On Thursday, March 26, Chinese A-shares underwent a volume-shrinking adjustment, with the three major indices retreating from earlier gains to close down over 1%. The Shanghai Composite Index fell below the 3,900-point mark again, while the total trading volume for the two markets dropped below 2 trillion yuan. Market sentiment was weak, with sector rotations lacking strength, and over 4,400 stocks declining across the board.
The banking and chemical sectors provided support against the downward trend. Huabao Fund's 100 billion yuan Bank ETF (512800) defied the market decline, closing higher for the third consecutive day, demonstrating its defensive characteristics in a volatile market. Catalyzed by news such as global chemical giant BASF raising prices, Huabao Fund's Chemical ETF (516020) surged over 2% during the session before paring gains.
As market risk appetite diminished, technology stocks, including fintech and computing power, experienced significant declines, prompting investors to buy on dips. Among them, Huabao Fund's Fintech ETF (159851) fell 3.42%, leading the decline and hitting a new low in the current adjustment phase, while attracting over 100 million units in subscriptions. Additionally, Huabao Fund's ChiNext Artificial Intelligence ETF (159363) plunged in the afternoon, closing down 2.56%, with a net subscription of 44 million units.
Looking ahead, Xiangcai Securities noted that in the short term, conflicts in the Middle East have become a major factor influencing the A-share market. For April, expectations are that the Middle East situation may see changes, while domestic capital markets are likely to enter a phase of volatile bottom-building. The firm recommends focusing on dividend-oriented sectors associated with long-term defensive capital inflows, while awaiting the formation of a bottom in technology sectors related to the "15th Five-Year Plan."
Market Style Rebalancing: Banking Sector Shows Defensive Strength The banking sector closed higher against the market trend, highlighting its defensive attributes. Huabao Fund's 100 billion yuan Bank ETF (512800) saw its price rise 0.25%, marking its third consecutive day of gains and climbing above the 10-day moving average. Most constituent stocks advanced, with Chongqing Rural Commercial Bank, China CITIC Bank, Shanghai Rural Commercial Bank, and Industrial and Commercial Bank of China rising over 1%.
Amid heightened global geopolitical tensions and increased market volatility, the banking sector's defensive characteristics have attracted investor attention. Data from the Shanghai Stock Exchange showed that Bank ETF (512800) recorded a net inflow of 131 million yuan over the past three consecutive days.
Guosheng Securities pointed out that style rebalancing combined with the earnings season presents investment opportunities for bank stocks. On the earnings front, preliminary reports and annual results from listed banks indicate stabilizing and improving revenues for most, with asset quality remaining steady. From a trading perspective, the significant net outflows from index funds earlier this year have temporarily paused, while geopolitical conflicts and related commodity price trends have prompted a rebalancing of risk appetite in capital markets. As a major weighting sector and market stabilizer, the banking sector, after previous adjustments, now sees half of its constituents offering dividend yields above 4.5%, highlighting its current allocation value.
Feng Chencheng, portfolio manager of Bank ETF (512800), believes the banking sector has undergone sufficient adjustments and offers a margin of safety. The current decline in market risk appetite benefits defensive dividend assets like banks. Additionally, pressure on revenue growth in the banking sector is expected to ease by 2026, with stabilizing net interest margins driving improved performance and stable, controllable asset quality indicators, collectively presenting positive factors for a potential upturn.
Bank ETF (512800) and its feeder funds (Class A: 240019; Class C: 006697) passively track the CSI Bank Index, which includes 42 listed banks in the A-share market, serving as an efficient tool for tracking the overall performance of the banking sector. The ETF's latest size exceeds 12 billion yuan, with an average daily turnover of over 800 million yuan since 2025, making it the largest and most liquid among the ten banking sector ETFs in the A-share market.
Nearly 10 Billion in Main Funds Flow In Against the Trend: Chemical Sector Demonstrates Resilience Amid the broader market pullback, the chemical sector showed resilience. Huabao Fund's Chemical ETF (516020), which reflects the overall performance of the chemical sector, saw its price rise over 2% during the session before retreating with the market to close flat.
