Huachuang Securities Zhang Yu: Top 10 Global Investment Themes for March

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Source: Yu Zhong in One

Author: Zhang Yu, Chief Economist at Huachuang Securities, Professional License No.: S0360518090001

Key Views

The overall performance of global major asset classes in March 2026 is: Commodities (21.98%) > US dollar (2.41%) > 0% > Renminbi (-0.47%) > Global bonds (-3.07%) > Global equities (-7.39%).

Report Summary

Ten charts to quickly understand the global asset landscape.

1. Energy inflation and equity sell-offs under the Iran-U.S. conflict. From late February 2026 to late March 2026, geopolitical conflict triggered a typical macro “flight-to-safety” shock. On the commodities side, global diesel prices saw an extreme, asymmetric surge. Asia-Pacific nodes that are highly dependent on sea shipping experienced panic over supply cuts; the gains in Europe and the U.S. and in trade hubs reached 30%-50%. On the equities side, high energy costs directly dealt a heavy blow to global stock markets. Asia-Pacific manufacturing powerhouses that are severely dependent on energy imports lagged the world (South Korea -19.1%, Japan -13.2%), while core broad-based indices in Europe and the U.S. generally pulled back by about 8%. By comparison, China’s A-shares (Shanghai Composite -6.5%) fell less; the underlying logic is that China has smoothed the shock from extreme energy inflation more effectively, demonstrating stronger asset resilience.

2. As risk-off sentiment heats up, global funds show a broad pattern of capital bleeding. From March 19, 2026 to March 25, 2026, global funds saw a significant net outflow of capital; both stock funds and money market funds were hit by large-scale selling. Among them, global equity funds ended seven consecutive weeks of net inflows, with a net outflow of $28.68 billion in a single week; money market funds had a net outflow of $43.04 billion. Even bond funds with a risk-hedging attribute, despite barely maintaining 48 consecutive weeks of inflows, saw the inflow size shrink sharply (down $7.51 billion month-on-month, falling to the 4.7th percentile level since 2025), indicating that micro liquidity was being tightened comprehensively.

3. In the AI era, digital infrastructure ETFs and clean energy ETFs show synchronized resonance. Since the beginning of 2025, the performance of global clean energy ETFs and data center and digital infrastructure ETFs has shown a high degree of synchronized co-movement. The underlying pricing logic behind this tight linkage is that AI computing power creates an enormous demand for electricity. Faced with the increasingly severe power load bottleneck in the U.S. today, tech giants and capital have completely shifted toward pragmatism on the energy supply side. To fill the huge energy gap brought by the rapid expansion of digital infrastructure, the market has directly pushed all generation assets, including clean energy, into a capacity expansion cycle.

4. “Sell the U.S. dollar and buy commodities” becomes a consensus among global fund managers. According to the Bank of America survey of global fund managers in March 2026, 24% of fund managers held a bearish view on the U.S. dollar; compared with the previous month, bearishness toward the U.S. dollar has eased somewhat, but it remains at a relatively low level. Since April 2025, global fund managers have been continuously underweighting the U.S. dollar. In June 2025, the share of U.S. dollar holdings by global fund managers fell to the lowest level in history, and the net de-risking ratio reached 31%. In addition, in March, the net holding ratio of commodities by global fund managers reached 34%, the highest since April 2022.

5. U.S. stocks see a retreat in the tech “seven giants” and a comeback by cyclical sectors. At the end of February 2026, the 100-day rolling correlation coefficient between U.S. tech “seven giants” and the S&P 500 equal-weighted index entered historical lows. Behind this is the fact that, since late October 2025 until before the Iran-U.S. conflict, U.S. stocks exhibited style divergence, and the “seven giants” index that had been leading continued to fall. In sharp contrast, the S&P 500 equal-weighted index, which represents broader market performance, rose against the trend supported strongly by traditional cyclical sectors. This divergence in pricing suggests that capital is withdrawing from the crowded AI and tech track in U.S. equities and moving into traditional cyclical industries with valuation appeal and expectations of recovery.

6. There is a split between deterministic valuation premium and macro discount in how China and U.S. stock markets are priced. Currently, the “valuation-earnings” pricing systems for core assets in China and the U.S. are markedly different. For the S&P 500, valuation and earnings power show a healthy “strong positive correlation.” Its current expected net profit margin is at a historical high of 13%-14%, and the market is assigning a high valuation of 20-26x. This indicates that global capital highly recognizes the earnings moat of the top U.S. equity firms and is willing to pay a steep premium for their long-term “growth certainty.” By contrast, for the CSI 300, although A-share profit margins have rebounded to a reasonable range of 9%-10%, the price-to-earnings ratio remains near the bottom, reflecting that market capital is still watching for the sustainability of the earnings recovery in A-shares.

