The rapid advancement of AI technology is solidifying "computing-power synergy" as a global investment consensus, while intense conflicts in regions such as the Middle East have sharply highlighted the close link between energy and security. The complex landscape at the start of the first quarter of 2026 has made investments related to computing power, electricity, and energy both compelling and volatile.
Following the successful listing of the Power ETF Huabao (159146) in January 2026, its feeder fund (026949) commenced its public offering starting today, March 23. Off-exchange investors with an interest in the power sector can now efficiently gain exposure to this theme through the Power ETF Huabao Feeder Fund (026949), positioning themselves to capitalize on strategic assets during this era of transformation.
The Power ETF Huabao Feeder Fund (026949) will primarily invest in its target ETF, the Power ETF Huabao (159146). Both funds closely track the CSI All Share Power Utilities Index (Index Code: H30199). This underlying index is designed to provide diversified exposure across thermal, hydro, wind, nuclear, and solar power generation through its constituent stocks, enabling investors to strategically allocate to quality power assets and achieve a balanced, all-encompassing power sector portfolio.
The index's sample universe is derived from the CSI All Share Index, with a maximum single constituent weight cap of 10%. As of February 28, 2026, the index comprised 57 constituents, structured as a "full power layout": 42% thermal power, 24% green power, 23% hydropower, and 11% nuclear power. This composition captures the diverse investment opportunities within China's energy and power system. The top ten constituents of the index accounted for a combined weight of 48.38%, featuring industry leaders such as China Yangtze Power, China National Nuclear Power, China Three Gorges Renewables, China Energy Investment Corporation, and Yongtai Energy, contributing to the index's strong investment resilience.
As a fundamental utility sector, power demand is less susceptible to economic cycles, making it a stable field. In capital markets, power assets exhibit several favorable characteristics. For instance, hydropower and nuclear power companies often feature stable profits, robust cash flows, and high dividend payout ratios, allowing the power sector to serve as a "safe harbor" during market rotations.
As of February 28, 2026, the CSI All Share Power Utilities Index offered a dividend yield of 2.37%. Furthermore, the index's valuation was at a historically low level, with a trailing price-to-earnings ratio (PE-TTM) of approximately 18 times, placing it in the 44th percentile and near a 10-year low.
Industry experts point out that China's power sector is currently benefiting from three major trends: a shift in electricity consumption growth from secondary to tertiary industries; a transition towards cleaner energy sources; and power market reforms moving from government-set prices to market-based trading. Given the supportive policy environment and deepening reforms, power companies demonstrate compelling value, dividend, and growth attributes.
In the spring of 2026, "computing-power synergy" was formally included in the Chinese government's work report and designated as a key new infrastructure project. Industry analysts note that the AI era is driving explosive growth in data center construction, creating a new growth frontier for the domestic power sector. This trend is gaining global recognition; for example, NVIDIA founder Jensen Huang projected that capital expenditure for data center construction could exceed $1 trillion by 2028.
The sequence is clear: AI development and computing power expansion lead to data center proliferation and massive electricity consumption, resulting in tight power supply, rising demand, and an urgent need for grid upgrades—a scenario already unfolding in regions like Europe and the United States. According to International Energy Agency data, China accounted for 25% of global data center electricity consumption in 2024, the second-largest share worldwide. The agency forecasts that in developed economies, increased electricity demand from data centers will contribute to over 20% of overall power demand growth.
The substantial incremental demand driven by industrial transformation is pushing the power and grid equipment sectors beyond their traditional slow-growth profiles. Since the fourth quarter of last year, the robust performance of the A-share power sector amid market fluctuations reflects strong investor favor. The Power ETF Huabao (159146), which began trading on January 20, 2026, has experienced a significant rally since February, buoyed by its underlying index.
Market observers highlight that while global equities, including major indices and previously high-flying sectors like non-ferrous metals, have experienced substantial volatility due to geopolitical tensions, the power sector has demonstrated relative resilience in secondary market performance. This indicates investor confidence in the sector's fundamentals. Concurrently, the launch of the Power ETF Huabao Feeder Fund (026949) offers fund investors a potentially more favorable entry point compared to earlier, higher cost levels.
Investors should note that recent market volatility may be elevated, and short-term performance is not indicative of future results. It is essential to invest rationally based on individual financial circumstances and risk tolerance, with careful attention to position sizing and risk management.
Fee structure for the Power ETF Huabao Feeder Fund (026949): Subscription fee is 0.3% for amounts below RMB 2 million, and a flat RMB 1,000 for amounts of RMB 2 million or above. Purchase fee follows the same structure. Redemption fees are 1.5% for both individual and institutional investors within 7 days; no fee for individual investors after 7 days. For institutional investors, redemption fees are 1% for 7-30 days, 0.5% for 30-180 days, and nil after 180 days. There is no sales service fee.
Additional ETF-related charges: Brokerages may charge a commission of up to 0.5% for subscribing or redeeming fund units. Trading fees for on-exchange transactions are subject to securities firms' policies. No sales service fee is charged.
Risk Disclosure: The target ETF for the Power ETF Huabao Feeder Fund (026949) is the Power ETF Huabao (159146), which tracks the CSI All Share Power Utilities Index. The index base date is December 31, 2004, and its release date was July 15, 2013. Its annual performance from 2021 to 2025 was +42.52%, -16.39%, -0.98%, +11.86%, and -1.28%, respectively. Index constituents are adjusted per its methodology, and past performance does not guarantee future results. Constituent mentions are for illustrative purposes only and are not investment recommendations or indicative of the fund manager's holdings. This product is issued and managed by Huabao Fund. Distributors are not responsible for investment performance, redemption, or risk management. Investors should read the Fund Contract, Prospectus, and Key Facts Statement to understand the fund's risk-return profile and choose products matching their risk tolerance. Past performance is not indicative of future results. The performance of other funds managed by the manager does not guarantee this fund's performance. Investment in funds carries risks. The manager assesses the risk rating of both funds as R3-Medium Risk, suitable for Balanced (C3) and higher risk-rated investors. Sales agencies provide their own risk assessments based on regulations; investors should follow the suitability matching results provided by their sales agency. Risk ratings may differ between the fund contract and sales agencies due to different assessment criteria. Investors should understand the fund's risks and returns, align investments with their objectives, horizon, experience, and risk capacity, and assume investment risks independently. CSRC registration does not guarantee fund value, prospects, or returns. Investing involves risk; caution is advised.
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