The Federal Reserve held rates as expected, geopolitical conflicts triggered an overall adjustment in A-shares, with focus on core broad-based funds such as A500 ETF (512050) and others.

On March 19, the three major A-shares indices all declined. In terms of sectors and themes, natural gas and computing power leasing sectors were active against the trend; meanwhile, multiple sectors such as precious metals, small metals, chemical fibers, chemicals, steel, cultivated diamonds, and power grids declined. As of 2:13 PM, the A500 ETF Fund (512050) fell by 1.3%. Among its holdings, stocks like Rongsheng Petrochemical, Tongkun Shares, Industrial Silver Tin, and Zijin Mining led the declines.

On the news front, on March 18, the Federal Reserve announced its interest rate decision, keeping rates unchanged as expected. Fed Chair Powell stated at the press conference that short-term inflation expectations have risen in recent weeks and that they will not cut rates until further inflation improvement is seen. Discussions about the possibility of rate hikes have been mentioned. He also noted that the impact of the Iran conflict on the economy remains uncertain, current inflation progress has stalled, and rising tariffs and oil prices are adding pressure and gradually transmitting to core inflation.

CITIC Securities indicated that in the short term, concerns about inflation will pose greater obstacles to the Fed’s rate cuts, likely delaying the rate cut window to the second half of the year. However, this does not prevent the market from quickly recovering if conflicts ease, with A-shares remaining mainly volatile. Looking ahead, under the backdrop of potential demand resonance between China and the US, PPI may accelerate toward positive territory. Investors are advised to focus on segments with high and sustained price increases, such as power equipment, crude oil, chemicals, precious metals, and coal.

The A500 ETF Fund (512050) helps investors easily position in core A-share assets at low cost. This ETF features low fees (total fee rate of only 0.2%), good liquidity (average daily trading volume over the past year ranks first among peers), and a large scale (nearly 34 billion yuan). It tracks the CSI A500 Index, employing a dual strategy of industry-balanced allocation and top-tier selection, covering all 35 sub-sectors of the CSI, blending value and growth attributes, and resisting style rotation. Compared to the CSI 300, it has an overweight in AI industry chains, pharmaceuticals, medical biology, power equipment, new energy, and other emerging productive sectors, embodying a natural “dumbbell” investment profile.

Investors can consider related products: A500 ETF Fund (512050) [Over-the-counter links (A class: 022430; C class: 022431; Y class: 022979)] and A500 Enhanced ETF Fund (512370).

Daily Economic News