7. The pricing anchor of emerging market indexes is becoming desensitized to crude oil. The macro pricing anchor for emerging markets is undergoing a profound “new-versus-old” transition. On one hand, the five-year rolling beta of the MSCI Emerging Markets Index to oil prices has fallen significantly. It dropped from the high-volatility range of 0.7 to 0.8 before 2015 to below 0.1 at the start of 2026—traditional “resources-growth” logic is clearly being desensitized. On the other hand, in the same period, the MSCI Emerging Markets Index’s rolling beta to the U.S. dollar index has expanded, rising from a level near 0 in 2016 to below -2.0 today. This divergence indicates that crude oil’s effectiveness as the barometer of emerging-market stock markets has been greatly reduced. The trading logic for emerging market equity indices has shifted from a “commodities cycle” to a “U.S. dollar cycle,” showing very high sensitivity to U.S. dollar liquidity.

8. A-shares exhibit a “dual” nature of both macro allocation value and micro trading pressure. Currently, A-shares are showing a “dual” nature of macro allocation value and micro trading pressure. In the cross-asset allocation dimension, the correlation coefficient between the CSI 300 and the MSCI Global Index is only 0.26, ranking last among major global equity indexes. In the recent global asset shock caused by geopolitical conflict, such extremely low linkage provides international capital with scarce yet efficient portfolio diversification as well as flight-to-safety value. However, the breadth of the A-share market deteriorated somewhat in March. Among nearly 6,000 A-share listings in the Shanghai and Shenzhen markets, the number of stocks with daily “net declines” reached 787, the most extreme level since June 2024.

9. China’s consumer sector may come into a valuation repair as the inflation central tendency rebounds. Looking back at history, the PE valuation premium of China’s consumer sector relative to the MSCI China Index has always shown a strong positive correlation with the year-over-year trend of China’s CPI. In recent years, due to the suppression of CPI growth staying at a persistently low level, market expectations for consumer-end earnings weakened, causing this premium to compress significantly. With macro policies gaining traction and domestic demand gradually stabilizing, the CPI central tendency may see a moderate rebound from a bottoming out. Stabilization of this key macro price signal will become the core catalyst driving “mean reversion” in the consumer sector. It is expected to open up valuation premium space for consumer stocks and deliver a substantive repair.

10. Gold pricing shows a “double” attribute of “risk resonance” and “credit hedging.” In recent years, gold’s macro pricing logic has been undergoing profound restructuring, and its traditional labels of “pure safe haven” and “interest-rate hedge assets” have experienced real changes. Since 2022, the gold price trend has begun to show a strong positive correlation—breaking from historical norms—with emerging-market stocks and U.S. nominal yields. On one hand, the resonance between gold and emerging-market equity markets indicates that, after stripping out the long-term trend, gold’s cyclical fluctuations are deeply tied to global risk appetite and liquidity expansion, showing clear “risk-asset” characteristics. On the other hand, gold’s rise in the same direction as U.S. nominal interest rates overturns the framework of “high interest rates suppressing gold.” It reflects that funds buying gold are not simply for guarding against an economic downturn, but for pricing in the persistence of long-term inflation in advance, as well as deeply hedging the “fiat credit depreciation” triggered by disorderly expansion of U.S. fiscal deficits.

Risk Warning: The Federal Reserve’s monetary policy exceeds expectations; geopolitical risks intensify globally; global trade conflicts intensify.

Table of Contents

Main Text of the Report

I. Ten charts to quickly understand the global asset landscape

(I) Energy inflation and equity sell-offs under the Iran-U.S. conflict

From late February 2026 to late March 2026, geopolitical conflict triggered a typical macro “flight-to-safety” shock. On the commodities side, global diesel prices saw an extreme asymmetric surge. Asia-Pacific nodes that are highly dependent on sea shipping (Philippines 107%, Australia 88%) faced panic over supply cuts; Europe, the U.S., and trade hubs recorded gains of 30%-50%. On the equities side, high energy costs directly crushed global stock markets. Major Asia-Pacific manufacturing powers that are severely dependent on energy imports fell behind globally (South Korea -19.1%, Japan -13.2%), while core broad-based indices in Europe and the U.S. generally pulled back by about 8%. By comparison, China’s A-shares (Shanghai Composite -6.5%) fell less; the underlying logic is that China has smoothed the shock from extreme energy inflation more effectively, demonstrating stronger asset resilience.

(II) As risk-off sentiment heats up, global funds show a broad pattern of capital bleeding.

