On May 21, the innovative drug sector, which had been under prolonged adjustment, finally staged a rebound. The Pharma ETF (562050), heavily weighted in A-share innovative drug stocks, and the Hong Kong Stock Connect Innovative Drug ETF (520880), which focuses 100% on innovative drug R&D targets, both rose by approximately 2%. Just the previous day, the intraday prices of both ETFs had hit new historical lows.
Focusing on the Hong Kong Stock Connect innovative drug segment, leading heavyweight stocks collectively advanced, with AKESO leading the gains by 6%. BeiGene and Innovent Biologics also rose by over 2%. The Hong Kong Stock Connect Innovative Drug ETF (520880) opened higher and at one point surged nearly 3%, currently up 2.26%. It is expected to potentially end a streak of seven consecutive non-rising trading days.
Notably, during the previous adjustment phase in the Hong Kong Stock Connect innovative drug sector, the 520880 ETF attracted substantial capital inflows on dips. As of the previous day, it had accumulated net inflows of over 710 million yuan in the past 10 days, with its latest fund share count approaching a new high of 6 billion shares.
On the news front, the 2026 ASCO (American Society of Clinical Oncology) Annual Meeting is scheduled to take place from May 29 to June 3. Thirty-four Chinese studies have been selected for oral presentations, and multiple significant clinical data are set to be disclosed, which could potentially catalyze sector sentiment.
Analysts note that in the short to medium term, a bottoming-out and upward trend for innovative drugs is highly probable. Market sensitivity to the sector may increase recently, and technological divergences could lead to a rotation into innovative drug stocks.
For investing in core innovative drug assets at low levels, two key instruments are highlighted: For pure exposure to innovative drugs, the Hong Kong Stock Connect Innovative Drug ETF (520880) is recommended. It allocates 100% to innovative drug R&D companies, with its top ten holdings accounting for over 70% of the portfolio, highlighting its focus on industry leaders. Its underlying assets are Hong Kong-listed stocks, offering high volatility and T+0 trading.
For investors seeking to reduce volatility, the Pharma ETF (562050) is the only on-exchange option with a unique allocation of "70% innovative drugs + 30% traditional Chinese medicine." This combination offers exposure to the high growth of innovative drugs and the high dividends of traditional Chinese medicine stocks.
Note on the "only Pharma ETF (562050)": According to data from the Shanghai and Shenzhen Stock Exchanges, the Pharma ETF is currently the sole ETF tracking the CSI Pharmaceutical Index.
ETF funds do not charge sales service fees. When investors subscribe or redeem fund shares, subscription and redemption agents may charge a commission of up to 0.5%, which includes fees levied by stock exchanges and registration institutions. Detailed fund fee structures are available in the respective fund legal documents.
Risk Disclosure: 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 funds managed by the fund manager. The fund manager assesses the risk level of the Pharma ETF and its feeder fund as R3-medium risk, suitable for balanced (C3) and above investors. The Hong Kong Stock Connect Innovative Drug ETF and its feeder fund are assessed as R4-medium to high risk, suitable for aggressive (C4) and above investors. All information (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors are responsible for their own investment decisions. Furthermore, any views, analyses, or forecasts do not constitute investment advice to readers, and no liability is accepted for any direct or indirect losses arising from the use of this content. The performance of other funds managed by the fund manager does not guarantee the performance of these funds. Past performance is not indicative of future results. Fund investment carries risks.
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