Amid escalating tensions in the Middle East, capital is rapidly flowing into resource-focused assets. According to Wind data, on March 2, a total of 1,365 equity ETFs (including cross-border and commodity ETFs) recorded a net outflow of 7.359 billion yuan. In contrast, 11 oil-themed ETFs attracted a net inflow of 5.325 billion yuan on the same day.
On March 3, oil and gas ETFs continued to dominate the list of top gainers. As of the latest update, the Fullgoal S&P Oil & Gas ETF hit the daily limit-up, with a premium rate as high as 20.76%. Other ETFs, including the Harvest S&P Oil & Gas ETF, the China Universal Oil & Gas ETF, the Yinhua Oil & Gas ETF, and the Bosera Oil & Gas ETF, all rose more than 8%.
Additionally, listed open-ended funds (LOFs) such as the E Fund Crude Oil LOF, the Huaan Crude Oil LOF, and the Southern Crude Oil LOF opened with limit-up gains. The Harvest Crude Oil LOF, GF Petroleum LOF, HuaBao Oil & Gas LOF, and the Lionglobal Global Oil & Gas Energy LOF also surged over 9%.
Oil ETFs led the market by a significant margin, driven by geopolitical tensions in the Middle East. Among them, the 11 oil-themed ETFs stood out as the primary targets for capital inflows, recording a total net inflow of 5.325 billion yuan. Specifically, the Guotai Oil ETF led the pack with a single-day net inflow of 3.101 billion yuan, ranking first among all equity ETFs. The Penghua Oil ETF, the Invesco Great Wall Oil & Gas ETF, the Fullgoal Oil ETF, and the China Universal Oil & Gas ETF each attracted over 300 million yuan in net inflows.
Furthermore, the China Universal Energy ETF and the ChinaAMC Petrochemical ETF recorded net inflows of 341 million yuan and 202 million yuan, respectively.
However, on March 2, several on-market crude oil-themed funds saw their premium rates surge. After the market closed, fund managers of products such as the Oil LOF, HuaBao Oil & Gas LOF, Harvest Crude Oil LOF, S&P Oil & Gas ETF Harvest, and Crude Oil LOF E Fund issued risk warnings about high premiums. They cautioned that the secondary market trading prices of these funds were significantly higher than their net asset values, advising investors to carefully assess the risks and make prudent investment decisions. Blindly purchasing at high premiums could lead to substantial losses if prices correct.
Lionglobal Fund noted that the upward momentum of oil prices depends on the dynamics and duration of U.S.-Iran tensions. A prolonged standoff could lift the price floor, representing an upside risk. The key factor is the Strait of Hormuz. Historically, other oil-producing countries have increased output during Middle East conflicts, so transportation remains critical. Higher oil prices benefit Iran but hurt the U.S. through inflation. Given the current situation, a prolonged conflict appears unlikely, and mid-term fundamentals do not support high oil prices, suggesting a potential correction ahead.
The Invesco Great Wall investment research team highlighted that if geopolitical conflicts persist and keep oil prices elevated, three negative impacts should be monitored. First, as a major crude oil importer, China would face rising costs and squeezed profit margins, particularly in sectors like aviation and chemicals. Higher shipping costs could also result. Second, elevated oil prices could fuel global inflation, affecting monetary policies of central banks like the Fed and delaying easing cycles. Third, prolonged conflicts could reshape international order, similar to the bloc divisions seen after the Russia-Ukraine war. With external uncertainties remaining high, the situation requires close observation.
Nonferrous metals ETFs also attracted strong interest, with gold prices rising due to geopolitical tensions. For instance, the Huaan Gold ETF recorded a net inflow of 1.042 billion yuan, while the Harvest Rare Metals ETF and Southern Nonferrous Metals ETF each saw inflows exceeding 800 million yuan. The Bosera Gold ETF, Yongying Gold Stock ETF, Wanjia Industrial Nonferrous Metals ETF, GF Rare Metals ETF, and Dacheng Nonferrous Metals ETF also registered net inflows of over 300 million yuan.
Wang Xiang of Bosera Gold ETF stated that escalating geopolitical risks have increased gold's appeal as a safe-haven asset. If oil prices remain high and reignite inflation expectations, stagflation trades could further lift precious metal prices. However, geopolitical events are unpredictable and often volatile, so gold may experience sharp pullbacks. Short-term performance hinges on geopolitical developments and energy-driven inflation expectations, while long-term trends depend on factors like de-dollarization, central bank gold purchases, and U.S. trade policies. Wang advised investors to adopt a strategic allocation approach rather than chasing short-term sentiment.
From a medium- to long-term perspective, Huaan Fund believes supportive macro factors for gold remain intact, including sustained central bank gold demand amid de-dollarization, pressure on the U.S. dollar's credibility due to fiscal dominance, and systemic risks from fragmented geopolitics. Gold's role in hedging against "international order collapse" and "sovereign currency risks" continues to strengthen.
Despite weak performance in Hong Kong stocks, bargain-hunting activity intensified. On March 2, the Hang Seng Tech Index fell 2.89%, dropping below 5,000 points, yet investors increased buying in related ETFs. The Huatai-PineBridge Hang Seng Tech ETF attracted a net inflow of 1.274 billion yuan, while the E Fund Hang Seng Tech ETF, ChinaAMC Hang Seng Tech Index ETF, and E Fund China Internet ETF each saw inflows exceeding 430 million yuan.
Ran Linghao, senior fund manager of Dacheng Fund's international business department, noted that recent declines in Hong Kong tech stocks stem from changing U.S. liquidity expectations, fundamental pressures on traditional internet giants, and macroeconomic headwinds. Looking ahead, as external risks ease, market focus may return to organic growth. Long-term performance will depend on earnings support, making profit trends a key variable. Consensus forecasts suggest strong profit growth for the Hang Seng Tech Index by 2026. As subsidies phase out and tech companies grow organically, constituent earnings are expected to improve, paving the way for a trend reversal.
In sector-themed ETFs, areas like grid equipment, defense, chemicals, and satellites also saw active trading and significant inflows. Examples include the ChinaAMC Grid Equipment ETF, Guotai Defense ETF, Penghua Chemical ETF, Yongying Satellite ETF, and Fullgoal Defense Leader ETF, each with single-day net inflows exceeding 600 million yuan.
Overall, Caitong Fund expects A-share volatility to increase amid multiple factors but sees clear trends favoring strategic commodities and AI. Investors should balance short-term geopolitical risks with medium- to long-term industry prospects and maintain patience in positioning.
Everbright Prudential Fund believes external factors have limited impact on domestic assets, though overseas expansion paths for Chinese companies may face challenges. Market expectations for March are not pessimistic, with quantitative-driven inflows continuing and policy-supported thematic trades likely to stay active. If trading volume recovers to certain levels and clear peak signals emerge, systematic adjustments may be considered.
Bosera Fund noted that the upcoming National People's Congress session may clarify annual growth targets and stabilization policies, providing guidance for fundamentals. Given moderate economic recovery and recent easing in property policies, further supportive measures are expected. The fund maintains a medium-term optimistic outlook on A-shares and suggests monitoring inflation expectations while adopting a balanced allocation strategy.
