Recent holiday-driven economic activity has led to a broad recovery in China's consumer market. With the upcoming May Day holiday, consumer demand is expected to continue its moderate increase. Mass food products, serving as a stabilizing anchor for household essential consumption, may be approaching a new cyclical turning point following previous adjustments. In this context, established quantitative asset manager FuGuo Fund began issuing the Food ETF (560320) on April 13th. This ETF closely tracks the CSI All Share Food Index and excludes baijiu stocks, focusing instead on essential consumer food sectors, helping investors efficiently gain exposure to core mass food assets.
The Food ETF (560320) tracks the CSI All Share Food Index (H30192.CSI). This index selects constituent stocks from companies classified under the "Food" category within the CSI three-tier industry classification, listed on the Shanghai, Shenzhen, and Beijing exchanges, providing a comprehensive representation of the A-share food sector. Unlike traditional food and beverage indices, the CSI All Share Food Index excludes baijiu stocks in its construction, resulting in a purer industry composition.
According to Wind data as of April 10, 2026, the index's top five sectors by weight are Flavored Fermented Products II, Food Processing, Beverages & Dairy Products, Snack Foods, and Agricultural Product Processing, with weights of 28.0%, 22.2%, 16.4%, 9.8%, and 9.6% respectively. These sectors combine for approximately 86% of the index, offering precise focus on essential food consumption. The index has a total market capitalization of about 1.3 trillion yuan, with an average constituent market cap of approximately 16.49 billion yuan. It includes 4 constituents with market caps exceeding 50 billion yuan and 53 constituents with market caps below 10 billion yuan, blending established leaders with potential high-growth companies, giving the index both scale and growth potential.
From a safety margin perspective, after sufficient adjustment in recent years, the index presents a dual advantage of "low valuation and high dividend yield." Wind data shows that as of April 10th, the index's price-to-earnings ratio is 32.76, sitting at the 41.57% percentile over the past decade. Its current dividend yield is 2.76%, at the 97.25% historical high point for the past 10 years, indicating notable valuation safety margins and attractive dividend returns.
Looking ahead at the index's investment value, against the backdrop of ongoing economic recovery, positive changes in the CPI-PPI gap suggest smoother price transmission mechanisms between upstream and downstream industries, potentially opening a window for profit improvement in the food sector. On one hand, stabilizing upstream raw material prices are effectively easing cost pressures for food processing companies. On the other hand, steadily rising prices for end-consumer goods are enhancing corporate profit margins and pricing power, accelerating the realization of the sector's earnings support thesis. Wind data forecasts year-on-year growth rates for the index's net profit attributable to parent company shareholders of 16.44% for 2026 and 13.64% for 2027, anticipating double-digit growth for two consecutive years, signaling sustained positive industry sentiment and ample momentum for profit recovery.
Beyond the intrinsic value of the index, the ETF's manager, FuGuo Fund, provides assurance for the product's stable operation. As an early participant in quantitative index investing in China, FuGuo Fund established its quantitative investment team in 2009, accumulating over 17 years of extensive index management experience. Furthermore, FuGuo Fund has built a comprehensive ETF product matrix covering core broad-market indices, sector themes, cross-border, strategy, commodity, and fixed-income products, committed to providing investors with one-stop asset allocation tools. The newly issued Food ETF (560320) not only further enriches this ETF lineup but also offers investors an efficient, convenient, and low-cost tool for accessing the essential consumer food sector.
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