01, smuggling? Or is it a return to the family?
Recently, Qiu Dongrong, the star fund manager of Zhonggeng Fund, has been rumored to resign.
As the "pillar" of this personal public offering with a total management scale of only 25 billion, Qiu Dongrong is currently in charge of nearly 20 billion products, accounting for nearly eighty percent of the company's total scale.
Qiu Dongrong, who is the "sole leader", once relied on the attribute of "anti-falling" to break out of his own world in the star-studded public offering circle, and also helped Zhonggeng Fund, a private public offering established in 2015, gain a firm foothold.
The rise of Qiu Dongrong can be traced back to the "public fundraising feast" around 2020.
At that time, the overall size of China's large asset management market was as high as 116 trillion yuan, making it the second largest asset management market in the world after the United States, which provided huge development space for public offerings. The market has also risen from March 2020 to February 18, 2021, reaching the highest point of 5930.91 in the last five years.
▲ (The trend of the CSI 300 index in the last 5 years.) Photo source/Wind)
At this time, Qiu Dongrong was not very conspicuous among the star fund managers, and his management scale hovered between 6 billion ~ 9 billion yuan, which was incomparable with those "top streams" who were often hundreds of billions.
In late February 2021, the market suddenly reversed, and the CSI 300 index fell by nearly 1,000 points in just one month, while the Shanghai Composite Index also fell by nearly 400 points during the same period. Since then, although the market has temporarily "risen", the stock market is a barometer of the economy after all, and it is generally consistent with the economic situation, and since then A-shares have also started a three-year volatile decline.
Perhaps the low-valuation investment strategy stepped on the pulse of the market downturn, and at this time, Qiu Dongrong's products showed a rare "anti-fall" characteristic. In 2021, Zhonggeng Value Pilot recorded an annual return of 31.94%, exceeding the benchmark by 33 percentage points and 37.2% higher than the CSI 300 in the same period. In 2022, it recorded a yield of 4.85%, although the numbers are not as good as the previous year, but it is important to know that the CSI 300 fell by 21.63% in 2022.
The appearance of the "anti-falling" attribute also made the people pay attention to Qiu Dongrong. The scale of products under his management has risen from 10.8 billion in the second quarter of 2021 to 32 billion in the first quarter of 2023.
Personnel have metabolism, and exchanges have become ancient and modern. With the continuous rise of Qiu Dongrong's management scale, the product performance has been unable to keep up.
According to the financial report, Zhonggeng Value Pilot will have a net profit of 622 million yuan in 2021, and a cumulative profit of 1.726 billion yuan in 3 years from 2019~2021. In 2022, the yield of the product is 4.85%, which is 26% higher than the CSI 300 in the same period, but it unexpectedly lost 126 million yuan.
Qiu Dongrong said at the time that it would be difficult for equity investment to achieve absolute returns in 2022, and it was necessary not only to avoid damaged industries with huge declines, but also to favor energy and resource companies with strong performance. At the same time, in the year of the double squeeze of stock earnings and valuations, it is necessary to pay attention to value stocks with more prominent defensive characteristics in terms of style.
Subsequently, he made adjustments, saying that he would "adhere to the concept of low-valuation value investment, and build a cost-effective portfolio by selecting stocks with reduced fundamental risks, positive earnings growth, and cheap valuations, and strive to obtain sustainable excess returns." ”
However, the adjusted investment ideas failed to regain their previous glory, and the financial report showed that in 2023 and the first quarter of this year, it will continue to lose 281 million yuan and 450 million yuan.
In addition, products such as Zhonggeng small-cap value and Zhonggeng value flexible allocation have also accumulated losses of 600 million yuan and 119 million yuan respectively from 2022 to the first quarter of this year. In particular, the value of the newly established Zhonggeng Hong Kong and Shanghai Stock Connect in January last year has been closed for 18 months, and it has lost 395 million yuan since its establishment in 2023 to the first quarter of this year.
▲ (Qiu Dongrong's net profit of products under management.) Data source/fund financial report)
Since then, the people have also voted with their feet, and Qiu Dongrong's overall management scale has declined for 5 consecutive quarters since the first quarter of 2023, with the latest data of 19.8 billion, which is more than 12 billion less than the 32 billion at the end of the first quarter of 2023.
Although the performance rebounded after the first quarter, around May Day this year, there was news that Qiu Dongrong may step down from its products. By the end of 2023, the total number of fund share holders (households) under Qiu Dongrong is 406,100.
At this time, there are still many people who read the benefits of his "anti-fall", and left a message in the fund bar to save Qiu Dongrong: "Mr. Qiu is leaving, and there is no one in Zhonggeng to carry the banner." "Can you not leave your job?" There are not many fund managers who can reassure people, Qiu is finally one, if he withdraws, who can replace him? ”
On May 11, Zhonggeng Fund issued two announcements on the appointment of additional fund managers, adding Wu Chenggen and Liu Sheng, who respectively managed Zhonggeng Value Quality for one year and Zhonggeng Value Pilot with Qiu Dongrong. "At this point, it is basically certain that Qiu Dongrong is going to step down." An industry insider pointed out.
"City Boundary" noticed that in addition to the statement of "running smuggling", there are two other versions circulating in the market as to the reason for Qiu Dongrong's resignation: First, he wants to return to his family. The reason is that he and his wife Bai Bingyang are well-known "husband and wife" in the public offering circle, and his wife is also the fund manager of Wells Fargo Fund, so the two will have a lot less time to take care of the family. In addition, according to media reports, Qiu Dongrong himself expressed: "I want to pause and take a break", "I owe more families in the past two years, and I hope to return to the family." ”
Another version is that due to the impact of salary cuts and salary limits in the public offering industry, Qiu Dongrong is dissatisfied with the salary. However, some people in the industry have questioned this statement, on the grounds that "Zhonggeng Fund's incentive for him is very perfect". Qiu Dongrong is currently the deputy general manager and chief investment officer of Zhonggeng Fund, holding 9.72% of the equity of Zhonggeng Fund, and is the fourth largest shareholder.
