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The resignation rumors have finally come to an end. On July 21, Zhonggeng Fund announced that Qiu Dongrong had resigned as the fund manager of five products including Zhonggeng Value Pilot since July 19 this year due to personal reasons. At the same time, he will no longer serve as the deputy general manager of Zhonggeng Fund.

Zhonggeng Fund evaluated his tenure as "outstanding contribution" and thanked him for his valuable efforts in the construction and improvement of the company's low-valuation value investment strategy system.

Qiu Dongrong is the "soul figure" of Zhonggeng Fund. On the one hand, as the fourth largest shareholder of Zhonggeng Fund, Qiu Dongrong holds 9.73% of the company's shares; on the other hand, Zhonggeng Fund has only 6 products, 5 of which are managed by Qiu Dongrong, with a total scale of about 14.708 billion yuan, accounting for about 77% of the company's total product scale.

Now that the "soul figure" has left, whether the new fund manager can "carry up" the banner, gain recognition from investors, and create more success for the company is the key issue for whether Zhonggeng Fund can overcome the "difficulties".

Data source: Wind

Qiu DongrongManaging scaleexistcompanyAbout 77%

In ChargefundJob RewardsmostUp to 115.61%

Public information shows that Qiu Dongrong joined Zhonggeng Fund in 2018 and resigned from his former position as deputy general manager and chief investment officer of the company. He has served as a researcher at the Shanghai Representative Office of Qun Yi International Holdings Co., Ltd., director of the equity investment department of HSBC Jinxin Fund, and assistant to the general manager.

Data source: Wind

Judging from the performance, the products managed by Qiu Dongrong have performed well overall.

Wind data shows that before leaving office, Qiu Dongrong managed a total of 5 funds, namely Zhonggeng Value Leader, Zhonggeng Small Cap Value, Zhonggeng Value Flexible Allocation, Zhonggeng Value Quality One-Year Holding and Zhonggeng Hong Kong Stock Connect Value.

Among them, Zhonggeng Value Leadership has the largest scale, with a total scale of approximately 4.984 billion yuan, and the highest tenure return. From December 19, 2018 to the close of July 19, 2024, Qiu Dongrong's tenure return on this fund was as high as 115.61%.

Among the other four funds, the tenure return of Zhonggeng Small Cap Value exceeded 100%. From April 3, 2019 to July 19, 2024, the tenure return was as high as 100.75%.

The tenure returns of Zhonggeng Value Flexible Allocation and Zhonggeng Value Quality for one year are 90.75% and 39.76% respectively. Only the tenure return of Zhonggeng Hong Kong Stock Connect Value is negative, with a return of about -15.5% after more than one year of holding.

Thanks to his good performance, Qiu Dongrong joined the ranks of fund managers with a scale of over 10 billion yuan in the second quarter of 2021. Subsequently, his management scale continued to rise, exceeding 20 billion yuan in the third quarter of 2021, and exceeded 30 billion yuan in the first quarter of 2023, which was also the peak moment of his management scale. Subsequently, his management scale began to decline all the way, falling to 14.708 billion yuan in the second quarter of this year. However, this scale still accounts for about 77% of the total scale of Zhonggeng Fund.

There were actually early signs that Qiu Dongrong would step down. In May this year, Zhonggeng Fund announced that it had hired Wu Chenggen as the manager of Zhonggeng Value Quality One-Year Holding Fund and Liu Sheng as the manager of Zhonggeng Value Pilot Hybrid Fund. Both funds were originally managed independently by Qiu Dongrong.

Zhonggeng FundPoor product performance during the year

Can the new fund manager "take up the banner"

For Zhonggeng Fund, the industry is paying close attention to how to ensure a smooth transition after the star fund manager steps down and make the new fund manager gain the trust of investors.

The performance of Zhonggeng Fund's products has not been satisfactory this year. Wind data shows that as of the close of July 19, all six of its products were in the red, and only one fund, Zhonggeng Small Cap Value, outperformed the benchmark during the same period, while the other five underperformed the benchmark to varying degrees.

Data source: WIND

After Qiu Dongrong leaves office, who will take over the five funds?

According to the arrangement of Zhonggeng Fund, Liu Sheng will serve as the fund manager of Zhonggeng Value Navigation. Public information shows that Liu Sheng has been engaged in securities research-related work since 2015. He has served as a researcher at Taiping Asset Management and a researcher in the investment department of HSBC Jinxin Fund. He joined Zhonggeng Fund in July 2018 and is currently the director of the research department of the company's investment department.

Zhonggeng Fund said that Liu Sheng is good at combining industry trends, company quality, valuation pricing and other aspects to explore investment opportunities from the bottom up, seeking a right-skewed yield distribution curve to obtain a higher implied return rate.

Chen Tao took over Zhonggeng Small Cap Value. It is reported that he has served as a researcher at Taikang Asset Management, a senior analyst at Huachuang Securities, a senior researcher at Zheshang Fund, and an investment manager at HSBC Jinxin Fund. He is currently the fund manager of Zhonggeng Fund. He is good at researching and investing in pan-growth stocks, and on the basis of a unified low-valuation value strategy, he has deeply cultivated a low-valuation value growth strategy.

However, the Shell Finance reporter noticed that the performance of Zhonggeng Value Pioneer, which is independently managed by Chen Tao, was not good. From the time he took over the fund on August 20, 2021 to the closing on July 19, 2024, the fund's range return was -18.04%.

Chen Tao said in the second quarter report of Zhonggeng Value Pioneer that the valuations of almost all companies in the portfolio are at or near the lowest valuation percentile since their listing, and meet the standards of high growth potential on the medium- and long-term demand side, strong competitive advantages on the supply side, good business models, and high governance levels. Based on the low-valuation value growth strategy and common sense, they should be actively bought and patiently wait for the economic recovery. He hopes that investors will maintain a positive attitude like him.

Wu Chenggen serves as the fund manager of Zhonggeng Value Dynamic Flexible Allocation and Zhonggeng Value Quality One-Year Holding. He has rich experience in cross-asset research and is good at portfolio management.

Sun Xiao is the fund manager of Zhonggeng Hong Kong Stock Connect Value. He has extensive experience in Hong Kong stocks and overseas investment research, and a diversified investment vision.

Zhonggeng Fund said 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 to achieve "no drift in strategy and no deformation in style."

Zhonggeng Fund further stated that since its establishment, the company has always been committed to establishing first-class competitive advantages in the field of active equity investment through a continuously evolving low-valuation value investment strategy system.

The so-called low-valuation value investment strategy requires that the expected return on investment must come from the profitability and cash flow of the assets themselves. In short, it is "buy good goods cheaply". Even if the "goodness" of the "good goods" is at risk, the loss is relatively limited because it is bought cheaply. When the fundamentals of individual stocks meet expectations, the manager will not only be able to earn profits from the profits of the individual stocks themselves, but also from the valuation regression brought about by the process from low valuation to reasonable valuation, making this strategy present a cost-effective advantage of "controllable downside risks and sustainable upside returns".

Beijing News Shell Financial Reporter Pan Yichun Editor Chen Li Proofreading Lu Qian