Is the chemical industry experiencing a "Davis Double Play"? How to invest with one click via ETFs

Author: Cherry

Introduction: A recent research report from UBS (UBS) points out that China's chemical industry is at a critical inflection point of optimizing its competitive landscape and expanding its global market share. Against this macro backdrop, the E Fund Chemical Industry ETF (516570) is undoubtedly an excellent tool for investors to capture the recovery dividends of the industry.

Part 1: Industry Opportunities – Why is now the time to focus on chemicals?

Recently, UBS (UBS) explicitly expressed optimism about China's chemical industry in its research report. The core logic lies in the "optimization of structure" on the supply side and the "pull from emerging demand" on the demand side. As the industry has undergone a prolonged destocking phase, capital expenditures have become more rational. Coupled with stabilizing raw material costs (such as oil and coal prices), the chemical sector has demonstrated strong inflation-hedging properties. The leading companies in the sub-sectors represented by the E Fund Chemical Industry ETF (516570), leveraging globally leading cost control capabilities and R&D efficiency, are now at a time when valuations are at historical lows, presenting a Davis double play opportunity of "fundamental improvement + valuation recovery." For ordinary investors, instead of struggling to pick individual stocks amid commodity volatility, it's better to use the E Fund Chemical Industry ETF (516570) to capture the entire industry's recovery beta returns with one click.

Part 2: Product Map – What chemical/petrochemical ETFs are available in the market?

Currently, there are numerous ETFs focusing on energy and materials, but their purity in targeting midstream chemical manufacturing varies. As the first and leading chemical-themed ETF in the entire market, the E Fund Chemical Industry ETF (516570) has gained widespread market recognition for its professionalism.

Note: Under the current investment consensus of "anti-involution," the E Fund Chemical Industry ETF (516570) selects leading companies with absolute competitive advantages in various sub-sectors and eliminates tail-end capacity. Its investment philosophy highly aligns with the logic of identifying high-quality leaders and rejecting blind expansion.

Part 3: In-depth Analysis – Why focus on the E Fund Chemical Industry ETF (516570)?

After comparing numerous similar products, the E Fund Chemical Industry ETF (516570) demonstrates overwhelming advantages in five core dimensions:

1. Highest Purity: The sub-sector chemical index tracked by the E Fund Chemical Industry ETF (516570) strictly focuses on core segments such as chemical products and basic chemicals, avoiding dilution by new energy or general materials. It is currently the purest tool for representing the performance of the chemical industry.

2. Concentration of Leaders: This product heavily weights leading companies like Wanhua Chemical, Hualu Hengsheng, Salt Lake Co., Ltd., which are "champions" in their respective sub-sectors. As representatives of anti-involution, these companies possess strong pricing power during the process of increasing industry concentration, directly determining the long-term win rate of the E Fund Chemical Industry ETF (516570).

3. Low Cost: The management fee rate of the E Fund Chemical Industry ETF (516570) is 0.50% per year, and the custody fee rate is 0.10% per year. This low-fee structure can save investors considerable friction costs during long-term holding.

4. Good Liquidity: As the "flagship" among similar products, the size and average daily turnover of the E Fund Chemical Industry ETF (516570) are in the first tier of the industry. Whether for large institutional allocations or retail swing trading, it can achieve extremely low impact costs within the E Fund Chemical Industry ETF (516570).

5. Professional Operation: E Fund, as a public fund giant, possesses professional advantages in index tracking accuracy and liquidity maintenance, ensuring the stable operation of the E Fund Chemical Industry ETF (516570).

Part 4: Investment in Practice – How to operate now?

Currently, the price-to-earnings ratio (PE) and price-to-book ratio (PB) of the CSI Sub-sector Chemical Index are at low historical percentiles over the past decade. Allocating to the E Fund Chemical Industry ETF (516570) offers a high margin of safety. For different types of investors, we propose the following strategies:

For trend investors: The bullish logic of the UBS research report is gradually being validated by the market. The E Fund Chemical Industry ETF (516570) can be used as an offensive target in the portfolio, adopting a phased allocation strategy.

For beginners and regular investment users: The chemical industry is highly cyclical. Regular fixed-amount investments in the E Fund Chemical Industry ETF (516570) can effectively smooth holding costs and are the simplest and most scientific way to share in the industry's recovery dividends.

Summary of Core Advantages: Compared to directly purchasing individual stocks, allocating to the E Fund Chemical Industry ETF (516570) can effectively hedge against the "black swan" risk of single investments while enjoying the convenience of one-click access to leading companies and excellent trading liquidity.

Article Summary

At the intersection of global supply chain restructuring and domestic industrial upgrading, the chemical industry is shifting from "scale growth" to "quality breakthrough." With its extremely high industry purity, coverage of core leaders, and low holding costs, the E Fund Chemical Industry ETF (516570) has become the optimal vehicle for capturing the "chemical Davis double play" opportunity described in the UBS research report.

Risk Warnings and Disclaimer

1. Cyclical Volatility Risk: The chemical industry is a strongly cyclical sector and is significantly affected by macroeconomic fluctuations. The net asset value of the E Fund Chemical Industry ETF (516570) may experience substantial fluctuations along with the economic cycle.

2. Commodity Price Risk: Sharp fluctuations in raw material prices may squeeze the profits of midstream enterprises, thereby affecting the performance of the E Fund Chemical Industry ETF (516570).

3. Market Risk: Past fund performance does not indicate future results. Index investing carries tracking error risk.

4. Disclaimer: The above content is for reference only and does not constitute investment advice. Investors should read the fund's legal documents in detail before purchasing the E Fund Chemical Industry ETF (516570) and make prudent decisions based on their risk tolerance. The market carries risks, and investment requires caution.