In January last year, Qiu Dongrong newly issued Zhonggeng Hong Kong Stock Connect worth 18 months of closure, and the closure period will last until July this year. Perhaps the answer will be revealed at that time.
02. How difficult is it to find a favorite fund manager?
It's hard to stay.
Not only Qiu Dongrong, in the past two years, Wang Zonghe, the "national fund manager" of Penghua Fund, Yuan Fang, the "first sister" of ICBC Credit Suisse, Cai Songsong, the "first brother" of Nuoan Fund, Fan Yan, the "first sister" of Yuanxin Yongfeng, Jiang Feng, the veteran of CCB Fund, Jiang Qian, the star fund manager of Orient Fund, and Wang Xiaoling, the double ten fund manager of ICBC Credit Suisse, have resigned or stepped down from their products.
This is undoubtedly a hammer for many people who are still deeply involved in it. But the "top stream" is determined to leave, and those who remain can only accept the reality, and many of Qiu Dongrong's people even shouted the slogan of "looking for Qiu Shen's replacement".
But how can "replacement" be so easy to find?
For example, Qiu Dongrong mentioned that he is inseparable from "low valuation" and "value", that is, the PB-ROE framework he has been emphasizing (an investment method that pursues long-term high growth and has a low current valuation).
In his own words, he explained: "First, the return on investment must come entirely from the profit or cash flow of the asset itself, and it cannot be expected to be returned through trading or trading. Second, on the basis of satisfying the first criterion, we can obtain excess returns by buying 'cheap enough'. ”
According to this standard, there are many fund managers in the market who believe in the PB-ROE investment framework, but each fund manager uses this framework to screen and select specific targets, which is very personal characteristics.
For example, Wu Peiwen of Yau Dongrong's old employer, HSBC Jinxin Fund, summarized his stock selection ideas as: "low-valuation growth stocks, cyclical stocks at the bottom of the cycle or upward cyclical stocks", which also follows the PB-ROE investment framework.
But judging from the actual positions, the stock selection of the two basically has little intersection. As of the first quarter of this year, Qiu Dongrong's top 3 stocks belong to the metal aluminum, semiconductor and electrical equipment industries; Wu Peiwen selected Yili shares, China Mobile and Yunnan Baiyao from the consumption, telecommunications services and health care sectors.
The investment philosophy of the two may be in the same vein, but Wu Peiwen is by no means anyone's replacement.
▲ (Source/Wind)
Therefore, from the perspective of the people, the investment habits of different fund managers are very different, and the personal experience, time of entering the market, the length of holding time, and the scope of ability of fund managers are also different, and it is difficult for ordinary people to quantify these standards.
From the perspective of investment philosophy, it seems difficult to search for "similar items" in the whole market, but what if it is a successor appointed by the fund company itself? Can the performance myth of the predecessor be continued and help Kimin cross the bull and bear?
Real-world cases show that it's not that easy either.
When Qiu Dongrong was at his old club HSBC Jinxin, he was in charge of two products, HSBC Jinxin Dual-Core Strategy A and HSBC Jinxin Large Cap A. In 2018, the year he left the company, both products experienced net profit losses.
According to the financial report, HSBC Jinxin Cap A made a profit of more than 1.4 billion yuan in 2017, and immediately lost more than 700 million yuan in 2018. Fortunately, the successor stabilized the situation, and the product turned a profit in 2019 and 2020. The performance trend of HSBC Jinxin Dual-Core Strategy A after Qiu Dongrong's departure is also similar to that of HSBC Jinxin Large Cap A.
After Qiu Dongrong, HSBC Jinxin Large Cap A has experienced 4 more fund managers, and the industry allocation is also quite different from that of Qiu Dongrong's period. During the Yau Dongrong period, HSBC Jinxin Large Cap A preferred the financial industry, healthcare and optional consumption; And in the hands of the successor, the allocation of information technology and industrial sectors gradually gained the upper hand.
Overall, after Qiu Dongrong left, although these two products have different levels of profitability after a short period of twists and turns, it is indeed difficult to guarantee the performance after personnel changes.
It is also important to note that these two funds have experienced a significant decline in scale after Yau Dongrong's departure, of which HSBC Jinxin Large Cap A has shrunk from 7.1 billion in 2017 to 2.4 billion in the first quarter of 2024, while HSBC Jinxin Dual-Core Strategy A has shrunk more seriously, from 8.4 billion to 184 million in the same time period, a contraction of 97.8%. The two funds have collectively shrunk by nearly 13 billion.
Another example that can be referred to is Yuan Fang, the former "first sister" of ICBC Credit Suisse. Since stepping down from its products in November 2022, Yuan Fang has represented the fund ICBC Cultural and Sports Industry A, which has significantly underperformed the performance benchmark by 25%, and in most of the years from 2016 to 2022 managed by Yuan Fang, it has significantly outperformed the performance benchmark.
▲ (The performance of ICBC cultural and sports industry A managed by Yuan Fang.) Source: Wind)
The negative impact of the departure of a star fund manager on the performance of the fund can be seen.
For ordinary people, in the face of the departure of star fund managers, choosing "long-term love" or "leaving" is undoubtedly a choice that has to be made.
Author | Lu Chunfeng
Edit | Han Zhongqiang
Operations | Liu Shan