On August 14, the nonferrous metals sector experienced a midday surge before retreating, with over 3.5 billion yuan in main capital flowing into the sector, ranking first among the 31 Shenwan primary industries. The Huabao Nonferrous Metals ETF (159876), noted for its largest scale and best liquidity* among ETFs tracking the same index, saw its intraday price rise by up to 1.34% before settling at a 0.1% gain. Strong fundamentals combined with low valuations have driven capital to actively seize a rebound opportunity from oversold conditions. As of press time, the ETF saw net subscriptions of 6.6 million shares in real-time, following a single-day capital inflow of 10.64 million yuan yesterday. Over the past 20 trading days, it has accumulated a total of 124 million yuan in net inflows.
Among the constituent stocks, copper leader Jintian Co., Ltd. hit the daily limit up, while rare earth leader China Rare Earth Resources & Technology Co., Ltd. rose over 6%. Zhongxi Rare Earth, Northern Rare Earth, and Shenghe Resources gained more than 2%. Small metals leader Huaxi Nonferrous Metals climbed over 3%, and tungsten leader Xiamen Tungsten Co., Ltd. and gold leader Western Gold also followed the uptrend.
Why has capital been actively flowing into the nonferrous metals sector? This can be broken down from three key dimensions:
Macroeconomic Level: U.S. core inflation for July was moderate, significantly reducing expectations for a Federal Reserve rate hike. According to the U.S. Bureau of Labor Statistics, the July CPI rose 3.4% year-over-year, a slight decline from June's 3.5% and the lowest since March. Core CPI year-over-year growth narrowed from 2.6% to 2.5%. The interest rate swap market currently prices a roughly 50% probability of a rate cut in September, down from about 75% the day before. This cooling of rate hike expectations has pushed down the U.S. dollar and real interest rates on U.S. Treasuries, boosting dollar-denominated nonferrous metals prices and alleviating recession concerns. This has improved demand expectations for industrial metals, benefiting the sector.
Performance Level: As of August 13, among the 60 constituent stocks of the Huabao Nonferrous Metals ETF (159876)'s underlying index, 7 companies have disclosed their 2026 interim results. All reported companies are profitable, with three achieving doubled year-over-year growth in net profit attributable to parent company. Zhongfu Industrial Co., Ltd. leads with a 165.84% increase. The sector, which has been a focus for positive interim earnings guidance, continues to attract market attention.
Valuation Level: The current valuation of the nonferrous metals sector offers a strong safety margin. First, from a cross-industry comparison, the PE (TTM) of the nonferrous metals sector is in the mid-to-low range among Shenwan primary industries, with significantly less valuation pressure than most sectors. Second, from a historical perspective, the PE of the CSI Nonferrous Metals Index is near its three-year median, indicating that future growth expectations have not been overly priced in. Third, comparing domestic and international markets, for example, Zijin Mining Group (A-shares) is valued significantly lower than Southern Copper Corporation (U.S. stocks), highlighting a global pricing discount for A-share nonferrous metals leaders.
The Huabao Index Investment Department suggests that the Huabao Nonferrous Metals ETF (159876) offers a compelling right-side allocation opportunity given its strong fundamentals and low valuations. Overall, the headwinds that caused the sector to pull back since March have largely dissipated. Current commodity prices are stabilizing, supporting corporate earnings. Leading companies still have production growth contributions, and sector profitability is highly certain. With low valuations and high growth certainty, this is a quality window for allocating to the nonferrous metals sector.
Strong earnings expectations and a low-base position set the stage for a potential rebound from oversold levels. Different nonferrous metals have varying levels of prosperity, timing, and drivers, making differentiation inevitable. For those bullish on the sector, a straightforward approach is to use a comprehensive coverage strategy to better capture the sector's beta returns. The Huabao Nonferrous Metals ETF (159876) and its linked funds (Class A: 017140, Class C: 017141) track an underlying index that comprehensively covers copper, aluminum, rare earths, gold, lithium, tungsten, molybdenum, and tin. This full-category coverage allows for better capture of the sector's beta. Additionally, the ETF is a margin trading and short-selling target, serving as an efficient tool for a one-stop investment in the nonferrous metals sector. As of August 11, the ETF had a latest scale of 1.631 billion yuan and an average daily turnover of 104 million yuan year-to-date, making it the largest and most liquid among the three ETFs tracking the CSI Nonferrous Metals Index in the market. Data sourced from the Shanghai and Shenzhen stock exchanges, as of August 14, 2026. Fee note: Investors may be charged a commission of up to 0.5% by their brokerage firms for subscribing or redeeming fund shares. On-exchange trading fees are subject to the actual charges of the securities firm. The ETF does not charge a sales service fee. Risk warning: The Huabao Nonferrous Metals ETF (159876) passively tracks the CSI Nonferrous Metals Index, which was established on December 31, 2013, and published on July 13, 2015. The index's constituent stocks are adjusted periodically according to its rules. Historical backtest performance does not guarantee future index performance. The constituent stocks mentioned in this article are for display purposes only and do not constitute investment advice of any kind, nor do they represent the holdings or trading strategies of any fund under the management company. The fund manager assesses this fund's risk level as R3-medium risk, suitable for investors rated C3 (balanced) and above. Please refer to the sales institution for appropriate matching opinions. Any information appearing in this article (including but not limited to stocks, commentary, forecasts, charts, indicators, theories, or any form of expression) is for reference only. Investors are solely responsible for their own investment decisions. Views, analyses, and forecasts contained herein do not constitute investment advice to readers and the publisher is not liable for any direct or indirect losses arising from the use of this content. Investing in funds carries risks. Past performance does not guarantee future results. The performance of other funds managed by the same company does not guarantee the performance of this fund. Invest with caution. MACD golden cross signal formed; these stocks are performing well!
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