UBS cited some Chinese stocks it said remained “resilient” amid heightened geopolitical tensions between the US and China. Chinese stocks were volatile after tensions between the U.S. and China escalated in February after an alleged spy balloon was shot down in North America. The Swiss bank said in a note to clients on March 13 that it expected more market volatility when the U.S. announced a possible ban on investment in certain Chinese industries. To counter this volatility in investors’ portfolios, UBS has identified stocks it believes have been historically resilient during times of heightened geopolitical tension. In addition, the investment bank said it can determine how much geopolitical concerns are being priced in based on the stocks’ relative valuations to the MSCI China index. Share prices of the following four Buy-rated stocks have changed by an average of less than 3% over the past eight geopolitical events. Hong Kong-listed natural gas distributor China Resources Gas, solar engineering company Zhejiang Jinggong and airline China Aviation Electronics Systems are among the stocks with the lowest volatility amid U.S.-China tensions, according to UBS. Shares of China Resources Gas and Avionics are expected to rise 27% and 33%, respectively, over the next 12 months, according to analysts’ average target price compiled by FactSet. US investors can invest in China Resources Gas and food processor Fujian Sunner through the Global X MSCI China Utilities ETF and MSCI China Consumer Staples ETF. “We remain bullish on the A-share market as it has outperformed during times of heightened geopolitical tensions and is a major beneficiary of excess deposit flows,” said UBS strategists led by James Wang. Stocks that tend to outperform during times of political tension are often domestically dominated, with low foreign ownership, and are stable and defensive. By contrast, UBS said the 20 worst-performing stocks historically during times of geopolitical tension tend to be U.S.-listed, and often in the internet and biotech sectors. The bank also said the indicator is now a notch above the historical average, suggesting that the market has priced in higher levels of geopolitical concerns.