Oil and Gas Theme Funds Accelerate "Gas Pedal" Risk Warning Urgently "Brake" to Cool Down

Due to the escalation of Middle East tensions last weekend, international oil prices surged significantly, and the oil and gas sector in the A-share market has also experienced a collective rally over the past two days.

On March 2nd, the CSI Oil & Gas Industry Index, CSI Oil & Gas Resources Index, and Guozheng Petroleum & Natural Gas Index opened high and closed higher, with gains of 7.63%, 9.18%, and 8.30% respectively. Several on-market oil and gas themed funds, including the Fortune S&P Oil & Gas Exploration and Production Select Industry ETF (QDII) and the Harvest S&P Oil & Gas Exploration and Production Select Industry ETF (QDII), hit the daily limit.

On March 3rd, these three major oil and gas indices continued to open high and rise, closing with increases of 6.77%, 8.33%, and 8.50%. Multiple on-market oil and gas themed funds again hit the daily limit. Amid this situation, these funds frequently issued risk warnings about premium risks and temporary suspension notices to cool the market.

On March 4th, the three indices opened high but declined significantly by the close, with drops of 2.81%, 2.45%, and 2.60%. Related on-market funds also declined collectively.

According to iFinD data from Tonghuashun, Brent crude oil (BRN0Y) experienced substantial gains on three trading days—February 27th, March 2nd, and March 3rd—rising by 3.35%, 7.14%, and 5.43% respectively. On March 3rd, the intraday high reached $85.12. On March 4th, Brent crude (BRN0Y) opened at $82.00, fluctuated upward during the day, and by 3 p.m. Beijing time, increased by 3.30% to $84.09.

As prices rose, oil and gas themed funds also saw significant returns. As of March 3rd, across the market, there were 50 oil and gas themed funds, including 25 passive index funds, 18 QDII equity funds, and 7 QDII commodity funds. The strongest performers this year were the Huatai-PineBridge CSI Oil & Gas Resources ETF, Bosera CSI Oil & Gas Resources ETF, and Yinhua CSI Oil & Gas Resources ETF, with net asset values increasing by 56.86%, 55.97%, and 55.52%, respectively.

Compared to the net asset value increases, some on-market oil and gas funds frequently traded at premiums. From March 1st to the afternoon of March 4th, a total of 10 funds issued 27 premium risk warning notices. The funds with the most warnings were the Southern Oil LOF and Fortune S&P Oil & Gas Exploration and Production Select Industry ETF (QDII), each issuing five notices and experiencing multiple suspensions.

At 9 a.m. on March 4th, Fortune Fund’s Fortune S&P Oil & Gas Exploration and Production Select Industry ETF (QDII) announced that recently, the secondary market trading price was significantly higher than the fund’s net asset value (IOPV), resulting in a large premium. Investors are warned to pay attention to the risk of premium in secondary market trading. Blind investment could lead to substantial losses. To protect investors’ interests, the ETF will be suspended from market open on March 4th until 10:30 a.m. If the premium does not effectively decrease, the fund manager reserves the right to apply for intraday temporary suspension or extend the suspension to alert the market.

Has the premium for the S&P Oil & Gas ETF on the market “cooled down”? On March 2nd, the latest unit net value of Fortune S&P Oil & Gas ETF was 1.1488 yuan, and the closing price on the same day was 1.261 yuan, with a premium of 9.77%. On March 4th, the opening price was 1.248 yuan, down 10.02% from the previous day’s close, then quickly rose to a high of 1.520 yuan, up 9.59%, before sharply falling at the end of the day to close at 1.381 yuan, a decrease of 0.43%.

Regarding future oil price trends, He Ning, an analyst at Kaiyuan Securities, stated that due to the escalation of Middle East tensions, international oil prices may continue to rise.

Several foreign institutions’ analysts, including Citigroup, Goldman Sachs, and J.P. Morgan, have also raised their oil price forecasts. Citigroup has raised its short-term Brent crude oil forecast to $85 per barrel, noting that regional energy infrastructure risks are increasing under the current situation, and Brent crude is expected to trade between $80 and $90 per barrel for at least the next week.

(Edited by: Wen Jing)