Together, these metals reflect the physical foundations of economic progress rather than purely financial narratives.

What makes 2026 feel different is the convergence of sustained demand visibility and tighter supply dynamics. Mining projects have long gestation periods, environmental approvals are becoming stricter, and supply chains remain vulnerable to geopolitical and energy-related disruptions.

At the same time, governments and corporates are entering a phase of renewed capital spending, focusing on infrastructure upgrades, clean energy buildouts, and manufacturing resilience.

This creates a backdrop where base metals are no longer just cyclical plays but are increasingly seen as strategic assets within the broader growth ecosystem.

For investors, metal exposure is increasingly being evaluated through mutual funds rather than direct commodities, given the volatility and timing risk associated with metal prices.

Funds investing in metal and mining companies provide a more structured way to participate in the theme through professional management.

The three mutual funds highlighted are selected for their higher exposure to industrial metal stocks and relatively strong risk-adjusted performance. As 2026 begins, a SIP-based allocation can help manage timing risk and position metal-focused funds as a satellite allocation alongside a diversified equity portfolio.

#1 ICICI Pru Commodities Fund

ICICI Pru Commodities Fund offers targeted exposure to the commodities and metals value chain, benefiting from demand linked to infrastructure, manufacturing and energy transition.

The scheme follows a balanced market-cap approach, with 42.18% allocated to large-cap stocks, providing stability and scale, while 25.42% in mid-caps and 26.84% in small caps add growth potential linked to commodity upcycles.

The fund invests in metal and mining companies that convert commodity demand into earnings growth. This approach allows investors to participate in metal upcycles while avoiding the complexity and volatility of trading commodities directly.

Key holdings are as follows...

Vedanta (7.52%) providing exposure to zinc, aluminium, and copper - metals critical for galvanised steel, power transmission, and industrial manufacturing.

Hindalco Industries (3.91%) a major aluminium and copper producer, supporting demand from infrastructure, renewables, and electric mobility.

NMDC (0.7%) providing iron ore exposure, linked to steel production and construction-led capex.

A SIP-based approach averages entry points across commodity cycles and manage volatility for investors looking to complement diversified equity portfolios with some exposure to metal demand.

#2 SBI Comma Fund

SBI Comma Fund provides diversified exposure to the commodities ecosystem, with a strong tilt toward industrial metals that benefit from infrastructure development, manufacturing activity, and energy transition.

The scheme combines exposure across large-cap (49.52%), mid-cap (17.26%), and small-cap (24.36%) commodity-linked companies.

This spread allows the fund to balance the relative stability of established metal producers with the higher growth potential of smaller, cycle-sensitive firms.

The fund's portfolio reflects a positioning through key metal-linked holdings. Vedanta (4.28%) offers exposure to zinc, aluminium, and copper, all critical for power transmission, galvanised steel and industrial applications.

Hindalco Industries (3.02%) strengthens aluminium and copper exposure, supporting demand from infrastructure, renewables and electric mobility.

Hindustan Copper (1.59%) provides a more direct play on copper, a key metal for electrification and grid expansion.

NMDC (2.22%) anchors iron ore exposure linked to steel and construction-led capex.

From an allocation standpoint, the fund could be considered as a satellite holding within a diversified portfolio.

#3 DSP Natural Resources & New Energy Fund

DSP Natural Resources & New Energy Fund combines exposure to traditional natural resources with themes linked to energy transition and sustainability.

This dual focus makes the fund relevant as investors reassess real-asset and energy-linked opportunities, particularly in metals that support clean energy, infrastructure, and industrial growth.

The fund follows a blended market-cap strategy, with allocations across large (57.49%) and mid-cap (18.51%), resource companies complemented by selective exposure of 7.17%) to smaller players.

This structure supports participation in long-term natural resource and energy-transition themes while helping manage concentration and execution risks.

Within its metals allocation, Hindalco Industries (5.25%) offers exposure to aluminium and copper-both essential for renewable energy systems, electric vehicles, and power infrastructure.

NMDC (3.72%) adds iron ore exposure, linking the portfolio to steel production and long-term infrastructure development.

As with most commodity-oriented themes, this fund could be better suited as a satellite allocation. This approach may help smooth volatility and align exposure with long-term structural trends rather than short-term price movements.

Source: ACE MF

What You Should Know

Metal and commodity-focused funds require a different lens compared to traditional equity categories. Their performance is less about steady compounding and more about how effectively they translate economic cycles, policy shifts, and cost dynamics into earnings growth.

For investors evaluating these funds going into 2026, the emphasis should be on portfolio role, risk tolerance, and investment horizon, rather than short-term return expectations.

Used selectively and reviewed periodically, this segment could add depth to a portfolio without becoming a source of unintended concentration risk.

Treat metal and commodity funds as tactical, long-term allocations-enter gradually, size conservatively, and let diversification do the heavy lifting rather than chasing commodity cycles.

Invest wisely.

Happy investing.

#Table Note: Data as of December 31, 2025
The securities quoted are for illustration only and are not recommendatory
Past performance is not an indicator for future returns.
Returns are on rolling CAGR basis and in %. Direct Plan-Growth option.
Those depicted over 1-Yr are compounded annualised.
Risk ratios are calculated over a 3-year period assuming a risk-free rate of 6% p.a.

Disclaimer: This write up is for information purpose and does not constitute any kind of investment advice or a recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of future returns. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about your risk appetite, do consult your investment consultant/advisor. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Registration granted by SEBI, enlistment as IA with Exchange and certification from NISM no way guarantee performance of the intermediary or provide any assurance of returns to investors.