On August 20, 2024, the five funds managed by Qiu Dongrong before his resignation, including Zhonggeng Value Pilot, all disclosed their mid-term reports for 2024.

The data shows that, except for those still in the closure period at mid-year, the other four funds have been significantly redeemed by institutional investors, with redemption ratios far higher than those of individual investors.

On July 19, 2024, Zhonggeng Fund announced that Qiu Dongrong resigned as the fund manager of the five products including Zhonggeng Value Pilot due to personal reasons and no longer holds any position in the company.

This means that retail investors only learned about Qiu Dongrong's resignation from public channels after the mid-term report.

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Although it is unknown whether the news was leaked in advance, the data shows that most of the institutional funds managed by Qiu Dongrong had already withdrawn before the mid-term report.

The institutional proportion of Zhonggeng Small Cap Value at mid-year 2024 fell from 49.30% at the beginning of the year to only 9.26%, a cliff-like decline, and the total shares were less than half of the beginning of the year.

The proportion held by individual investors rose from 50% to 90%.

In terms of institutional holdings, Zhonggeng Value Pilot decreased from 45.24% to 23.22%, and Zhonggeng Value Flexibility decreased from 13.41% to 4.00%.

The fund shares experienced a large-scale redemption within half a year, and the fund manager could only sell the held stocks, exchange stocks for funds, and return to these withdrawing institutional investors.

Just the stocks sold by institutional redemption in the first half of the year for Zhonggeng Small Cap Value were no less than 2 billion yuan.

This 2 billion yuan was mostly obtained from stock reduction.

In the past year, Zhonggeng Small Cap Value has long been heavily invested in small-cap stocks such as Seteng Shares, Chuanyi Shares, and Changshu Auto Decoration, with a market value of no more than 12 billion yuan, and the market value of Changshu Auto Decoration is even less than 5 billion yuan.

At the end of 2023, Zhonggeng Small Cap Value held 548 million yuan in Seteng Shares, 402 million yuan in Chuanyi Shares, and 340 million yuan in Changshu Auto Decoration.

By mid-2024, the positions in the three stocks were only 228 million yuan, 225 million yuan, and 117 million yuan, and the number of shares held also decreased significantly.

Each small-cap stock cut by 200 million yuan has a solid impact on the stock price.

At the end of 2023, the total holding ratio of the four funds under Qiu Dongrong in Changshu Auto Decoration exceeded 8%, which is equivalent to the second-largest shareholder.

The 8% of the floating shares have been reduced all the way, even if half of the 4% is reduced, the stock price of ordinary small stocks cannot stand it.

The stock price reduction in turn weakened the net value of Zhonggeng Small Cap Value, and the fund lost 11.12% in the first half of the year, losing 12 points to the CSI 300.

The main victims are still individual investors holding.

The decline in Changshu Auto Decoration in the first half of the year reached -30.15%, losing more than Zhonggeng Small Cap Value.

In the second quarter of this year, the management scale of Qiu Dongrong has seen the largest single-quarter decline in nearly three years, shrinking by 5.146 billion yuan compared to 19.854 billion yuan at the end of the first quarter of this year, a decline of more than 25%.

Looking at a single product, the scale of Zhonggeng Small Cap Value has shrunk the most, close to 50%.

Looking at the redemption situation from the mid-term report, 80% of the 5.146 billion yuan of the management scale reduction is the share of institutional funds redeemed.

Before resigning, Qiu Dongrong was the mainstay of Zhonggeng Fund.

As a fund manager, the scale of the funds managed has been over 10 billion yuan for many years, accounting for more than 70% of the total scale of Zhonggeng Fund, and also served as the deputy general manager and chief investment officer, and is also the fund manager with the longest tenure in the company.

During more than five years of tenure at Zhonggeng Fund, Qiu Dongrong's best fund return during his tenure reached 115.61% (Zhonggeng Value Pilot), followed by 100.75% (Zhonggeng Small Cap Value), and Zhonggeng Value Flexibility and Zhonggeng Value Quality also have an annualized return of more than 10%.

Qiu Dongrong is one of the best-performing fund managers in this bull and bear cycle since 2019.

Outstanding performance has attracted the attention of professional investors.

As of the end of 2023, Qiu Dongrong is also one of the fund managers with the most institutional holdings in the market.

The core factor for fund managers to choose equity funds, especially chief investment officers like Qiu Dongrong, has a key impact on whether the fund holds or not.

As early as the beginning of May this year, the news of Qiu Dongrong's resignation spread through channels.

At that time, Zhonggeng Fund did not directly respond to the rumors of resignation, only stating that "if there are further arrangements in the future, it will be announced in a timely manner and please refer to the company's announcements.

Please do not believe or speculate on information obtained from other non-official channels."

It was not until July 16 that the announcement of Qiu Dongrong's resignation was officially issued, and the institutional holders had significantly reduced their holdings before the announcement came out in the first half of the year.

After Qiu Dongrong resigned, Wu Chenggen, Chen Tao, Liu Sheng, and Sun Xiao, four fund managers, will manage the five original funds of Qiu Dongrong separately, and their public fund management experience is 4 years and 81 days, 3 years and 3 days, 103 days, and 34 days respectively.

Taking over the fund at the bottom of the index, these young players still have time and space to create excess returns and become the next Qiu Dongrong.