The market is experiencing volatile movements. On June 10th, the A-share market pulled back once more, with the Shanghai Composite Index falling below the 4,000-point level again. Technology and growth stocks declined broadly, and the defense sector saw widespread losses. The sector's representative ETF, Huabao Defense ETF (512810), was down 1.4%.
Several popular thematic areas, including turbine engines, MLCC (multilayer ceramic capacitors), and commercial aerospace, trended lower. Bolit slumped over 10%, while China Dynamics, Hongda Electronics, and Yingliu Shares fell more than 7%. Aerospace Electronics and China Satellite declined over 3%.
Analysis points out that the overnight slump in U.S. tech stocks may have dampened market sentiment. Coupled with major upcoming events like the SpaceX listing and the mid-month FOMC meeting, expectations for global liquidity tightening have rapidly intensified, leading to heightened recent volatility in tech and growth stocks. However, Founder Securities maintains a generally optimistic outlook for the Q3 market, suggesting that the current adjustment may present a favorable opportunity for positioning.
It is noteworthy that the rebalancing of the underlying CSI Defense Index for the Huabao Defense ETF (512810) will take effect next Monday, June 15th. This rebalancing involves four additions and two deletions, bringing the total number of constituent stocks back to 80. Fushun Special Steel and Liujiu Yier are being removed, while Aerospace Huanyu, Tianyin Electromechanical, Jiachi Technology, and Dongtu Technology are being added.
Specifically, the four new members are all leading companies in the civil-military integration field with market capitalizations in the tens of billions, collectively adding over 30 billion yuan in market value to the index. Aerospace Huanyu focuses on aerospace products and tooling, Tianyin Electromechanical spans home appliance components and radar electronics, Jiachi Technology specializes in the high-barrier niche of stealth materials, and Dongtu Technology is rooted in the underlying technology of industrial internet.
Key Points for Investors
The Huabao Defense ETF (512810), with a code containing "八一", passively tracks the CSI Defense Index. It provides comprehensive exposure to popular themes such as commercial aerospace, MLCC, turbine engines, defense AI, and large aircraft. It is also eligible for margin trading and the Stock Connect programs, serving as an efficient tool for gaining exposure to core defense assets.
Data is sourced from the Shanghai and Shenzhen stock exchanges and public information. The institutional viewpoint is sourced from a relevant securities research report.
Note: When subscribing for or redeeming fund units, subscription/redemption agents may charge a commission of up to 0.5%, which includes relevant fees charged by stock exchanges and registration institutions.
Risk Disclosure: The Huabao Defense ETF passively tracks the CSI Defense Index, which has a base date of December 31, 2004, and was launched on December 26, 2013. The index constituents mentioned are for illustrative purposes only; descriptions of individual stocks do not constitute investment advice in any form, nor do they represent the holdings or trading动向 of any fund managed by the manager. The composition of the underlying index's constituents is adjusted according to its compilation rules. The fund manager assesses the risk level of the Huabao Defense ETF as R3-Medium Risk, suitable for investors with a Balanced (C3) or higher risk profile. Any information appearing in this article is for reference only, and investors are responsible for their own investment decisions. Furthermore, any views, analysis, or forecasts herein do not constitute investment advice of any kind to the reader, and no responsibility is accepted for any direct or indirect losses arising from the use of this content. Fund investment carries risks. The past performance of a fund is not indicative of its future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Invest with caution.
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