news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

In May of this year, news that the well-known fund manager Qiu Dongrong was leaving Zhonggeng Fund was widely circulated, and the institutional response also made investors "confused". Now, with the implementation of an announcement, Qiu Dongrong's farewell to Zhonggeng Fund has become a fact. On July 21, Zhonggeng Fund issued an announcement stating that Qiu Dongrong resigned as the fund manager of five products including Zhonggeng Value Pilot, and no longer served as the deputy general manager of Zhonggeng Fund. On the same day, Qiu Dongrong also posted on WeChat Moments that he was very honored to participate, witness, and accompany the company from the establishment of its strategic development positioning before its establishment to the continuous implementation and realization process for 6 years, and he was proud of it. This also means that the recent public offering 2024 second quarter report has become Qiu Dongrong's last public opinion disclosed by Zhonggeng Fund.

Official announcement of "breakup"

On July 21, Zhonggeng Fund announced that Qiu Dongrong will resign as the fund manager of five products including Zhonggeng Value Pilot Hybrid Fund from July 19, 2024 for personal reasons, and will no longer serve as the deputy general manager of Zhonggeng Fund. The announcement shows that Qiu Dongrong has no information about transferring to other positions in the company.

The successors of relevant products are in place. Specifically, Liu Sheng serves as the fund manager of Zhonggeng Value Leading Mixed Fund; Chen Tao, on the basis of managing Zhonggeng Value Pioneer Stock, serves as the fund manager of Zhonggeng Small Cap Value Stock; Wu Chenggen serves as the fund manager of Zhonggeng Value Flexible Allocation Mixed Fund and Zhonggeng Value Quality One-Year Holding Mixed Fund; Sun Xiao serves as the fund manager of Zhonggeng Hong Kong Stock Connect Stock.

On the same day, Zhonggeng Fund released a letter to investors on its official WeChat account, expressing sincere gratitude to Qiu Dongrong for his outstanding contributions during his tenure and his valuable efforts in the construction and improvement of Zhonggeng Fund's low-valuation value investment strategy system. According to the announcement, the fund manager team independently cultivated by Zhonggeng Fund will continue to play a professional alpha and use the advantages and strengths of the system to jointly manage Zhonggeng Fund's low-valuation value strategy product line.

Qiu Dongrong also posted on WeChat Moments, saying, "I am very honored to participate in, witness, and accompany the company from the establishment of the strategic development positioning of 'Zhonggeng Fund, deeply cultivating value, and only doing value investment' before its establishment, to the continuous implementation and realization of the process over the past six years. I am proud of it." Qiu Dongrong also mentioned that although he resigned as a fund manager for personal reasons, as one of the thousands of holders, he sincerely wishes Zhonggeng Fund to get better and better and investors a smooth investment. Regarding the "next stop" after leaving, the Beijing Business Daily reporter also contacted Zhonggeng Fund and Qiu Dongrong for information, but did not receive a positive response.

It should be noted that in addition to being the deputy general manager and high-performing fund manager, Qiu Dongrong is also a shareholder of Zhonggeng Fund with a shareholding of more than 5%. Public information shows that on September 4, 2023, the China Securities Regulatory Commission approved Qiu Dongrong to become a shareholder of Zhonggeng Fund with a shareholding of more than 5%. According to the latest information disclosed on the company's official website, as of February 2024, Qiu Dongrong's shareholding ratio is 9.73%, making him the fourth largest shareholder of Zhonggeng Fund.

Looking back to May this year, news about Qiu Dongrong's resignation came out. At that time, two funds managed by Qiu Dongrong, Zhonggeng Value Pilot Hybrid and Zhonggeng Value Quality One-Year Holding Hybrid, were respectively hired by Liu Sheng and Wu Chenggen to co-manage, which further triggered market speculation about Qiu Dongrong's resignation. Regarding the additional hiring, Zhonggeng Fund responded to the Beijing Business Daily reporter at the time that this move can maximize the alpha of investment research talents and allow everyone in the investment research team to better play the effectiveness of the systematic development of investment research.

