On July 28th, A-share markets experienced a broad pullback, while the banking sector showed strong resilience. China Construction Bank Corporation (CCB) surged over 3% during the session, hitting a new all-time high. Other banks, including Bank of Shanghai, Agricultural Bank of China, and Postal Savings Bank of China, also followed with gains.
The Hua Bao Bank ETF (512800), a major fund with over 10 billion yuan in assets, saw its intraday price rise more than 1%, once again reaching a new high in this rebound cycle. Since the start of July, the banking sector has staged a V-shaped recovery, frequently delivering strong, market-defying performances. The CSI Bank Index has advanced by 8.73% month-to-date (as of July 27th), outperforming the ChiNext Index by more than 26 percentage points, which fell 17.31% over the same period.
As divergence within the tech sector widens, market risk appetite is on the decline, creating a need for a rebalancing of investment styles. Banks, as representatives of stable, dividend-yielding assets, are benefiting significantly from this shift. Data shows that the correlation between the banking and technology sectors is among the lowest across all industries. The daily return correlation coefficient between the Banking Index (Shenwan Primary Industry) and the Wind Technology Broad Index (888012.WI) stands at -0.26, 0.08, and 0.20 for the past 1-year, 3-year, and 5-year periods, respectively, making bank stocks a key component for balanced portfolio allocation in the current market environment.
Furthermore, data from CICC indicates that fund holdings of bank stocks were at a historic low of 1.26% in the second quarter of 2026. Compared to their benchmark index, funds are underweighting the banking sector by 8 percentage points. This suggests significant potential for increased allocation as style rebalancing unfolds.
On the fundamental side, bank operations remain stable, with resilient profitability and generally stable asset quality. It is expected that revenue and profit growth for the second quarter will continue to improve. Net interest margins are projected to be flat or slightly down, while overall performance is set to maintain a steady and positive trajectory. Guosheng Securities notes that the core investment thesis for the banking sector currently focuses on the valuation recovery driven by a rebound in core revenue. The sector combines the strong certainty of profit recovery with high dividend yields, highlighting its compelling risk-reward profile for both offensive and defensive strategies.
The Hua Bao Bank ETF (512800) and its feeder funds (Class A: 240019; Class C: 006697) passively track the CSI Bank Index. The index includes all 42 listed banks in A-shares, offering an efficient tool for capturing the overall performance of the banking sector. With a fund size exceeding 10 billion yuan and an average daily trading volume of over 700 million yuan since the start of 2025, the Bank ETF (512800) is the largest and most liquid among the 10 banking ETFs in A-shares.
Data sources: Shanghai and Shenzhen Stock Exchanges, etc. Institutional view source: Guosheng Securities, July 7, 2026, "Fund Flows Disruptions Don't Alter Fundamentals' Stability; Banking Sector Offers Attractive Allocation Value."
Fee disclosure for the ETF: When subscribing or redeeming fund shares, the subscription and redemption agent may charge a commission of up to 0.5%, which includes fees charged by the stock exchange, registration institution, and others. Fee disclosure for the feeder fund: For the Hua Bao CSI Bank ETF Feeder Fund (Class A), the subscription fee (front-end) is 1000 yuan per transaction for amounts of 2 million yuan or more, 0.6% for amounts between 1 million and 2 million yuan, and 1% for amounts under 1 million yuan. The redemption fee is 1.5% for holdings less than 7 days, 0.5% for holdings between 7 and 180 days, 0.25% for holdings between 180 days and 1 year, and 0% for holdings of 1 year or more. No sales service fee is charged. For the Hua Bao CSI Bank ETF Feeder Fund (Class C), no subscription fee is charged. The redemption fee is 1.5% for holdings less than 7 days, 0.5% for holdings between 7 and 30 days, and 0% for holdings of 30 days or more. The sales service fee is 0.2%.
Risk disclaimer: The Hua Bao Bank ETF (512800) passively tracks the CSI Bank Index, which was established on December 31, 2004, and published on July 15, 2013. The CSI Bank Index's returns over the past five complete calendar years are: 2025, 6.79%; 2024, 34.71%; 2023, -7.27%; 2022, -8.78%; 2021, -4.41%. Its volatility over the past five complete calendar years is: 2025, 14.03%; 2024, 19.34%; 2023, 13.41%; 2022, 18.56%; 2021, 18.63%. The index's constituent stocks are adjusted periodically according to its compilation rules. Past performance is not indicative of future results. The index constituent stocks mentioned in this article are for display purposes only. Descriptions of individual stocks do not constitute any form of investment advice, nor do they represent the holdings or trading activity of any fund managed by the fund manager. The fund manager assesses the risk level of this fund as R3, which is medium risk, suitable for balanced (C3) and above investors. Any information presented in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, or any form of expression) is for reference only. Investors must be solely responsible for their own investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice to readers, and the authors are not liable for any direct or indirect losses arising from the use of this content. Fund investment carries risks. A fund's past performance does not guarantee its future results. The performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. Investing in funds requires caution.
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