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Cailianshe News, July 21 (Reporter Yan Jun)The news of Qiu Dongrong's resignation came out in late spring and landed in midsummer.

On July 21, Zhonggeng Fund announced that Qiu Dongrong will resign as the fund manager of five products including Zhonggeng Value Pilot from July 19, 2024 for personal reasons, and will no longer serve as the deputy general manager of Zhonggeng Fund. Resigning from all managed products and resigning from the company also means that the rumors of Qiu Dongrong's resignation have come true.

His circle of friends was also updated today.

As early as the beginning of May this year, the news that Qiu Dongrong was going to resign spread through the channels. On the 11th of the same month, Zhonggeng Fund announced that it had hired Wu Chenggen and Liu Sheng as fund managers for the Zhonggeng Value Quality One-Year Holding and Zhonggeng Value Leadership funds it manages.

From the industry's perspective, the previous recruitment was to help with the product transition, and the reason for his resignation in July was that the Zhonggeng Hong Kong Stock Connect Fund managed by Qiu Dongrong had an 18-month lock-up period, which expired on July 11.

According to the revised "Registration Rules for Investment Managers of Securities and Futures Institutions" issued by the China Securities Association on November 24, 2023, fund managers are not required to be present in the company unless there are special circumstances.Raised fundsVoluntarily resign during the product fundraising period, closed period (except public REITs) and within one year of managing a public fund product.

After the closed period expired and the fund’s second quarter report was disclosed, Qiu Dongrong’s resignation followed.

The market had anticipated Qiu Dongrong's departure, and the products he managed also experienced a small amount of redemption in the second quarter. Compared with the end of the first quarter, the overall scale of Qiu Dongrong's products shrank by 25.91%. Except for a slight increase in the value scale of Zhonggeng Hong Kong Stock Connect, the scales of other products all shrunk to varying degrees.

It is worth noting that this change of Qiu Dongrong only involves products and company positions, and does not involve equity. Qiu Dongrong holds 9.7292% of the shares of Zhonggeng Fund and is still the company's fourth largest shareholder.

Qiu Dongrong's circle of friends reviewed the six-year development and wished the company well as a shareholder

When announcing Qiu Dongrong's resignation, Zhonggeng Fund released an open letter on its official Weibo account titled "Gathering Value and Starting Again: A Letter from Zhonggeng Fund to Investors". Qiu Dongrong forwarded the letter and expressed his gratitude to all parties including holders, partners, companies and colleagues.

He reviewed the company's six-year development and said that he was very honored to participate in, witness and accompany the company from the establishment of the strategic development positioning of "Zhonggeng Fund, deep cultivation of value, and only value investment" before its establishment, to the continuous implementation and realization over the past six years, and he was proud of the process.

As one of the founding team members of Zhonggeng Fund, he said that they have experienced a tortuous growth process together in the past six years, and the value investment strategy system based on uncertainty pricing has also experienced constant challenges and continuous evolution. In the face of an uncertain market, Zhonggeng is also constantly moving forward bravely and continuously challenging new sources of excess returns. In terms of marketing and customer service, it always adheres to the fundamental starting point of "real returns for investors", and hopes to improve the returns of holders and reduce risks through counter-trend marketing and strict purchase restrictions at high levels.investment risk。

Finally, he said that although he resigned as fund manager for personal reasons, as one of the tens of millions of holders, he wished the company's development well.

Regarding the departure of the core figures, Zhonggeng Fund issued an open letter to explain the departure.

At the beginning of the open letter, Zhonggeng Fund told investors that although the fund managers of related products have changed, what remains unchanged is: unswerving development direction, consistent original intention, constantly evolving investment strategy system, and proactive investment team.

Regarding Qiu Dongrong's departure, Zhonggeng actively stated that "even if I have thousands of words to say, what I want to express most is gratitude."

First of all, I would like to thank the holders for their support and trust.Zhonggeng Fund stated that over the past six years, it has experienced countless difficult or joyful moments such as the ups and downs of the market, the "temporary failure" and "value return" of strategies. The company will also have many shortcomings or unsatisfactory aspects in the process of development, but we always adhere to the principle of giving priority to the interests of holders and use extremely prudent standards to evaluate, optimize and respond.

Secondly, Zhonggeng Fund also expressed its gratitude to Qiu Dongrong.We thank him for his outstanding contributions during his tenure and for his valuable efforts in the construction and improvement of Zhonggeng Fund’s low-valuation value investment strategy system.

Divide into four parts, and train a team of fund managers to take over

According to the announcement, the five funds managed by Qiu Dongrong will be split and managed by four fund managers.