In the week of March 19, 2026 (March 19~March 25), global funds saw a significant net outflow of capital, and both equity and money market funds encountered large-scale sell-offs. Among them, global equity funds ended seven consecutive weeks of net inflows, with a net outflow of $28.68 billion in a single week; money market funds had a net outflow of $43.04 billion. Even bond funds with a risk-hedging attribute, despite barely maintaining 48 consecutive weeks of inflows, saw the inflow size shrink sharply (down $7.51 billion month-on-month, dropping to the 4.7th percentile level since 2025), indicating that micro liquidity was being tightened comprehensively.

(III) AI-era digital infrastructure ETFs and clean energy ETFs show resonance

Since the beginning of 2025, the performance of global clean energy ETFs and data center and digital infrastructure ETFs has shown a high degree of synchronized co-movement. The underlying pricing logic behind this tight linkage is that AI computing power creates an enormous demand for electricity, forcing energy trading to break through limitations imposed by environmental-protection ideological narratives. Faced with the increasingly severe power load bottleneck in the U.S. today, tech giants and capital have completely shifted to pragmatism at the energy supply end. To fill the huge energy gap caused by the rapid expansion of digital infrastructure, the market has directly pushed all generation assets—including clean energy—into a capacity-expansion cycle.

(IV) “Dump the U.S. dollar and buy commodities” becomes a consensus among global fund managers

According to the Bank of America survey of global fund managers in March 2026, 24% of fund managers held a bearish view on the U.S. dollar; compared with the previous month, bearish sentiment toward the U.S. dollar eased somewhat. Since April 2025, global fund managers have been continuously underweighting the U.S. dollar; meanwhile, in June 2025, the proportion of U.S. dollar holdings by global fund managers fell to the lowest level in history, and the net de-risking ratio reached 31%. In addition, in March, global fund managers’ net holding ratio of commodities reached 34%, the highest since April 2022.

(V) U.S. stocks show a retreat in the tech “seven giants” and a comeback by cyclical sectors

At the end of February 2026, the 100-day rolling correlation between U.S. tech “seven giants” and the S&P 500 equal-weighted index entered historical lows. The decline in correlation signals the exhaustion of the excess returns from tech leadership “crowding.” Behind this is the fact that, from late October 2025 to before the Iran-U.S. conflict, U.S. stocks exhibited style divergence, and the “seven giants” index that had been leading continued to fall. In sharp contrast, the S&P 500 equal-weighted index, representing broader market performance, rose against the trend supported strongly by traditional cyclical sectors. This divergence in pricing indicates that funds are withdrawing from the crowded AI and tech track in U.S. equities and moving into traditional cyclical industries with valuation appeal and expectations of recovery.

(VI) Divergence exists in the pricing logic of China and U.S. equity markets: a deterministic premium and a macro discount

Currently, China and U.S. core assets have markedly different “valuation-earnings” pricing frameworks. For the S&P 500, valuation and earnings power show a healthy “strong positive correlation.” Its current expected net profit margin is at a historical high of 13%-14%, and the market is pricing in a high valuation of 20-26x. This indicates that global capital highly recognizes the earnings moat of top U.S. equities and is willing to pay a large premium for their long-term “growth certainty.” By contrast, for the CSI 300, although A-share profit margins have already rebounded to a reasonable range of 9%-10%, the P/E ratio remains at the bottom, reflecting that market capital is still waiting and watching for the sustainability of the earnings recovery in A-shares.

(VII) The pricing anchor of emerging market indexes shows desensitization to crude oil

The macro pricing anchor for emerging markets is undergoing a profound “new-versus-old” transition. On one hand, the five-year rolling beta of the MSCI Emerging Markets Index to oil prices has fallen significantly, dropping from the high-volatility range of 0.7 to 0.8 before 2015 to below 0.1 at the start of 2026. Traditional “resources-growth” logic is clearly being desensitized. By contrast, the MSCI Emerging Markets Index’s rolling beta to the U.S. dollar index expanded over the same period, rising from a level near 0 in 2016 to below -2.0 today. This divergence indicates that crude oil’s effectiveness as the barometer for emerging market stock markets has been greatly reduced. The trading logic for emerging market equity indices has switched from a “commodities cycle” to a “U.S. dollar cycle,” showing extremely high sensitivity to U.S. dollar liquidity.

(VIII) A-shares exhibit a “dual” nature of both macro allocation value and micro trading pressure

Currently, A-shares are showing a “dual” nature of macro allocation value and micro trading pressure. In the cross-asset allocation dimension, the correlation coefficient between the CSI 300 and the MSCI Global Index is only 0.26, ranking last among major global equity indexes. In recent global asset shocks triggered by geopolitical conflict, this extremely low linkage provides international capital with scarce yet efficient portfolio diversification and flight-to-safety value. However, the breadth of the A-share market deteriorated in March. Among nearly 6,000 underlying names in the Shanghai and Shenzhen markets, the number of stocks with daily “net declines” reached 787, the most extreme level since June 2024.

