Chemical Industry ETF E Fund: A Strategic Tool for Industrial Upgrading Under Dual Circulation
Author: Lychee
Introduction: Under the new development paradigm where domestic circulation plays the leading role while domestic and international circulations reinforce each other, the chemical industry, as a backbone of traditional industries, is undergoing profound upgrades. E Fund Chemical Industry ETF (516570) accurately tracks leading companies in China's chemical sector with low costs and high transparency, providing investors with an ideal tool to participate in industrial transformation and upgrading.
Investment Highlights: Why Choose E Fund Chemical Industry ETF
E Fund Chemical Industry ETF (516570) directly benchmarks against the CSI Chemical Index, tracking the largest and most representative chemical companies. The fund covers leaders in sub-sectors such as petrochemicals, fine chemicals, chemical products, and agricultural chemicals, allowing investors to gain balanced exposure to the entire industry through a single investment.
Compared to directly purchasing individual stocks, the fund effectively diversifies corporate risks while retaining full participation rights in the industry's overall growth. With an annual management fee below 0.5%, it offers a clear cost advantage. Driven by the dual-circulation development pattern, green and low-carbon transformation, and domestic consumption upgrades, E Fund Chemical Industry ETF (516570) helps investors precisely capture structural growth opportunities in the sector.
Strategic Opportunities Under the Dual-Circulation Paradigm
The opportunities for the chemical industry under dual circulation manifest in four dimensions:
Domestic demand upgrades. The sustained growth in demand for high-end fine chemicals and functional chemicals provides broad market space for fine chemical companies.
Manufacturing upgrade needs. Strategic industries such as high-end equipment manufacturing, new energy, and integrated circuits have seen a significant increase in demand for high-performance chemicals. New energy vehicles drive demand for battery separator materials; the photovoltaic industry increases procurement of high-purity silicon materials.
Accelerated import substitution. The importance of supply chain security has become prominent, with domestic chemical products gaining higher recognition. The substitution process for high-end chemicals and key raw materials is speeding up.
Green and low-carbon transformation. The "carbon peak and carbon neutrality" goals are advancing, making green chemicals and low-carbon process companies new sources of competitiveness.
The state has listed the chemical industry as a key foundational sector. The "14th Five-Year Plan" explicitly promotes high-end, green, and intelligent upgrades, creating a more favorable competitive environment for leading companies. Industry leaders, leveraging their technological accumulation, cost advantages, and market positions, achieve sustainable growth.
Core Investment Value and Portfolio Composition
E Fund Chemical Industry ETF (516570) covers the complete ecosystem of the chemical industry:
Petrochemicals control the supply of basic raw materials, with stable market positions, ample cash flow, and strong dividend capabilities. Fine chemicals focus on high-value-added products, benefiting from consumption and industrial upgrades. Chemical products are closely related to various sectors of the national economy, ensuring stable demand. Agricultural chemicals serve agricultural modernization, benefiting from the growing demand for high-end fertilizers and plant protection products.
Most constituent companies have deep technical 积累 and continuous R&D investment, with industry leaders spending 3%-8% of revenue on R&D. Many leading chemical companies exhibit significant dividend characteristics, offering relatively high payout ratios and stable returns for investors.
Through diversified holdings, the fund effectively mitigates single-company risks while retaining full exposure to the industry's growth potential. E Fund Chemical Industry ETF (516570) also exhibits defensive characteristics, showing relative resilience during economic downturns.
Advantages of Passive Index Strategy
Clear cost advantage. Combined management and custody fees typically do not exceed 0.6%, while active funds in the same category often charge over 1.5%, allowing investors to retain more returns. The longer the investment horizon, the more pronounced the compounding effect of cost savings.
Elimination of subjective risks. Strict adherence to the CSI Chemical Index's weighting rules during periodic adjustments minimizes human operational uncertainty, ensuring market-average returns based on the index benchmark. The periodic adjustment mechanism automatically removes companies with deteriorating fundamentals and includes emerging high-quality firms.
High transparency. Investors can clearly see the specific companies held by the fund, their weight allocations, and changes, with no "black box" investment decisions.
The performance trend of E Fund Chemical Industry ETF (516570) is closely linked to the growth trajectory of China's chemical industry. Industry fundamentals, policy support, and domestic demand upgrades all underpin a clear and sustainable upward trend for the sector under the new dual-circulation paradigm.
Risks and Investment Recommendations
Investors should be aware of risk factors: economic cycle fluctuations affecting chemical demand, crude oil price volatility directly impacting corporate profits, policy and regulatory changes, and intensified market competition may all influence fund performance.
A long-term holding strategy is recommended to smooth out volatility risks over time. Allocate the fund's weight in the portfolio scientifically based on personal risk tolerance. Investors with lower risk tolerance may adopt regular investment plans to mitigate market volatility impacts. Those with higher risk tolerance may appropriately increase allocations but should not exceed 30%-40% of total assets.
Conclusion
E Fund Chemical Industry ETF (516570) represents a rational investment philosophy—shifting from short-term excess returns to participating in the long-term realization of national industrial strategies. Against the backdrop of dual circulation, green and low-carbon transformation, and consumption upgrades, the strategic importance of the chemical industry is undeniable.
Through this fund, investors are investing in the national direction of industrial structure optimization, smooth economic circulation, and green and low-carbon transformation. With scientific index tracking, low fees, full industry exposure, stable dividends, and transparent operations, the fund offers investment opportunities combining safety and growth potential. For investors bullish on the industry's long-term development, believing in the upgrade trend, and possessing the patience for long-term holdings, E Fund Chemical Industry ETF (516570) is an ideal tool for building a balanced and promising asset allocation.
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