Specifically, in May this year, Wu Chenggen and Liu Sheng were hired to co-manage Zhonggeng Value Quality One-Year Holding and Zhonggeng Value Navigation. Currently, they are managed separately by the two of them. The Zhonggeng Value Smart and Flexible Allocation Mixed, which Wu Chenggen previously co-managed with Qiu Dongrong, will also be managed by him alone.

The Zhonggeng Hong Kong Stock Connect Value Stock Fund, which is solely managed by Qiu Dongrong, is managed by Sun Xiao, and the fund manager of the Zhonggeng Small Cap Value Fund is managed by Chen Tao, who previously had a solely managed product, Zhonggeng Value Pioneer.

In an open letter, Zhonggeng Fund stated that these fund managers were trained independently by Zhonggeng. The team will continue to exert professional alpha and leverage its systematic advantages and strengths to jointly manage Zhonggeng Fund's low-valuation value strategy product line.

From the introduction, the common point of the four fund managers is that they adhere to the low valuation strategy, but their observation perspectives are different, such asLiu Sheng is good at exploring investment opportunities from the bottom up by combining industry trends, company quality, valuation pricing and other aspects, and seeking a right-skewed yield distribution curve; Mr. Chen Tao is good at researching and investing in pan-growth stocks; Wu Chenggen has rich experience in cross-asset research and is good at portfolio management. Based on the low-valuation value investment strategy system, he has a value, cycle, multi-dimensional, and cross-asset perspective; Sun Xiao has relatively rich experience in Hong Kong stocks and overseas investment research, and a diversified investment perspective.

Zhonggeng Fund further elaborated on the low-valuation value investment strategy system. The low-valuation value investment strategy system is like a mature modern "factory". In this "factory", relying on the underlying unified low-valuation value investment strategy, it has gathered outstanding talents, established a three-dimensional investment research process, and brought together the alphas of each person, each team and different levels in the investment research team into a high alpha collection, seeking to form an "alpha superposition" effect, so as to better play the effectiveness of the systematic development of investment research, and ultimately better serve each product in the "factory".

After leaving the "Qiu Dongrong" label, Zhonggeng emphasized platform building. The company pointed out that after nearly six years of integrated investment and research construction and practice, the low-valuation value investment strategy system has become increasingly perfect and continuously evolving.

In terms of investment research team building, Zhonggeng Fund has currently built an investment research team of nearly 40 people. At the same time, it continues to expand the scope of research, from A-shares to Hong Kong Stock Connect stocks, from individual companies to companies in the same industry and the same industrial chain, to form a three-dimensional industry and industrial perspective, so as to enhance a deeper understanding of individual stock research and avoid simple linear extrapolation and the influence of market sentiment.

Qiu Dongrong's assets under management shrank by 5 billion in the second quarter

Qiu Dongrong is one of the founding team members of Zhonggeng Fund and the backbone of its management products. However, as rumors of his resignation spread, the scale of its products began to decline. As of the end of the second quarter, the total scale of Qiu Dongrong's managed funds was 14.708 billion yuan, a decrease of 5.146 billion yuan from 19.854 billion yuan at the end of the first quarter, and a 25.91% reduction in scale and fees.

Specifically for products, except for the Zhonggeng Hong Kong Stock Connect Value, whose scale increased by 7.63%, the scale of other products has shrunk to varying degrees. The Zhonggeng Small Cap Value, which has shrunk the most, has seen its scale decrease by 47.15% compared with the previous period, a reduction of nearly half of its share; Zhonggeng Value Leader and Zhonggeng Value Smart have decreased by 27.76% and 22.93% respectively, and the scale of China Value Quality has decreased by 15.69% in one year.

Under the industry trend, even if Qiu Dongrong had not left, de-emphasizing star fund managers, avoiding the company being tied to a single fund manager, and transforming the investment research team into a platform were all inevitable trends. It’s just that Qiu Dongrong’s "decisive" resignation has accelerated this change. For Zhonggeng Fund, a short period of pain is inevitable.

The latest public fund management scale for the second quarter was released. Zhonggeng Fund's non-cash management scale in the second quarter was 18.972 billion yuan, a decrease of 6.072 billion yuan, and its ranking dropped to 105th.

Zhonggeng Fund told investors that short-term changes will not affect the implementation of the fund's investment strategy. The new fund manager will continue to follow the underlying unified low-valuation value investment strategy and combine it with the product's own style positioning, and firmly adhere to "no drift in strategy and no deformation in style."

Investing is a marathon with no end. Without Qiu Dongrong, it will take time to verify how Zhonggeng Fund and its investment research team can prove themselves.