Nearly 10 billion in main funds are buying against the trend! The chemical sector's resilience is evident, with Huabao Fund Chemical ETF (516020) rising over 2% intraday, and lithium batteries and fluorochemical sectors experiencing a collective surge.

As the market experiences a pullback, the resilience of the chemical sector is evident. The chemical ETF Huabao (516020), which reflects the overall trend of the chemical sector, saw its intraday price rise over 2% at one point, but then retreated along with the market, ultimately closing flat.

In terms of constituent stocks, lithium battery stocks surged collectively, and sectors like fluorochemicals also saw significant gains. At the close, Enjie Co., Ltd. soared 4.75%, while both Dongyue Group and Satellite Chemical jumped over 3%. Tianci Materials, New Zhongbang, and Xingyuan Materials rose more than 2%.

Notably, despite a significant market pullback in the past two weeks, the chemical sector has still achieved positive returns this year. Data shows that as of today’s close, the cumulative increase of the chemical ETF Huabao (516020) benchmark index year-to-date is 4.74%, significantly outperforming major A-share indices such as the Shanghai Composite Index (-2.01%) and the CSI 300 Index (-3.29%).

Data source: Wind, with the value range from January 1, 2026, to March 25, 2026. The annual increases and decreases for the detailed chemical indices over the past five complete years are as follows: 2021, 15.72%; 2022, -26.89%; 2023, -23.17%; 2024, -3.83%; 2025, 41.09%. The composition of the index constituents is adjusted in accordance with the index compilation rules, and past performance does not predict future performance.

On the funding side, the chemical sector continued to attract significant capital today. Wind data indicates that as of the close, the basic chemical sector saw a net inflow of main funds amounting to 9.998 billion yuan, ranking first among 30 major CITIC sectors. Over the past five days, the basic chemical sector has accumulated a total inflow of 18.9 billion yuan, ranking second among the 30 major CITIC sectors.

Looking ahead, Kaiyuan Securities points out that under geopolitical conflicts, the high volatility of oil prices has created significant disturbances to market risk appetite, the production and sales rhythm of the chemical industry, and end-demand in the short term. The recent overall weakness of the chemical sector is fundamentally a concentrated release of event risk; after the risk is fully cleared, the sector’s performance will fully return to being driven by the industry’s fundamentals. This geopolitical conflict is expected to add new momentum to the rise of the Chinese chemical industry, with the long-term logic of industry prosperity continuing to strengthen.

How can one seize opportunities in the chemical sector? Utilizing the chemical ETF Huabao (516020) for investment may provide higher efficiency. Public information shows that the chemical ETF Huabao (516020) tracks the CSI Sub-Industry Chemical Theme Index, with the combined weight of the oil & petrochemical and basic chemical sectors exceeding 80%. Off-exchange investors can also invest in the chemical sector through the Huabao Chemical ETF Fund of Funds (Class A 012537/Class C 012538).

Source: Shanghai and Shenzhen Stock Exchanges, etc., as of March 26, 2026.

Note: When investors subscribe to or redeem fund shares, the brokerage firm may charge a commission not exceeding 0.5%, which includes the related fees charged by the securities exchange and registration agency. The chemical ETF does not charge a sales service fee.

The subscription fee rate for the Chemical ETF Fund of Funds Class A is: for amounts under 1 million yuan, 1%; for amounts from 1 million (inclusive) to 2 million, 0.6%; for amounts above 2 million (inclusive), 1,000 yuan per transaction. The redemption fee rate is: within 7 days, 1.5%; from 7 days (inclusive) to 180 days, 0.5%; from 180 days (inclusive) and beyond, 0%.

The redemption fee rate for the Chemical ETF Fund of Funds Class C is 1.5% within 7 days; from 7 days (inclusive) and beyond, 0%. The sales service fee rate is 0.2%.

Note: Wind data shows that according to the Shenwan primary industry classification, as of February 27, 2026, the weight of basic chemicals and oil & petrochemicals in the CSI Sub-Industry Chemical Index is 71.57% and 11.7%, respectively.

Institutional perspective source: Kaiyuan Securities’ March 22, 2026, weekly report on the basic chemical industry, “Chemicals Enter the Strike Zone, Remain Firmly Optimistic About the Chemical Bull Market.”

Risk warning: The chemical ETF Huabao passively tracks the CSI Sub-Industry Chemical Theme Index, with the base date of the index being December 31, 2004, released on April 11, 2012. The constituent stock composition is adjusted according to the index compilation rules, and past performance does not predict future performance. The stocks mentioned in this article are only a factual display of index constituents and do not constitute any stock recommendations, nor do they represent the views of the fund manager or fund investment direction. Any information mentioned in this article (including but not limited to individual stocks, comments, predictions, charts, indicators, theories, or any form of expression) is for reference only, and investors must bear responsibility for any investment decisions made independently. Furthermore, any views, analyses, and forecasts in this article do not constitute any form of investment advice to the reader, nor does it bear any responsibility for direct or indirect losses arising from the use of this content. Investors should carefully read the “Fund Contract,” “Prospectus,” “Fund Product Information Summary,” and other legal documents of the fund to understand the risk and return characteristics of the fund and choose products that match their risk tolerance. Past performance of the fund does not indicate its future performance, and the performance of other funds managed by the fund manager does not guarantee the performance of this fund. According to the fund manager’s assessment, the risk level of the chemical ETF Huabao is rated R3 - medium risk, suitable for balanced (C3) and higher risk investors; suitability matching opinions should be based on the sales agency. Sales agencies (including direct sales agencies of the fund manager and other sales agencies) evaluate the risks of the above funds according to relevant laws and regulations. Investors should pay timely attention to the suitability opinions issued by the fund manager. The suitability opinions from various sales agencies may not necessarily be consistent, and the risk rating evaluation results for fund products issued by fund sales agencies must not be lower than the risk rating evaluation results made by the fund manager. There may be differences in the fund contract regarding the fund’s risk-return characteristics and risk ratings due to different considerations. Investors should understand the risk and return situation of the fund and carefully choose fund products in accordance with their investment objectives, time horizons, investment experience, and risk tolerance, and bear risks independently. The registration of the above funds by the China Securities Regulatory Commission does not indicate a substantive judgment or guarantee regarding the investment value, market prospects, and returns of this fund. Fund investments should be approached with caution.

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