ETF Today’s Closing Review | S&P Oil & Gas Related ETFs Lead with Over 60% Cumulative Gain in Q1

Ask AI: How do geopolitical risks affect the continued performance of oil and gas ETFs?

Economic Daily News reporter: Ye Feng Economic Daily News editor: Peng Shuping

In the first quarter, A-shares as a whole saw a pattern of rallying then pulling back, with the three major indices all turning green. From a sector perspective, the oil and gas sector led the gains, driven by disruptions to shipping through the Strait of Hormuz and the resulting rise in international crude oil prices.

As for ETFs, two S&P oil and gas-related ETFs saw cumulative gains of more than 60% in the first quarter. Energy & Chemical ETF CCB, and China-Korea Semiconductor ETF Huatai-Pinebridge followed closely, with cumulative gains of more than 34%.

Some brokerages said that the U.S. and the U.S. coalition’s attacks on Iran have added more uncertainty to energy supply and transportation. They expect that, under the impact of geopolitics, the short-term uptrend in oil prices is relatively certain.

On the downside, affected by the sustained adjustment in Hong Kong stocks, several Hong Kong stock technology-related ETFs recorded cumulative losses of about 20% in the first quarter.

Some brokerages said that recently, global capital allocation has shown marginal shifts, with Hong Kong stocks returning to the focus of overseas institutions. On the one hand, some funds have begun to reassess their allocation to assets in Hong Kong and even consider increasing their Hong Kong footprint through a variety of forms. On the other hand, against the backdrop of geopolitical conflicts and crude oil prices at high levels, the need for redeployment of sovereign funds in the Middle East and reallocation by high-net-worth funds has increased. As Hong Kong stocks serve as the core landing spot for a “low valuation + exposure to China assets,” they have strong appeal.

Daily Economic News