Premium "soaring"！Another crude oil fund temporarily halted during trading, why is capital still flowing in?

Ask AI · Why does capital take different stances toward oil-and-gas ETFs in the U.S. stock market and China’s A-share market?

Within the month, five crude oil funds have already had trading halted intraday due to “overpricing” that ran “too hot.”

On March 25, the iShares S&P Oil & Gas ETF issued a mid-day closing overpricing risk alert and a temporary trading halt announcement. The announcement shows that, as of the close on the morning of March 25, the overpricing premium in the fund’s secondary-market trading price had not effectively fallen. In order to protect investors’ interests, the fund manager applied to the Shanghai Stock Exchange, and the fund would implement a temporary trading halt from the opening of trading on March 25, 2026, through the close that day.

In the announcement, FDC Fund emphasized that the company has the right to, based on the overpricing situation of the iShares S&P Oil & Gas ETF, take measures such as applying to the Shanghai Stock Exchange for an intraday temporary trading halt, extending the halt time, and implementing consecutive halts to warn the market about risks. The specific measures will be subject to the relevant announcement at that time.

Wind data shows that, as of the close on March 25, the overpricing rate of the iShares S&P Oil & Gas ETF was as high as 26.16%, and its trading value on Wednesday was 2.31B yuan. Notably, over the past five trading days, the fund has still maintained a net inflow of capital; its daily net inflow has ranged from 1.29 million yuan to 1.66 million yuan.

Judging from the latest overpricing rates and capital flows of 12 oil-and-gas-themed ETFs, currently only the iShares S&P Oil & Gas ETF and the Teda S&P Oil & Gas ETF maintain net inflows. Over the past five days, their net inflow amounts are 7.3194 million yuan and 81.5429 million yuan, respectively; the other 10 funds all show a discount and net outflow.

Why has capital’s attitude toward different types of oil-and-gas ETFs shown a clear split? Industry insiders analyze that this is closely related to differences in the underlying assets. The two S&P Oil & Gas ETFs mentioned above mainly invest in U.S.-stock-related underlying assets, while the other 10 are more tilted toward China’s A-share market; the difference in allocation direction is further amplified under the current international situation. However, it is important to remind investors that the constituent stocks of the two S&P Oil & Gas ETFs are all overseas listed companies in the oil and gas sector, and they do not directly track the international crude oil price.

The same insiders further emphasized that the current market is driven by capital flows. Once buy-side demand weakens or supply increases, the premium will narrow or even disappear, and those who entered at high levels will bear losses. The risk of the premium falling is extremely high. It is suggested that investors holding related products take timely profits and lock in gains.

In fact, oil-and-gas funds that have been temporarily halted due to an overpricing “fever” are not a lone case. On the afternoon of March 24, the Shenzhen Stock Exchange announced that, because the overpricing in the secondary-market trading price had not fallen on that day, the China Asset Management crude oil LOF and the Teda crude oil LOF were temporarily halted from the opening of trading in the afternoon until the close. And in early March, the Hu’an S&P Global Oil LOF and the Southern crude oil LOF had also experienced emergency intraday suspensions for similar reasons.

A reporter from The Paper, using data from Wind, conducted statistics: as of March 24, the overpricing rates of the China Asset Management crude oil LOF and the Teda crude oil LOF were as high as 57.73% and 55.90%, respectively; the overpricing rates of the Southern crude oil LOF and the Hu’an S&P Global Oil LOF were 49.32% and 28.17%, respectively.

Pipaiwang Wealth Public Fund Products Operation analyst Fangfang Zeng analyzed that the essence of a premium in oil-and-gas funds is that geopolitical situations in the Middle East and other places raise expectations for oil-price increases. This attracts a large amount of short-term capital to rush in and speculate on oil-and-gas theme funds, causing buy orders in the secondary market to be far greater than sell orders. Meanwhile, because these funds’ net asset value updates have a time lag, they cannot reflect the value of underlying assets in real time. As a result, the secondary market’s trading price deviates from the fund’s actual NAV under pressure from capital flows, forming a price pattern dominated by short-term sentiment rather than value support.

“Under the current Middle East situation, the impact on oil-and-gas funds is more likely to show characteristics of a short-term, pulse-like effect. Its persistence depends on whether the conflict spreads to core oil-producing areas and transportation hubs. If the conflict does not spread to major oil-producing areas such as the Persian Gulf or to key crude oil transport corridors, then the boost to oil prices and the driving effect on oil-and-gas funds will be more oriented toward the short term, and the impact may gradually fade away. It is unlikely to completely change the global energy supply-and-demand fundamentals.” Fangfang Zeng said.

Based on the extension of the supply-cut cycle and the reshaping of global energy security logic, Goldman Sachs has this week comprehensively raised its oil price expectations for the next two years, and warned that in extreme cases, oil prices would set fresh historical records—at $147.

The firm expects that this year, the Brent crude oil average price for March to April will reach $110 (previous expectation was $98), which is a sharp increase of 62% versus the full-year average in 2025. At the same time, its full-year average expectation for Brent in 2026 has been raised to $85, while the average for 2027 is maintained at a high level of $80.