The chemical sector defies the market trend and resists falling, with Huabao Fund's Chemical ETF (516020) turning positive during trading! Major investors have poured in 5.7 billion yuan.

Today (March 23), the market continued to decline sharply, with the chemical sector performing relatively better and resisting the decline. The chemical ETF (516020), which reflects the overall trend of the chemical sector, briefly turned positive during trading. As of the time of writing, the intraday price fell by 0.22%.

In terms of constituent stocks, some stocks in the phosphorus chemical and civilian explosive products sectors led the declines. As of the writing, Hongda Shares dropped over 8%, while BlueXiao Technology, Ruifeng New Materials, Guangdong Hongda, and others fell more than 5%, dragging down the sector.

On the capital side, the basic chemical sector saw a counter-trend increase in major funds. Data shows that as of the writing, the net inflow of main funds into the basic chemical sector exceeded 5.7 billion yuan in a single day, ranking first among 30 primary industries in the CITIC first-level industry classification.

Shanghai Securities pointed out that supply shortages of raw materials are impacting the global energy and chemical markets, leading to a broad increase in chemical product prices. Ongoing geopolitical tensions and blockages in the Strait of Hormuz have caused raw material supply uncertainties, prompting some Asian petrochemical companies to cut production. Rising international oil prices have driven up chemical prices, with widening spreads. The basic chemical sector outperformed the broader market, with sub-industries such as coal chemicals and nitrogen fertilizers showing notable gains.

Looking ahead, Orient Securities noted that recent volatility is mainly due to changing market expectations about the rapid easing of geopolitical tensions. In the short term, more overseas chemical companies may reduce capacity or even halt production. For investors, the further divergence between reality and expectations may create short-term opportunities. More importantly, for industries already in an upward cycle before the war, the supply shortfall caused by the conflict has actually accelerated the progress of their mid- to long-term logic.

How to seize opportunities in the chemical sector? Using the chemical ETF (516020) for strategic allocation may be more efficient. Public data shows that the chemical ETF (516020) tracks the CSI Sub-industry Chemical Industry Theme Index, with combined weights of petroleum, petrochemicals, and basic chemicals accounting for over 80%. Off-market investors can also use the chemical ETF connection funds (Class A 012537 / Class C 012538) to allocate to the chemical sector.

Source: Shanghai and Shenzhen Stock Exchanges, etc., as of March 23, 2026.

Note: When investors subscribe or redeem fund shares, the subscription and redemption agents may charge a commission of up to 0.5%, including related fees charged by stock exchanges, registrars, etc. The chemical ETF does not charge a sales service fee.

The subscription fee for the Chemical ETF Connection A is: below 1 million yuan, 1%; between 1 million (inclusive) and 2 million yuan, 0.6%; above 2 million yuan, a flat 1,000 yuan per transaction. Redemption fees are: within 7 days, 1.5%; between 7 days (inclusive) and 180 days, 0.5%; beyond 180 days, 0%.

The redemption fee for the Chemical ETF Connection C is: within 7 days, 1.5%; beyond 7 days, 0%. The sales service fee rate is 0.2%.

Note: According to Wind data, as of February 27, 2026, the weights of basic chemicals and petroleum petrochemicals in the CSI Sub-industry Chemical Index are 71.57% and 11.7%, respectively.

Risk reminder: The chemical ETF passively tracks the CSI Sub-industry Chemical Industry Theme Index, which was launched on December 31, 2004, and published on April 11, 2012. The index components are adjusted periodically according to the index rules. Its backtested performance does not predict future results. The stocks mentioned are only objective examples of index constituents and do not constitute stock recommendations or reflect the views of fund managers or investment directions. Any information in this article (including but not limited to stocks, comments, forecasts, charts, indicators, theories, or any other forms) is for reference only. Investors are responsible for their own investment decisions. The opinions, analyses, and forecasts in this article do not constitute investment advice and do not hold the author or publisher liable for any direct or indirect losses resulting from the use of this content. Investors should carefully read the fund contract, prospectus, and key information documents to understand the fund’s risk-return profile and choose products suitable for their risk tolerance. Past performance does not predict future results. 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 is R3—medium risk, suitable for balanced (C3) and above investors. Suitability opinions are subject to the sales institutions. Sales institutions (including direct sales by fund managers and other sales channels) evaluate the risk according to relevant laws and regulations. Investors should pay attention to the suitability opinions issued by fund managers. The risk ratings provided by sales institutions may differ and must not be lower than those of the fund manager. The fund contract may specify different risk and return characteristics due to different considerations. Investors should understand the fund’s risk-return profile, consider their own investment goals, time horizon, experience, and risk capacity, and bear the risks themselves. The China Securities Regulatory Commission’s registration of the fund does not imply any judgment or guarantee of its investment value, market prospects, or returns. Investment in funds should be cautious.