Possibly affected by the sharp decline in gold and silver, the nonferrous metals sector continued its weak performance today (February 2). The Huabao Nonferrous Metals ETF (159876) opened with its on-market price dropping over 7% at one point, currently down 5.35%, showing a slight narrowing of losses. As of this report, the ETF recorded a net real-time subscription of 10.8 million units, indicating potential capital inflows during the dip.
Among constituent stocks, 15 individual stocks hit the daily limit-down, while Guocheng Mining, Shengxin Lithium Energy, and Gangyan Gaona rose over 2%. Baoti Group and Zhongxi Nonferrous Metals were among the gainers.
On the news front, Trump's newly appointed Fed Chair Warsh previously made hawkish public remarks that sparked market concerns. However, given the current state of the U.S. economy, implementing strongly hawkish policies may prove difficult. Regarding interest rate cut expectations, according to CME FedWatch data, market expectations for the timing of the first rate cut this year remained steady at June both before and after the new chair announcement, with the forecast of two rate cuts for the year also unchanged. Regarding balance sheet reduction expectations, last week's FOMC meeting continued the balance sheet expansion operations initiated since December last year, maintaining a scale of $40 billion per month. Market expectations for "balance sheet reduction" may be premature, with the short-term reality remaining Fed balance sheet expansion. Additionally, Warsh's policy tendencies primarily stem from his historical statements, but as Trump's endorsed candidate—who believes Warsh is better suited to promote Fed reform and rate cuts—the probability of aggressive rate hikes after his appointment appears low.
Industry insiders believe the catalysts for this round of correction have not yet substantially impacted short-term fundamentals, suggesting gold may present oversold rebound opportunities. First, current precious metals implied volatility has reached extreme levels. Referencing the historical pattern after gold's significant retreat in late March 2020 when volatility spiked then declined, a short-term volatility reduction recovery appears promising. Second, market pricing for "rate cuts + balance sheet reduction" may be overly anticipatory. Friday's gold correction was directly catalyzed by Warsh's nomination, with markets expecting him to implement conservative monetary policies promoting "rate cuts + balance sheet reduction" that would strengthen the dollar. However, this correction reflects more the fragility of long positions due to excessive previous gains and heightened sensitivity to negative catalysts, rather than a fundamental shift in basics—as evidenced by the muted reaction in U.S. Treasury markets, which closed essentially flat.
Guosheng Securities argues that supply-demand mismatches, macro easing, and industrial upgrading create共振 effects, suggesting the "nonferrous metals feast" is not a short-term pulse but will sustain high profitability for 3-5 years. While markets generally remain bullish on nonferrous metals prospects, Dongfang Jincheng cautions that short-term risks include speculative capital profit-taking potentially increasing volatility. Huatai Securities recommends moderate allocation to the nonferrous metals sector—representing 10%-20% of one's fund portfolio—to capture upside potential while maintaining risk diversification.
[Nonferrous Metals Momentum Arrives, "Super Cycle" Appears Unstoppable] The Huabao Nonferrous Metals ETF (159876) and its feeder funds (Class A: 017140, Class C: 017141) track a benchmark index comprehensively covering copper, aluminum, gold, rare earths, lithium and other industries. It spans different景气 cycles including precious metals (hedging), strategic metals (growth), and industrial metals (recovery), with full-category coverage enabling better capture of the sector's beta movements. Additionally, as a margin trading security, this ETF provides an efficient tool for one-click allocation to the nonferrous metals sector.
Reminder: Recent market volatility may intensify, with short-term gains/losses not indicating future performance. Investors must make rational decisions based on personal capital status and risk tolerance, paying close attention to position management and risk control.
ETF fee explanation: Subscription/redemption agents may charge commissions up to 0.5% during fund unit transactions, with on-market trading fees subject to securities company rates. ETFs charge no sales service fees. Feeder fund fee structure: Huabao CSI Nonferrous Metals ETF Feeder Fund (Class A) subscription fees are 1,000 RMB/transaction for amounts ≥2 million RMB, 0.6% for 1-2 million RMB, and 1% for <1 million RMB; redemption fees are 1.5% for holdings <7 days, 0% for ≥7 days, with no sales service fees. Huabao CSI Nonferrous Metals ETF Feeder Fund (Class C) charges no subscription fees, with redemption fees of 1.5% for holdings <7 days and 0% for ≥7 days; sales service fee is 0.3%.
Risk disclosure: Huabao Nonferrous Metals ETF and feeder funds passively track the CSI Nonferrous Metals Index (base date 2013.12.31, launched 2015.7.13). Index performance for past five full years: 2021 +35.89%; 2022 -19.22%; 2023 -10.43%; 2024 +2.96%; 2025 +91.67%. Constituent adjustments follow index methodology, with historical performance not indicative of future results. Constituent descriptions herein are for illustration only, not investment advice or representative of fund holdings. Fund manager assesses this fund as R3-medium risk, suitable for balanced (C3) or higher risk profile investors. Suitability assessments subject to selling institutions. All information herein is for reference only, with investors bearing full responsibility for independent decisions. No content constitutes investment advice, and no liability is accepted for direct/indirect losses. Fund investments carry risks—past performance doesn't guarantee future results, and other fund performance doesn't ensure this fund's returns. Invest cautiously.
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