Is the bulk commodity starting to transmit to crude oil?
On Monday, growth stocks were completely slaughtered, especially the commercial aerospace sector, which had already seen significant gains. However, many cyclical and value sectors closed in the green.
The rise in resource commodities, represented by non-ferrous metals, has been signaled multiple times. Recently, silver has surged like a rocket. There are signs that this trend is starting to spread to crude oil, as I mentioned earlier in "Is It Crude Oil's Turn?".
An article shared earlier on the platform mentioned that this year's oil prices, especially the stocks of crude oil producers, might see a significant expectation gap. The market was overly pessimistic before.
A major misconception about going long on crude oil is directly going long on oil prices. Comparatively, I prefer going long on the stocks of crude oil producers. I’ve previously mentioned which funds have higher exposure to the "Three Barrels of Oil."
First is the Guoxin Hong Kong Stock Connect Central SOE Dividend Fund, "Completing the Dividend Puzzle, a Temporary Substitute for the 'Hong Kong Energy ETF'". This is currently the index with the highest exposure to the "Three Barrels of Oil" among tracked products. On Monday, it rose about 1.77%, performing very prominently among dividend-focused styles. Currently, there are many indices in the Hong Kong dividend sector. Recently, the Guoxin Hong Kong Stock Connect Central SOE Dividend Fund, due to its heavy weighting in the "Three Barrels of Oil," has performed much better than the CSI Hong Kong Stock Connect High Dividend Index, which is heavily weighted in banks.
At the same time, since the "Three Barrels of Oil" are listed in both A-shares and Hong Kong stocks, among mainland A-shares, the current highest exposure to the "Three Barrels of Oil" is in the Energy ET. Besides the "Three Barrels of Oil," there are also some coal producers. This year, coal prices won’t be as bad as last year and will likely rebound to a median level, meaning better profitability for companies compared to last year.
Our co-invested "Biaojiu Global Investment Advisory Portfolio" gradually allocated some indices highly correlated with crude oil in September and December last year. Recently, we’ve started to see positive feedback, and this trend may still be unfolding.
(Not investment advice)
$PETROCHINA(00857.HK) $China Southern Crude Oil Fund-A(501018.SH) $MaxWealth CSI Hong Kong Connect China Central-SOEs High Dividend Yield ETF(159266.SZ) $Harvest S&P Oil & Gas Exploration & Production Select Industry ETF(QDII)(159518.SZ)
The copyright of this article belongs to the original author/organization.
The views expressed herein are solely those of the author and do not reflect the stance of the platform. The content is intended for investment reference purposes only and shall not be considered as investment advice. Please contact us if you have any questions or suggestions regarding the content services provided by the platform.
