QDII At the midday close on March 25th, Guotai Fund announced that due to the fact that as of the morning close on March 25th, the trading price of the Standard & Poor's Oil and Gas ETF Guotai in the secondary market had not effectively lowered its premium, in order to protect the interests of investors, trading of the fund was temporarily suspended from the afternoon open on March 25th until the close of the day. This was the second time within one day that the Standard & Poor's Oil and Gas ETF Guotai had been suspended. Yesterday, the fund had announced a suspension from the market open to 10:30 am today, but even after resuming trading, the ETF's premium rate remained high, leading ahead of the ETF market at the close. In addition to the Standard & Poor's Oil and Gas ETF Guotai, several other oil and gas LOFs also closed the day with high premiums, some even exceeding 40%, and some products had already been suspended before 10:30 am today. The continuous increase in premiums is not only due to impressive performance attracting funds, but also due to the imbalance between market share supply and demand brought about by the QDII quota. In addition to QDII funds investing in overseas markets, oil and gas themed ETFs investing in A-share markets have performed well this year, becoming the main focus for fund companies, with some even starting their fundraising earlier than planned. However, with oil prices fluctuating at high levels in the short term, stocks in the oil and gas sector are also experiencing high volatility, prompting some market participants to exercise caution in chasing high prices. Suspension after suspension According to Choice data, as of yesterday, the IOPV premium rate of the Standard & Poor's Oil and Gas ETF Guotai had reached 28.75%, setting a new record since the fund was established on November 20, 2023. Even after two suspensions today, the fund's IOPV premium rate remained at 26.24%. How high is this premium? Data shows that as of March 23, the net asset value return of the Standard & Poor's Oil and Gas ETF Guotai since its establishment was 25.9%, meaning that the premium rates today and yesterday have both exceeded the fund's net asset value increase since its inception. The ETF has a year-to-date net asset value return of 36.31%, leading the QDII fund market. Trading volume has also increased in sync, with the peak value reaching 5.126 billion yuan last Friday, and the trading volume of the Standard & Poor's Oil and Gas ETF Guotai exceeding 5 billion yuan yesterday, with a trading volume of 2.307 billion yuan in just one hour today. Signs of this premium cycle began in late February, and to date, the Standard & Poor's Oil and Gas ETF Guotai has issued more than 40 premium risk warning announcements. Since early March, the fund has gradually added temporary suspensions on top of the risk warnings. However, despite this, market interest remains strong, and the overall premium rate of the fund continues to rise. This week, the fund has also shown temporary suspension for three consecutive trading days. Today, Guotai Fund also mentioned in the announcement that they have the right to apply to the Shanghai Stock Exchange for temporary suspension of the fund during trading hours, extend the suspension time, or continue the suspension based on the premium situation of the fund, in order to alert the market to risks. Specific measures will be subject to the official announcement at the time. In terms of onshore funds, as of today's closing, many oil and gas themed funds have appeared to have significant premiums. For example, the aforementioned Crude Oil LOF E Fund had a premium of 41.01% today; JiaShi Crude Oil LOF, Nanfang Crude Oil LOF also had premiums of 40.32% and 34.38% respectively. These funds have also frequently issued premium risk warnings recently. Yesterday, several products, including Crude Oil LOF E Fund and JiaShi Crude Oil LOF, were suspended until 10:30 am today due to the premium. After the market close today, JiaShi Crude Oil LOF, HuaAn Oil Fund LOF, and Standard & Poor's Oil and Gas ETF JiaShi once again issued premium risk warnings. There have also been oil and gas themed funds recently "closing the door to guests." For example, in early March, Huabao Fund announced that, in order to ensure the stable operation of the fund and protect the interests of fund shareholders, they would suspend the subscription and regular fixed investment businesses of the Huabao Oil and Gas LOF from March 6th. Why the high premiums Behind the overall high premiums of oil and gas themed funds, one reason is that geopolitical