Among constituents, lithium battery-related stocks rallied significantly, with fluorochemical sectors also among the top gainers. By the close, Yunnan Energy New Material surged 4.75%, Do-Fluoride New Materials and Satellite Chemical both rose over 3%, while Tinci Materials, Capchem, and Senior Technology Material gained over 2%.
Notably, despite significant corrections in the broader market over the past two weeks, the chemical sector has still achieved positive returns year-to-date. Data shows that as of today's close, the benchmark index for Huabao Fund's Chemical ETF (516020) has accumulated a gain of 4.74% year-to-date, significantly outperforming major A-share indices like the Shanghai Composite Index (-2.01%) and the CSI 300 Index (-3.29%).
On the capital flow front, the chemical sector continued to attract main fund inflows today. Wind data shows that by the close, the basic chemical sector saw a net main fund inflow of 9.998 billion yuan for the day, ranking first among 30 CITIC primary industries. Over the past five days, the sector accumulated net inflows of 18.9 billion yuan, ranking second.
Looking forward, Kaiyuan Securities indicated that geopolitical conflicts and high volatility in crude oil prices have caused significant short-term disruptions to market risk appetite, production and sales cycles in the chemical industry, and end-demand. The recent weakness in the chemical sector essentially represents a concentrated release of event-driven risks. Once these risks are fully digested, sector performance will revert to being dominated by its fundamental outlook. The current geopolitical conflicts are expected to add new momentum to the rise of China's chemical industry, strengthening the long-term logic of sector prosperity.
To capture opportunities in the chemical sector, accessing it through Huabao Fund's Chemical ETF (516020) may offer higher efficiency. Public information shows that Chemical ETF (516020) tracks the CSI Segmented Chemical Industry Theme Index, with combined weightings in petroleum石化 and basic chemicals exceeding 80%. Off-exchange investors can also participate through the ETF's feeder funds (Class A: 012537; Class C: 012538).
ChiNext AI Plunges in Afternoon Session; Funds Flow into 159363 on Dips The ChiNext artificial intelligence sector saw widespread declines, with only TFC Optical Communication bucking the trend to rise over 2%, and Philips rising over 1%. IDC computing power leasing and AI application sectors fell across the board, with Beyondsoft leading the decline with a 7% drop, while Tongniu Information, Sinnet, Star Charge, and Capital Online falling over 5%.
Among popular ETFs, Huabao Fund's ChiNext Artificial Intelligence ETF (159363), which ranks first in size and liquidity among its peers, weakened and plunged in the afternoon, closing down 2.56% on thin volume with a turnover of 556 million yuan. As the sector remains in a boxed consolidation phase, capital exhibits characteristics of buying on dips and selling on rallies, with a net subscription of 44 million units today via 159363.
Analysis suggests that current conflict situations have intensified market volatility, suppressing risk appetite and liquidity, while also disturbing expectations for the AI technology industry. However, from a medium to long-term perspective, institutions remain firmly optimistic about investment opportunities in core players within the computing power industry chain.
Tianfeng Securities expressed optimism regarding core manufacturers in the computing power industry chain. Overseas computing power demand remains robust, with financial reports confirming strong AI demand, leading to sustained fundamental resonance. Domestically, the development of local computing power combined with investments from major players like Alibaba and ByteDance suggests sustained high prosperity in the AI and AI data center industry chains. Domestic demand for AI infrastructure is expected to be favorable in 2026, with potential implementation on the application side. Continuous advancements in AI from both China and the US, along with acceleration in inference applications, suggest close monitoring of AI industry dynamics and application opportunities.
Regarding optical modules, Guosheng Securities highlighted insights from the GTC and OFC conferences: on the demand side, prosperity is expected to remain strong until 2030, driven by both scale-up and scale-out; technologically, optical and copper solutions will advance together, with multiple paths like CPO/NPO/XPO coexisting long-term; industrially, the trend towards concentration among leading players is accelerating. Leading optical module companies, with comprehensive technological layouts and supply chain advantages, as core choices for CSP and chip customers, will continue to benefit from global AI growth.
