The brokerage sector, often seen as a market bellwether, showed notable activity during early trading on June 29th.
The leading Huabao Securities ETF (512000), with assets exceeding 37 billion yuan, saw its on-exchange price surge as much as 2.65% intraday, currently holding a gain of 1.51%.
Major brokerage firms led the advance, with GF Securities and Guotai Haitong rising over 4%, China Merchants Securities climbing more than 3%, and CITIC Securities and Huatai Securities among those gaining over 2%.
Recent Market Activity in the Brokerage Sector
The brokerage segment has been experiencing frequent price movements recently.
Last week, the sector notched three gains over five trading days, with a particularly strong single-day surge exceeding 7% on June 22nd, which triggered a wave of limit-up gains for individual stocks and captured significant market attention.
Key Shift in Market Dynamics
Analysis indicates the most crucial change in market dynamics is the breaking of the previous seesaw effect, where gains in brokerages were often offset by declines in the technology sector.
Currently, brokerages and hard-tech stocks are strengthening in tandem, moving in resonance.
A trading thesis that "buying brokerages is equivalent to buying a basket of discounted tech stocks" is gaining traction and spreading rapidly in the market.
Data Supporting the Trend
Data shows that since the beginning of 2025, 30 listed companies have debuted on the STAR Market.
Calculated based on closing prices as of June 26th, the unrealized gains from mandatory follow-on investments by sponsoring brokerages' subsidiaries have exceeded the IPO underwriting and sponsorship fees for over 70% of these companies.
As all STAR Market IPO projects require mandatory follow-on investment by the sponsor's alternative investment subsidiary, numerous brokerage capital entities have been involved behind high-profile recent listings like Huaxin Technology and Yushu Technology this year.
Expert Commentary on the Sector
Feng Chencheng, fund manager of the Huabao Securities ETF (512000), points out that the underlying assets from investment banking for tech company overseas IPOs and previous follow-on investments and fundraising under the STAR Market IPO system are undergoing a comprehensive revaluation, significantly boosting the technological content of brokerages.
In the style rotation between tech and non-tech sectors, brokerages belong to a traditionally underperforming segment that has a relatively high correlation with technology and innovation enterprises.
Broader Strategic Positioning
Dongwu Securities also noted that brokerages are expanding their presence in the primary market through various channels such as alternative investment subsidiaries, private equity platforms, industrial funds, and innovation/venture capital follow-on investments.
The scale of these assets continues to grow and has become a core incremental asset for the industry.
The profitability of such businesses is no longer solely dependent on short-term secondary market fluctuations but is tied to the long-term growth cycles of strategic emerging industries like hard tech and advanced manufacturing.
Profits are realized through corporate listing exits, equity appreciation, and industrial empowerment returns, effectively smoothing the cyclical volatility of traditional businesses like brokerage and proprietary trading, and substantially enhancing the return on equity (ROE) center for brokerages.
Investment Rationale: High Growth and Attractive Valuations
With high growth prospects and low valuations, the potential for a recovery rally in the brokerage sector warrants attention.
The Huabao Securities ETF (512000) and its feeder funds passively track the CSI All Share Securities Companies Index, providing exposure to 49 listed brokerage stocks in a single transaction.
It is an efficient investment tool that focuses on leading brokerages while also including mid- and small-sized firms.
The ETF's latest fund size exceeds 37 billion yuan, with an average daily turnover of over 1.1 billion yuan year-to-date, ranking it among the largest and most liquid brokerage ETFs in the A-share market.
Important Investor Notices
Investors are reminded that recent market volatility may be significant, and short-term price movements do not indicate future performance.
Investors must make rational investment decisions based on their own financial situation and risk tolerance, paying close attention to position sizing and risk management.
Fund Fee Information
For the ETF, subscription and redemption agents may charge a commission not exceeding 0.5%. On-exchange trading fees are subject to the rates charged by the securities firm, and no sales service fee is charged.
For the feeder funds: The Class A shares have a front-end subscription fee structure: 1% for subscriptions below 1 million yuan, 0.6% for 1-2 million yuan, and a flat 1000 yuan per transaction for 2 million yuan and above.
Redemption fees for Class A are 1.5% for holdings under 7 days, 0.5% for 7-180 days, 0.25% for 180 days to 1 year, and 0% for 1 year and above; no sales service fee is charged.
The Class C shares charge no subscription fee.
Redemption fees for Class C are 1.5% for holdings under 7 days and 0% for 7 days and above; a sales service fee of 0.4% per annum applies.
Risk Disclosure
The Huabao Securities ETF (512000) and its feeder funds passively track the CSI All Share Securities Companies Index.
The index base date is June 29, 2007, and its release date is July 15, 2013.
The index's annual performance from 2021 to 2025 was -4.95%, -27.37%, 3.04%, 27.26%, and 2.54% respectively.
The index constituent stocks are adjusted according to its compilation rules, and its back-tested historical performance does not predict future index performance.
This product is issued and managed by Huabao Fund. Distributors do not assume responsibility for the product's investment, redemption, or risk management.
Investors should carefully read the Fund Contract, Prospectus, Fund Product Key Facts Statement, and other legal documents to understand the fund's risk-return characteristics and choose products suitable for their own risk tolerance.
The fund manager assesses the risk rating of this ETF as R3-Medium Risk, suitable for investors with a suitability rating of C3 and above.
The performance of other funds managed by the fund manager does not guarantee the performance of this fund.
Past fund performance does not indicate future results. Funds carry risks, and investment requires caution.
Sales agencies (including the fund manager's direct sales channels and other distributors) conduct risk assessments of this fund according to relevant laws and regulations.
Investors should promptly pay attention to the suitability opinions issued by the fund manager.
Suitability opinions from different sales agencies may not necessarily be consistent, and the fund product risk rating results issued by fund sales agencies shall not be lower than the risk rating results determined by the fund manager.
The description of the fund's risk-return characteristics in the fund contract and its risk rating may differ due to different considerations.
Investors should understand the risk-return profile of the fund and make prudent fund selection decisions based on their own investment objectives, horizon, experience, and risk tolerance, bearing the associated risks independently.
The China Securities Regulatory Commission's registration of this fund does not indicate a substantive judgment or guarantee of its investment value, market prospects, or returns.
Funds carry risks, and investment requires caution.
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