On May 13th, domestic semiconductor stocks underwent a short-term correction, with the majority of individual stocks declining. Among leading weighted components, Hygon Information Technology Co.,Ltd. fell over 5%, SMIC dropped more than 4%, and Cambricon Technologies Corporation Limited declined over 2%. The HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190), which provides comprehensive exposure to the chip industry, saw its on-exchange price fall by 2.55%.
The domestic semiconductor sector had previously shown strong momentum. Year-to-date, the SSE STAR Market Chip Index, which the fund tracks, has gained 48.5%. During this market cycle, it has demonstrated relatively strong offensive elasticity compared to similar semiconductor chip indices.
Note: The SSE STAR Market Chip Index's performance over the last five full calendar years is as follows: 2021: 6.87%, 2022: -33.69%, 2023: 7.26%, 2024: 34.52%, 2025: 61.33%. The index's constituent stocks are adjusted periodically according to its compilation methodology. Its past performance does not guarantee future results.
Following the significant prior gains, questions arise about whether the sector is overheated and what potential remains. Guojin Securities pointed out that while the current market's "crowding" level, measured by the trading volume ratio of the top 5% of stocks, is indeed approaching the levels seen before the market adjustment in late September 2025, there remains a notable gap compared to the forward price-to-earnings ratios of the technology sector at that time. This is because, after stronger-than-expected earnings significantly digested valuations and analysts raised long-term profit forecasts amid technological iterations, there are still stocks within the tech sector that are not considered expensive. These are primarily concentrated in application areas (vertical application software, horizontal general-purpose software) and chip manufacturing segments (analog chip design, digital chip design).
China International Capital Corporation Ltd. (CICC) also stated that the AI thematic trend has not receded. However, the market's pricing focus has shifted from pure capital expenditure expansion to a phase more sensitive to order certainty, profit realization, cash flow pressures, and investment returns. Currently, valuations for cloud service providers and chip-related segments are at relatively low percentiles since 2023 and have not yet reached the elevated levels seen during the two periods of bubble concerns in July 2024 and October 2025.
To position for the chip industry's "super cycle," high-beta instruments are a preferred choice. Public information shows that the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190) and its feeder funds (Class A: 021224, Class C: 021225) passively track the SSE STAR Market Chip Index. While providing balanced allocation and full-chain exposure to the chip industry, the fund maintains a weight exceeding 90% in core areas such as integrated circuits and semiconductor equipment, reflecting high hard-tech content and strong technological barriers.
Data source: Shanghai and Shenzhen Stock Exchanges, etc.
ETF Fee Information: When subscribing for or redeeming fund shares, subscription/redemption agents may charge a commission not exceeding 0.5%, which includes relevant fees charged by stock exchanges and registration institutions. Feeder Fund Fee Information: For the HUABAO SSE STAR Market Chip ETF Feeder Fund A, the front-end subscription fee is 0.5% for subscription amounts below 1 million yuan, 0.2% for amounts between 1 million yuan (inclusive) and 2 million yuan, and a flat fee of 1,000 yuan per transaction for amounts of 2 million yuan (inclusive) and above. The redemption fee is 1.5% for holdings less than 7 days and 0% for holdings of 7 days (inclusive) or more. The HUABAO SSE STAR Market Chip ETF Feeder Fund C does not charge a subscription fee. Its redemption fee is 1.5% for holdings less than 7 days and 0% for holdings of 7 days (inclusive) or more. A sales service fee of 0.2% applies.
Risk Disclosure: The HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND passively tracks the SSE STAR Market Chip Index. The index's base date is December 31, 2019, and its release date is June 13, 2022. This product is issued and managed by Huabao Fund. Selling agencies do not assume responsibility for the product's investment, payment, and risk management. Investors should carefully read the Fund Contract, Prospectus, Fund Product Key Facts Statement, and other legal fund documents to understand the fund's risk-return characteristics and select a product suitable for their own risk tolerance. The fund manager assesses this fund's risk rating as R4 (Medium-High Risk), suitable for investors with an appropriateness rating of C4 and above. The performance of other funds managed by the fund manager does not guarantee this fund's performance. Past fund performance does not indicate future results. Funds carry risks, and investment requires caution! Selling institutions (including the fund manager's direct sales channels and other sales agencies) assess this fund's risk according to relevant laws and regulations. Investors should pay timely attention to the appropriateness opinions issued by the fund manager. Appropriateness opinions from different sales institutions may not necessarily be consistent. The risk rating evaluation results for the fund product issued by fund sales agencies shall not be lower than the risk rating evaluation result made 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 fund's risk-return profile and, considering their own investment objectives, horizon, experience, and risk tolerance, prudently select fund products and bear the risks themselves. 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!
MACD Golden Cross signals have formed, and these stocks are performing well.
Comments