Is the ASX tech era over or a buying opportunity as gold miners surge and interest rates rise?

Australia’s top tech investors trail the market over the past five and ten years in a dramatic reversal of the consensus trade that the sector was the best place to generate long-term capital growth.

Tech’s implosion comes as gold and old-fashioned miners - favoured by the baby boomer generation - rewrite the wealth playbook, with AI winners emerging among industrial or finance companies not previously considered beneficiaries of the technological revolution.

The dramatic share market rotation has also left investors debating key questions about future winners.

Does a structural shift in response to strong US GDP growth, a weaker US dollar, and accelerating inflation mean the bull run for miners will extend into 2026? And will high-growth tech names rebound, or fall again on worries around AI business model disruption, against a backdrop of rising interest rates?

Fund managers routed

The past six-month tech wreck means the $2 billion, Hyperion Australian Growth Companies Fund, now trails the S&P/ASX 300 Accumulation Index by a whopping 34.5 per cent over the 12 months to January 31.

Over the past five years, one of Australia’s flagship tech funds has been losing to the index by 9.3 per cent, and by 2.2 per cent over the past 10 years.

“The past six months have been a particularly challenging period,” the Brisbane-based fund manager conceded in its January 2026 update.

“The under-performance has been partly driven by a market rotation away from quality structural growth companies toward lower-quality cyclical companies and more speculative opportunities, supported by improving expectations for real economic growth in the US and higher inflation and higher bond yields, particularly in Australia.”

Hyperion said it sold some of its holdings in software companies in line with the recent market collapse to reflect “increased uncertainty” about their future earnings growth, given increased competition from technologies using AI.

However, it also declared it expects it can reverse the shocking 26.8 per cent wipe-out in the fund’s value over the past 12 months.

“Following the recent correction in structural growth stocks, valuation metrics have become increasingly compelling,” it told its whiplashed investors. “We believe the market is under-appreciating the long-term growth and earnings profiles of our companies.”

Elsewhere, the $1.3 billion Ten Cap Alpha Plus Fund run by high-profile growth investor Jun Bei Liu, is also trailing its benchmark the S&P/ASX 200, over the past five years.

“The fragile nature of confidence and constant flip-flopping of views on stocks has made it a difficult environment to navigate,” Ms Liu told investors in a January update. “We have not come out of this volatility unscathed, and it has been a difficult three-month performance patch.”

The shock returns for growth investors come as the S&P/ASX 200 nears a record high of 9115 points, thanks largely to a blue-chip resurgence as the heavyweight banks and miners raced to record valuations over the past year.

Gold, lithium soar

Another curveball leaving many professional investors caught short is the 75 per cent surge in the gold price from $US2860 an ounce this time last year to $US5010oz on Monday.

The wild rally has catapulted the values of small and large gold miners higher across the ASX, which means fund managers with no exposure are getting thumped by the market.

It’s also left many unsure over whether they should continue to dismiss gold on the basis that it pays no income and generates zero profits, or reassess whether the metal’s rise is a symptom of a structural shift linked to worries that the US dollar is losing value.

Lithium is another volatile sector that surged over the final quarter of 2025, as West Australian heavyweight miners Pilbara Miners jumped 67 per cent and IGO Ltd added 60 per cent.

The surge in mining stocks contributed to the First Sentier Concentrated Australian Share Fund, issued by Colonial First State, losing by 14 per cent to the S&P/ASX 300 Accumulation Index over the past year. The $1b fund also trails the index over the past five and 10 years.

Notably, First Sentier’s investment team said it bought an unnamed WA gold miner over the final quarter of 2025, while it watched its positions in slain tech darlings Pro Medicus and Xero sink like stones.

However, the manager declared it thinks the sell-off in tech stocks isn’t structural and an opportunity to jump in.

“Looking ahead, we believe the recent shift has restored significant relative value for structurally growing businesses whose defensive qualities should reassert themselves as investors refocus on fundamentals,” it told investors.

“Cash flow expectations for many quality growth companies remain intact despite mixed near-term economic conditions, and we expect these businesses to regain favour as price-driven under-performance reverses.”