Dirty Cheap

Commodity stocks are stirring while tech stumbles...FFGCX is quietly outperforming, but is anyone watching the rotation unfold? What else is hiding in plain sight?

“In markets, as in life, what is out of favor today may well be in demand tomorrow. If you can stomach the wait.” – Chris MacIntosh

There’s a peculiar thing about bottoming processes… by the time anyone admits they’re happening, they’re usually over.

The pain fades from memory, the wreckage gets cleared, and the patient begins to stir… just as everyone else stops watching.

Which brings us to commodity stocks, the unloved stepchildren of global finance.

For over a decade, they’ve been left to rot in the basement while the tech titans partied upstairs.

But here’s the twist: the tech boom is wobbling, and that rumbling you hear in the basement? It’s the comeback.

The Forgotten Fund

Let’s talk about the Fidelity Global Commodity Stock Fund (FFGCX)—a window into the world of energy, metals, and agriculture stocks.

With big names like Exxon, Chevron, Freeport-McMoRan, and Nutrien, FFGCX holds 57 securities and tilts heavily toward energy (40%) and materials (46%), which includes agriculture.

In other words, it’s loaded with real companies that dig, drill, and grow real things.

For years, the fund underwhelmed.

Over the past decade, it returned a modest 6.8% annually.

The last three years? Down 2.1% annually. Not great.

Still, something shifted in 2025.

As of April 17, it’s up 3.0% YTD, outperforming its Natural Resources category, which averaged 1.5%.

In March alone, it gained 2.4% while its peers sat flat. That’s not noise—it’s signal.

When Stuff Costs More, Stocks Follow

To understand the FFGCX story, you have to look at the broader commodity complex…specifically, the CRB Index.

The Thomson Reuters/CoreCommodity CRB Index tracks everything from oil and gas to cotton and copper.

It’s a proxy for the prices of “stuff,” and the fund’s returns tend to mirror it closely.

Over the past decade, the CRB Index has risen just 25% while the S&P 500 doubled.

Since the start of 2025, the CRB is up 1.15%, and the fund’s 3.0% return suggests it’s waking up too.

Pair that with commodities gaining 8.9% in Q1, and you’ve got evidence of a stealthy rebound underway.

Could it be that while everyone is watching AI stocks crash and burn, the real opportunity is rumbling under their feet?

What other signals might we be missing?

Meanwhile, Back in Tech-land…

The Magnificent 7…the AI-fueled juggernauts of the last bull market…are down 24.45% YTD through April 22.

Meanwhile, the S&P 500 Energy Sector (XLE), home to some of the same firms FFGCX owns, is up 6.63%.

Relative outperformance during market volatility? That’s the stuff rotations are made of.

Global oil demand is rising…up 1.2 million barrels per day this year…and OPEC+ production cuts aren’t going anywhere.

Natural gas prices have rallied 15%.

Food prices are climbing too, with the FAO Index up 3% in Q1. All of this flows directly to the bottom lines of companies in FFGCX.

The Great Sector Reversal

For years, the S&P 500 Energy Sector has been buried beneath the Information Tech sector.

From 2010 to 2022, tech returned over 500%, while energy barely broke 50%.

But in Q1 2025, something snapped. XLE outperformed XLK by 15 percentage points. That’s not just mean reversion…it’s a message.

Energy stocks are dirt cheap. Exxon trades at 13x earnings. The energy sector’s forward P/E? Just 11.5.

Compare that to tech’s 28x and sprinkle in a 3.2% dividend yield. Suddenly, holding “dirty” stocks doesn’t seem so foolish.

The Setup of the Century?

There’s a broader backdrop to all of this. Consider:

• Inflation: CPI is running at 2.4% as of March, above the Fed’s 2% target.

• Tariffs: Trump’s back, and so are tariffs, with 25% on Canada/Mexico (10% on oil) and 10% on China, potentially adding 0.5–1% to inflation.

• Underinvestment: Capex in oil and mining is still 30% below 2014 levels.

• Geopolitics: Iran-Israel tensions, Russia-Ukraine, and food export bans aren’t going away.

• The Dollar: The DXY is down 2% YTD. Commodities love a weak dollar.

These ingredients are the kindling for a commodity supercycle. Goldman Sachs reportedly predicts a 20% rise in prices by 2027.

Commodity producers with low debt, low P/E ratios, and fat dividends? They’re the match.

FFGCX: A Contrarian Dream

Today, FFGCX sports an average P/E of 12 and a 2.5% yield.

Not bad for a fund that beat its peers by 1.5 percentage points YTD. And when capital rotates…like it’s starting to…you want to be early.

Don’t just take our word for it.

Bank of America’s April 2025 survey reportedly shows energy and materials as the most overweight sectors in investor portfolios…more than they’ve been in a decade.

Meanwhile, tech allocations hit a five-year low.

The Cliffhanger

The market rarely rings a bell at the bottom…but it does drop breadcrumbs.

FFGCX is quietly outperforming, commodity prices are grinding higher, and capital is rotating.

The public hasn’t caught on yet.

So the question isn’t “why bother with commodity stocks?” It’s “why wouldn’t you?”

Don’t wait for the herd to show up. They’ll be late, as usual.

⭕️ In case you haven’t read our latest premium research, Insider 310…