Commentary
The Ninepoint Mining Evolution Fund (the Fund) a volatile but positive second quarter of 2026 in a backdrop geopolitical uncertainty and shifting interest rate condition and outlook. The Fund’s commodity mix and investment approach remained largely unchanged. The Fund’s energy exposure (through Ninepoint Energy Fund) remained largely unchanged (~7%) as the conflict in Middle East remained fluid. In Q3, the Fund returned 1.11%, compared to the benchmark return of 8.92%. The underperformance is largely attributed to an underweight position in gold and an overweight potion in lithium, relative to the Index.
As of September 30, 2026 the Fund’s commodity mix remained dominated by precious metals (34% vs the index at 45%), copper (24% vs index at 22%) and uranium (10% vs the index at 4%). In addition, the Fund equity holdings included exposure to rare earths (7.5%) and other critical minerals (7%), while the energy weight (via the Ninepoint Energy Fund) totaled 7% (vs 0% in the index).
NINEPOINT MINING EVOLUTION FUND - COMPOUNDED RETURNS¹ AS OF SEPTEMBER 30, 2026 (SERIES F NPP864) | INCEPTION DATE: OCTOBER 18, 2011
|
|
1M |
YTD |
3M |
6M |
1YR |
3YR |
5YR |
10YR |
INCEPTION |
|
Ninepoint Mining Evolution Fund |
-6.83% |
10.11% |
1.11% |
-4.72% |
17.96% |
19.96% |
13.72% |
6.55% |
4.16% |
|
MSCI World IMI Selected Metals & Mining and Coal & Consumable |
-7.51% |
17.33% |
8.92% |
5.25% |
34.03% |
35.97% |
23.37% |
16.54% |
8.31% |
The commodity complex including precious metals, remained volatile in Q3 2026. Precious metals opened the quarter under pressure, testing and maintaining the $4,000/oz support level in July before rebounding in August as soft US jobs, CPI and PPI data pulled September rate-hike odds down. The positive momentum in gold accelerated in mid-August, when the US Treasury announced it would at least double the size of its long-end liquidity-support buyback. Gold reversed most of its August gains in September as the market digested the much anticipated Fed rate hike.
Copper continue to outperform in Q3 2026. As the White House's Section 232 review of refined copper imports, originally due by June 30, remained unresolved into quarter-end, sustaining a wide COMEX–LME spread and continued stockpiling of metal into US warehouses. Global supply also remained constrained by the disruptions at several large copper mines, while weather related supply disruptions in regions like Chile and higher sulphuric acid cost created new supply headwinds. Copper equities (measured by COPX) outperformed the metal and returned +10% during the quarter.
As a result of our positive long-term outlook for nuclear power growth, the Fund maintained its overweight position in uranium equities. Long-term uranium price continued to climb reaching an all-time high of ~US$96.5/lb in September. Supply uncertainty continues as Kazatomprom cut its 2026 guidance by 10% citing sulfuric acid availability issue. In US, DOE's $17.5 bln loan commitment in June 2026 to fund construction of 10 AP1000 reactors reinforced the long-term nuclear buildout and structural demand tailwind. Despite the positive momentum in the uranium market, uranium equities (as measured by URNM) underperformed the commodity during the quarter, dropping ~8% versus +4% increase in the spot uranium price.
The Fund has continued to invest in a variety of critical minerals, including rare earths as China continued to tighten export controls, placing additional US companies under restriction in June and blocking shipments to EU firms in July. Ex-China supply bottlenecks persisted, particularly for heavy rare earths, while continued US and allied efforts to build out a domestic and ex-China supply chain supported sector sentiment.
At the individual security level, our top contributors for the quarter included gold developer Snowline Gold and producer Predictive Discovery Ltd. Detractors to performance during Q3 2026 included lithium developer Li-FT Power and explorer Q2 Metals, as lithium prices continued their correction since May.
Outlook and Investment Strategy
We continue to believe the metals and mining space is moving into a decade plus bull cycle with the primary demand drivers for the sector now including geopolitics/national security factors as well as continued demand growth from technological advances (including AI) as well continuing demand support from ongoing de-carbonization trends. In the Fund we continue to focus on high-quality names across our preferred metals in order to provide investors with diversified exposure to this evolving landscape. The commodity mix in the Fund remains focused on equities with exposure to metals with positive growth fundamentals.
Nawojka, Henry, Eric
Ninepoint Partners