However, investors did not buy into the fund manager's statement and planned to find a replacement for Qiu Dongrong. Some investors even called on Qiu Dongrong to speak out. In the end, Qiu Dongrong chose to bid farewell to Zhonggeng Fund. This also means that the recent public offering 2024 second quarter report is Qiu Dongrong's last public opinion disclosed at Zhonggeng Fund.

Management scale reduced by more than 25%

Founded in 2018, Zhonggeng Fund is a private fund. It currently has only six fund products. Except for Zhonggeng Value Pioneer Stock, the other five were previously managed by Qiu Dongrong. Quarterly report data shows that as of the end of the second quarter of 2024, Qiu Dongrong's management scale accounted for 77.52% of Zhonggeng Fund's total management scale.

Overall, as of the end of the second quarter of 2024, Qiu Dongrong's total managed assets amounted to 14.708 billion yuan, a decrease of 25.92% from 19.854 billion yuan at the end of the first quarter. The scale of the above five products has declined to varying degrees month-on-month. Among them, the scale of Zhonggeng Small Cap Value Stocks has declined the most, almost "halved", a decrease of 47.15% month-on-month. However, according to the data disclosed in the quarterly report, no single investor in the above products managed by Qiu Dongrong holds a proportion of fund shares that reaches or exceeds 20%.

As a well-known fund manager in the industry, Qiu Dongrong is known for his low-valuation investment strategy. In terms of performance, as of July 19, the annual returns of the five products managed by Qiu Dongrong were all negative, and the annual returns of Zhonggeng Value Quality One-Year Holding Mixed Fund, Zhonggeng Value Pilot Mixed Fund, Zhonggeng Hong Kong Stock Connect Stock Fund, Zhonggeng Value Flexible Allocation Mixed Fund, and Zhonggeng Small Cap Value Stock Fund were -0.56%, -1.35%, -7.11%, -10.54%, and -11.45%, respectively. Except for Zhonggeng Value Quality One-Year Holding Mixed Fund and Zhonggeng Value Pilot Mixed Fund, the other products all underperformed the average returns of the same category.

If we extend the time period to the past three years, except for the Zhonggeng Hong Kong Stock Connect Fund which was established in January 2023 and has no relevant data, as of July 19, the returns of Zhonggeng Small Cap Value Stocks, Zhonggeng Value Flexible Allocation Mixed, Zhonggeng Value Quality One-Year Holding Mixed, and Zhonggeng Value Leading Mixed in the past three years were 0.29%, 2.07%, 9.69%, and 9.82%, respectively, all significantly outperforming the average returns of ordinary stock funds, flexible allocation mixed funds, and equity-oriented mixed funds in the past three years of -23.57%, -33.39%, and -36.2%, respectively.

In addition, Qiu Dongrong mentioned in the second quarter report of Zhonggeng Value Pilot Mixed that under the challenging background of transformation, debt, geopolitics, etc., the economy or market is not stable, and the performance of equity assets is more differentiated. The dividend assets that were slightly tasteless a few years ago are today's "pearls". In the wind and waves, the big ship is more like a rock while the small boat is swaying. China's high-quality development and risk mitigation are important macro backgrounds. At present, people generally value certainty, but it is difficult to stay present and dare to imagine. Based on the low-valuation value investment strategy, it is a continuous work to correctly bear risks and explore investment opportunities with excess returns.

In the view of financial commentator Guo Shiliang, the departure of well-known fund managers may affect the fund's asset management and risk management capabilities. At the same time, whether the successor can make a good connection and the different investment styles may also affect the fund's performance. If small and medium-sized public fund companies want to break through in the current environment, they need to improve their asset allocation capabilities, investment levels, service capabilities and management levels, and they also need to reserve more high-quality fund managers and outstanding talents to improve their competitiveness.

Beijing Business Daily reporter Li Haiyuan