To capture opportunities in AI infrastructure, attention is recommended on the ChiNext Artificial Intelligence ETF (159363), which focuses on leading optical module companies, and its off-exchange feeder funds (Class A: 023407; Class C: 023408), offering direct exposure to growth dividends from the commercial explosion of AI technology. In terms of portfolio composition, the ETF allocates approximately 60% to computing power (including leading optical module/CPO companies) and about 40% to AI applications, positioning it not only as a core "computing power" play but also a genuine representative of "AI applications."
As of February 28, 2026, Huabao Fund's ChiNext Artificial Intelligence ETF held a latest size of 6.745 billion yuan, with an average daily turnover of 885 million yuan over the past six months, ranking first in both size and turnover among 26 ETFs tracking the ChiNext AI Index, STAR AI Index, and STAR Market & ChiNext AI Index.
Note: Fee details are available in respective fund legal documents. Source: Shanghai and Shenzhen Stock Exchanges, data as of March 26, 2026. Reminder: Recent market volatility may be significant; short-term gains or losses do not indicate future performance. Investors must make rational investment decisions based on their own capital situation and risk tolerance, paying high attention to position and risk management.
* Institutional views referenced from: Xiangcai Securities report "Market May Enter Volatile Bottom-Building Phase in April"; Guosheng Securities report March 22, 2026, "Style Rebalancing and Earnings Season Present Opportunities for Bank Stocks"; Kaiyuan Securities Basic Chemical Industry Weekly Report March 22, 2026, "Chemicals Enter the Strike Zone, Remain Firmly Bullish on the Chemical Bull Market"; Tianfeng Securities report "OFC and GTC Highlights: Continuous Innovation in AI Optical Interconnects"; Guosheng Securities report "GTC, OFC Summary: A New Starting Point for Optics".
Risk Disclosure: Bank ETF passively tracks the CSI Bank Index (Base Date: December 31, 2004; Publication Date: July 15, 2013). ChiNext Artificial Intelligence ETF passively tracks the ChiNext Artificial Intelligence Index (Base Date: December 28, 2018; Publication Date: July 11, 2024). Chemical ETF passively tracks the CSI Segmented Chemical Industry Theme Index (Base Date: December 31, 2004; Publication Date: April 11, 2012). Index constituent stocks are adjusted according to the index compilation rules; their historical backtested performance does not indicate future results. Stocks mentioned are for illustrative purposes only as index constituents and are not individual stock recommendations, nor do they represent the investment direction of the fund manager. Any information appearing herein is for reference only; investors are responsible for their own investment decisions. The views, analysis, and forecasts herein do not constitute investment advice, and no liability is accepted for any direct or indirect losses. Investors should read the Fund Contract, Prospectus, and Key Fund Information Document to understand the fund's risk-return profile and choose products matching their risk tolerance. Past performance does not indicate future results; the performance of other funds managed by the manager does not guarantee this fund's performance. Based on the manager's assessment, Bank ETF, Chemical ETF, and Fintech ETF are rated R3-Medium Risk, suitable for Balanced (C3) and above investors; ChiNext Artificial Intelligence ETF is rated R4-Medium-High Risk, suitable for Aggressive (C4) and above investors. Suitability matching opinions are subject to the sales institution. Sales institutions assess these funds per relevant laws; investors should note the manager's suitability opinions. Sales institutions' risk assessments may differ, but cannot be lower than the manager's assessment. Risk descriptions in fund contracts may differ from risk ratings due to different factors. Investors should understand the fund's risks and returns, combine with their investment objectives, horizon, experience, and risk tolerance to choose products carefully and assume risks themselves. CSRC registration does not guarantee the fund's value, prospects, or returns. Fund investment involves risk.
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