UBS has named a number of Chinese stocks that it says remain “resilient” amid geopolitical tensions between the United States and China. Chinese stocks were volatile after tensions rose between the US and China over a spy balloon allegedly shot down over North America in February. In a note to clients on March 13, the Swiss bank said that more market volatility is expected when a potential US ban on investment in some Chinese sectors is announced. To combat such changes in investor portfolios, UBS identified stocks that it says have historically been resilient amid heightened geopolitical tensions. In addition, the investment bank said it can determine the extent to which the market has been priced in geopolitical concerns based on the relative value of this stock to the MSCI China index. The four buy-rated stocks below have seen share price changes of less than 3%, on average, over the past eight geopolitical events. According to UBS, Hong Kong-listed gas distributor China Resources Gas, solar engineering company Zhejiang Jinggong and aviation company China Avionics Systems are among the stocks with the lowest volatility amid US-China tensions. Shares in China Resources Gas and China Avionics Systems are also expected to rise 27% and 33% over the next 12 months, according to the average price target of analysts compiled by FactSet. China Resources Gas and food processor Fujian Sunner are available to US investors through the Global X MSCI China Utilities ETF and the MSCI China Consumer Staples ETF. “We continue to favor the A-share market because of its historical performance during heightened geopolitical tensions and as the main beneficiary of excess deposit flows,” said UBS strategist James Wang. The Swiss bank said stocks that tend to outperform during geopolitical tensions tend to be domestically focused, have lower foreign investor ownership, and are stable and defensive. In contrast, UBS said the 20 stocks that have historically performed the worst during geopolitical tensions tend to be listed in the US and are mostly in the internet and biotech sectors. The bank also said that the measure is now higher than its historical average, indicating that the market has priced in high levels of geopolitical concerns.