factors have stimulated the impressive performance of the oil and gas themed funds, leading to a chase for funds. Data shows that as of March 24th, oil and gas themed products dominated the list of fund returns since the beginning of the year. Among them, Nanfang Crude Oil LOF led with a year-to-date net asset value return of 54.64%, while JiaShi Crude Oil LOF and Crude Oil LOF E Fund also exceeded 50% in net asset value return; whereas Huabao Oil and Gas LOF, Standard & Poor's Oil and Gas ETF JiaShi, and Standard & Poor's Oil and Gas ETF Guotai had net asset value returns around 36%. The differentiation in performance is also influenced by the difference in tracked assets. Take Nanfang Crude Oil LOF as an example, the fund is a FOF product that mainly invests in crude oil themed funds, with key investments at the end of last year being in Brent Crude Oil ETF, WTI Crude Oil ETF, and other funds, with performance compared against international oil prices. On the other hand, Standard & Poor's Oil and Gas ETF Guotai tracks the Standard & Poor's Oil and Gas Exploration and Production Selected Industry Index, investing in US stocks in the oil and gas sector. Secondly, the limitation of QDII quotas. Although performance has been strong, many QDII oil and gas themed funds have difficulty in purchasing through the secondary market due to the limits of QDII quotas, making them naturally sought after. For instance, the aforementioned Standard & Poor's Oil and Gas ETF Guotai, is only increasing its fund shares by 1 million units per day recently, which is consistent with the daily cumulative limit of fund shares that can be subscribed. Concentration of oil and gas themed products In contrast to the limitations of QDII funds, oil and gas themed funds investing in domestic markets have become a major focus for fund companies this year. So far, 6 new oil and gas themed funds have been established, most of which are ETFs; meanwhile, Huabao Fund and Ping An Fund's oil ETFs are also in the process of issuance. Industrial Bank RuiXin Fund, GF Fund, and South Fund's CSI Oil and Gas ETFs have also set their issuance schedules, with some products starting to raise funds as early as next Monday. Looking at the approval status of new products, Huaxia Fund and E Fund also submitted materials for the CSI Oil and Gas ETF feeder fund last week, while GF Fund submitted for the off-exchange index fund of CSI Oil and Gas. Existing products continue to attract funds. Data from Choice shows that oil and gas themed ETF products have attracted 14.889 billion yuan in funds so far this year. Among individual products, the largest scale is the CITIC Oil and Gas Industry ETF, with the latest scale at 5.244 billion yuan, compared to the scale at the end of last year.The fund's assets have grown nearly 20 times to 2.55 billion yuan, and the fund's scale once exceeded 10 billion yuan during the year.Although the performance is impressive, there is a divergence in market views on the future of oil prices, and potential risks are also worth noting. "From the recent series of news in the past two days, it is not ruled out that the United States may indeed show signs of wanting a ceasefire, but we have not seen a response from Iran at the moment. Our focus in the future is still on Iran." NH Futures believes that the current news has more impact on expectations of change, and the actual impact on the fundamentals still depends on the navigation situation in the Strait of Hormuz, with oil tankers still passing through sporadically. We are paying attention to changes in navigation. Bosera Fund mentioned that under the catalysis of the outbreak of the US-Iran geopolitical conflict, in the short term, oil prices are still fluctuating at high levels. Ge Junyang, manager of the oil ETF fund at Fortis Fund, mentioned in a recent podcast that currently the correlation between stock prices and oil prices is very high, and the sector is volatile, with considerable risk. The implied oil prices of some upstream oil companies' stock prices are already higher than spot prices, so chasing high prices needs to be cautious. Strategically, the end of last year when oil prices were in the range of fifty to sixty US dollars was a better positioning window; tactically, short-term speculation is extremely difficult, even the countries involved find it hard to predict. Looking at the whole year, wait for a downward adjustment in the center of oil prices and then consider participating, instead of chasing highs in a rapid rise. This article is reprinted from "Cai Lianshe", author: Zhou Xiaoya; GMTEight editor: Feng Qiuyi.