Bottoming out and rebounding, the top-tier brokerage ETF Huabao rises by 1%, with high growth potential and valuation divergence at low levels. Institutions: Pay attention to brokerage allocation opportunities.

On March 27, the Shanghai Composite Index opened lower but then moved higher, with all three major indices rising collectively. The brokerage sector saw active trading; in the morning it dipped at one point to new lows for this round of pullback, then quickly turned positive. After noon it climbed further. The 350-billion-leading brokerage-sector ETF (512000) saw an intraday increase of over 1% at one point, closing up 0.81%, with trading volume exceeding 600 million yuan. Most individual stocks closed higher; China Galaxy and Hunan Finance & Trade (Xiangcai) shares rose more than 2%, while nine stocks including Southwest Securities and China International Capital Corporation each rose more than 1%.

On the news front, Cheng Herong, chief counsel of the China Securities Regulatory Commission, revealed at the Boao Forum for Asia 2026 Annual Conference “Creating a Sound Market Environment and Advocating Long-Term Value Investing” sub-forum that in 2025, the actual incremental market-entry scale of various medium- and long-term funds exceeded 1 trillion yuan. 2026 is the opening year of the “15th Five-Year Plan” period. Under the dual guidance of building a strong financial country and deepening reforms in the capital markets, the brokerage industry’s business momentum is expected to continue rising.

Looking at the present, the brokerage sector is in a divergence phase with “earnings showing high growth potential + valuation staying at a low level.” On the one hand, the continuing and increasingly evident benefits of high-quality development in the capital markets point to the likelihood that activity in the equity market will continue to improve. Proprietary trading, brokerage, investment banking, asset management, and other businesses are expected to drive continued growth in brokerage earnings.

On the other hand, the brokerage sector’s valuation remains at a historic low. As of March 23, the brokerage index’s PE relative to the CSI 300 was only 1.12x, at the lowest 6% percentile over the past 10 years; the brokerage index’s PB relative to the CSI 300 was only 0.82x, at the lowest 2% percentile over the past 10 years.

Orient Securities stated that in the short term, the market is still affected by geopolitical conflicts and market risk appetite has not significantly improved. With the marginal weakening of the impact of overseas disturbances, market risk appetite is expected to recover. The brokerage sector—having a safety margin of “earnings up + valuation down”—is likely to see a valuation recovery. It is recommended to pay attention to the brokerage-sector rebound opportunity after risk appetite picks up.*

Haitong Securities also believes that looking ahead, the brokerage sector has good stability and continuity in earnings, and the factors suppressing capital are expected to ease. With market style moving toward balance amid geopolitical volatility, and with policies increasing support for the capital markets, together with strong earnings and low valuations, it may enter a window period for valuation recovery. Pay attention to strategic allocation opportunities in brokerages.*

When there’s a trend, buy brokerages! Brokerage ETF (512000) and its linked funds (Class A 006098; Class C 007531) passively track the CSI All Shares Securities Companies Index. In one click, you get exposure to 49 listed brokerage stocks—an efficient investment tool for concentrating on leading brokerages while also taking into account smaller and mid-sized ones. Brokerage ETF (512000)’s latest fund size exceeds 35 billion yuan, with average daily trading volume exceeding 1.1 billion yuan within the year. It is a top-tier brokerage-sector ETF in A-shares, with leading size and liquidity.

Reminder: Recent market volatility may be relatively large; short-term gains or losses do not indicate future performance. Investors must invest rationally based on their own available capital and risk tolerance, and pay close attention to position sizing and risk management.

Data sources include the Shanghai and Shenzhen exchanges, publicly available materials, and so on. Brokerage ETF (512000) passively tracks the CSI All Shares Securities Companies Index. The index base date is 2007.6.29, and it was published on 2013.7.15. The annual total return percentages of the CSI All Shares Securities Companies Index for 2021~2025 were -4.95%, -27.37%, 3.04%, 27.26%, and 2.54%, respectively. The composition of index constituent stocks is adjusted in a timely manner according to the index compilation rules; its backtested historical performance does not predict the index’s future performance.

Institutional views sources: Orient Securities 20260323 “How to view the divergence between current brokerage performance and valuation?”; Haitong Securities 20260319 “Is there a rebound opportunity for brokerage stocks?”

ETF fund fee-related disclosures: When investors subscribe or redeem fund shares, the subscription and redemption agent(s) may charge a commission at a rate not exceeding 0.5% of the subscription/redemption amount. Exchange-traded transaction fees are subject to what the securities companies actually charge, and no sales service fee is charged. Linked fund fee-related disclosures: For Huabao CSI All Shares Securities Companies ETF Linked Fund (Class A), the subscription fee rate (front-end load) (for subscriptions) is 1,000 yuan per transaction when the subscription amount is 2 million yuan (inclusive) or more; 0.6% when between 1 million (inclusive) and 2 million; and 1% when below 1 million; the redemption fee rate is 1.5% when the holding period is less than 7 days; 0.5% when holding period is 7 days (inclusive) to 180 days; 0.25% when holding period is 180 days (inclusive) to 1 year; and 0% when holding period is 1 year (inclusive) or more; no sales service fee is charged. For Huabao CSI All Shares Securities Companies ETF Linked Fund (Class C), no subscription fee is charged; the redemption fee rate is 1.5% when the holding period is less than 7 days, and 0% when holding period is 7 days (inclusive) or more; the sales service fee is 0.4%.

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