(IX) China’s consumer sector may see a valuation repair as the inflation central tendency rebounds

Looking back historically, the PE valuation premium of China’s consumer sector relative to the MSCI China Index has always maintained a strong positive correlation with the year-over-year trend of China’s CPI. In recent years, due to suppression from CPI growth staying at a persistently low level, market expectations for earnings on the consumer end have weakened, causing this premium to compress significantly. As macro policies gain traction and domestic demand gradually stabilizes, the CPI central tendency may see a moderate rebound from a bottoming-out phase. Stabilization of this key macro price signal will become the core catalyst driving the consumer sector’s “mean reversion.” It is expected to open up valuation premium space for consumer stocks and deliver a substantive repair.

(X) Gold pricing shows a “double” attribute of “risk resonance” and “credit hedging”

In recent years, gold’s macro pricing logic has been undergoing profound restructuring, and its traditional labels of “pure safe haven” and “interest-rate-hedging asset” have experienced real changes. Since 2022, the gold price trend has started to show a strong positive correlation—breaking historical norms—with emerging market stocks and U.S. nominal yields. On one hand, the resonance between gold and emerging market equity markets indicates that, after stripping out the long-term trend, gold’s cyclical volatility is deeply linked to global risk preferences and liquidity expansion, showing clear “risk asset” characteristics. On the other hand, gold rising in the same direction as U.S. nominal interest rates overturns the framework of “high interest rates suppressing gold,” reflecting that funds buying gold are not solely to guard against an economic downturn, but to price in, in advance, the persistence of long-term inflation, and to deeply hedge the “fiat credit depreciation” caused by disorderly expansion of U.S. fiscal deficits.

II. Appendix: Four perspectives on assets

(I) From the fundamental perspective: rebound in the weekly economic activity index

Huachuang Macro’s weekly economic activity index is a high-frequency indicator that measures the condition of economic fundamentals. It can be used to observe divergences between asset prices and economic fundamentals by looking at the trends of asset prices and the weekly economic activity index. We conducted correlation analysis between the 4-week moving average of Huachuang Macro’s China weekly economic activity index and the 10-year government bond yield, as well as the CSI 300 index, and found that since 2020 the correlation coefficients have been 0.33 and 0.11, respectively.

The copper-to-gold ratio is commonly considered a leading indicator of U.S. Treasury yields. The underlying principle is that copper has industrial attributes and is widely used in fields such as electronics and electrical equipment, home appliances, machinery, and construction; copper demand typically reflects the level of activity in the real economy. Gold, meanwhile, has a function as a store of value and a safe-haven value. The copper-to-gold ratio can serve as an indicator of the market’s preference for risk assets and its perception of safety in U.S. Treasuries.

The junk bonds of U.S. oil and gas development companies show highly consistent return performance relative to the overall junk bond market, as well as close alignment with the oil price trend. Rising oil prices are unfavorable for most industries in the real economy, but they help improve the financial condition of oil and gas development companies and reduce credit spread levels on corporate bonds in that industry.

(II) From the expectations perspective: geopolitical conflict has become the biggest tail risk

According to the Bank of America global fund manager survey report, geopolitical conflict is the biggest tail risk. In February 2026, 25% of fund managers believed the AI technology bubble was the biggest tail risk; next was inflation (20%), and the third was disorderly increases in bond yields (17%). In March 2026, 37% of fund managers believed geopolitical conflict was the biggest tail risk; next was inflation (23%), and the third was private credit (17%).

(III) From the valuation perspective: U.S. stocks’ ERP remains negative

(IV) From the sentiment perspective: market sentiment index rebounds

We synthesize a sentiment index from five indicators, including stock price momentum, demand for hedging/safe assets, the ratio of call options to put options, demand for lower-tier credit bonds, and market volatility, among others. Where stock price momentum is the difference between the CSI 300 index and its 125-day moving average; the demand for safe assets is the difference between the CSI 300 and the Treasury wealth index’s month-on-month performance; the call/put ratio is the ratio of the trading volume of call options to put options on the SSE 50 ETF; demand for lower-tier credit bonds is the difference between the yields of CNI AAA corporate bonds and CNI AA corporate bonds; and market volatility uses the options implied volatility of the SSE 50 ETF.

The 10-year Treasury bond is the benchmark instrument for the risk-free rate. In China’s bond market, there are two most actively traded types: one is the 10-year CDB bond and the other is the 10-year Treasury bond. Their volatility trends are basically consistent, but the magnitude of volatility differs. This deviation can reflect market sentiment in the bond market. In addition, widening spreads between long- and short-end yields and a steep yield curve are the basis for funds’ arbitrage and also the basis for a bond bull market.

III. Appendix: Performance of global and domestic major asset classes

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