On March 12, as the broader market weakened and risk appetite cooled, the defense sector followed the downward trend. The core asset of the defense industry, Huabao Military ETF (512810), fell more than 2.5% during the session, marking its second consecutive day of decline. Leading the losses were aerospace and defense component stocks, with Huafeng Technology, Hongdu Aviation, Aero Engine Corporation, and Aerospace Electronics all experiencing significant declines.
Notably, as prices declined, Huabao Military ETF (512810) once again traded at a premium, indicating strong buying interest. Yesterday, the fund's on-market subscription and redemption flows turned positive, suggesting that some investors may be accumulating shares during the dip.
On the news front, according to the draft report on the central and local fiscal budgets for 2026 released on March 5, China's defense expenditure for 2026 is set at 1.909561 trillion yuan, a year-on-year increase of 7%. This marks the fifth consecutive year since 2022 that China's military budget growth has exceeded 7%.
Institutional analysis points out that with the increase in military spending, equipment procurement funds for the Chinese military in 2026 are expected to rise, potentially accelerating the placement of industry orders and injecting new vitality into the defense equipment supply chain.
Recent order announcements from key defense companies reveal clear amounts and focus areas, highlighting a diversified pattern including main battle equipment (precision-guided munitions/air defense radar), unmanned systems产业链, and naval shipbuilding. Notable examples include Guide Infrared's 1.851 billion yuan centralized procurement contract, Haige Communications' 335 million yuan informatization contract, and orders for drones and guidance subsystems from Guanglian Aviation and Ligong Navigation.
[Invest in Defense, Choose the "August 1" Code] Huabao Military ETF (512810) (formerly the National Defense ETF), with the code containing "八一" (August 1), aggregates cutting-edge military technologies across "land, sea, air, and space." It comprehensively covers popular themes such as commercial aerospace, large aircraft, low-altitude economy, satellite navigation, military informatization, and controllable nuclear fusion. Additionally, it is eligible for margin trading and Stock Connect programs, making it an efficient tool for investing in core defense assets.
Data sourced from the Shanghai and Shenzhen stock exchanges and public information.
Note: When subscribing for or redeeming fund shares, subscription and redemption agents may charge a commission of up to 0.5%, which includes fees collected by stock exchanges and registration institutions.
Risk Warning: Huabao Military 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 management company. The composition of the underlying index is adjusted according to its compilation rules. The fund manager assesses the risk level of Huabao Military ETF as R3-Medium Risk, suitable for balanced (C3) and above investors. Any information appearing in this article (including but not limited to stocks,评论, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors are responsible for any independent investment decisions. Furthermore, any views, analysis, or forecasts herein do not constitute investment advice of any kind to readers, and no responsibility is accepted for any direct or indirect losses resulting from the use of this content. Fund investment carries risks; past performance of a fund does not indicate its future performance, and the performance of other funds managed by the fund manager does not guarantee the fund's future performance. Invest cautiously in funds.
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