The disclosure of public funds in the fourth quarter report of 2021 gradually entered the peak.
After SDIC UBS fund disclosed the four seasons report of some of its funds, some funds of Zhonggeng fund also disclosed the four seasons report. It is worth noting that the four funds managed by Qiu Dongrong, a fund manager focusing on undervalued investment, have all disclosed the four seasons report. Although the four funds have achieved good returns in 2021, their open-ended funds have been under great redemption pressure, and their management scale has shrunk to a large extent compared with the end of the third quarter, which was RMB 17.425 billion at the end of the fourth quarter.
For the next operation idea, Qiu Dongrong said that he would do a good job in asset allocation, style allocation and risk management for the holders in combination with the risk premium level of equity assets. Adhere to the concept of undervalued value investment, and select individual stocks with reduced fundamental risk, positive profit growth and cheap valuation to maintain the aggressiveness of the portfolio on the premise of resisting risks.
another ten billion fund managers disclosed the four seasons report
On January 18, all the four funds managed by Qiu Dongrong, the manager of Zhonggeng fund, disclosed the fourth quarter report of 2021. Under the background of the continuous fluctuation of the market, the four funds had good annual returns in 2021. Among them, the yield of Zhonggeng’s small cap value in 2021 was 65.15%, and the yield in the fourth quarter was only 0.02%, but the yield of the fund in 2021 outperformed most star fund managers.
However, since the small cap value of Zhonggeng has been in the state of “purchase restriction” since September 2, 2021, the fund was largely redeemed during the fourth quarter. Data show that during the fourth quarter, the total subscription share of the fund was zero, and the total redemption share reached 487 million. At the end of the third quarter, the fund share held by Jimin was 2.558 billion, but it fell to 2.071 billion at the end of the fourth quarter, a month on month decrease of 19.05%.
Zhonggeng value pilot managed by Qiu Dongrong also achieved a yield of 31.94% in 2021. The net value of the fund retreated to a certain extent in the fourth quarter, with a yield of – 3.17% in the fourth quarter.
As for the reasons for the withdrawal of the net value of the fund in the fourth quarter, Qiu Dongrong said that the drastic adjustment of the coal industry policy in October led to a large withdrawal of the over allocated energy sector of the fund in a short time, which was the main factor hindering the relative performance of the fund. The poor performance of individual stocks of holding banks also made a negative contribution to the relative performance of the fund The good performance of individual stocks in iron and steel, machinery, nonferrous metals and other industries has played a positive role in supporting the relative performance of the fund.
Although the yield of the fund outperformed that of most star fund managers in 2021, the fund was also redeemed by the foundation. Data show that during the fourth quarter, the total subscription shares of the fund were 84.7289 million, but the total redemption shares reached 689 million, and the net redemption amount reached 604 million. At the end of the third quarter, Jimin held 2.287 billion shares of the fund, which fell to 1.683 billion at the end of the fourth quarter.
The flexible allocation of Zhonggeng value managed by Qiu Dongrong also achieved good returns in 2021, reaching 45.45%, but the fund was also largely redeemed by Jimin. During the fourth quarter, Jimin redeemed 319 million fund units and subscribed only 87.6441 million units.
Due to the massive redemption of Jimin, Qiu Dongrong’s management scale decreased significantly. At the end of the third quarter of 2021, Qiu Dongrong’s management scale was RMB 20.846 billion, but it decreased to RMB 17.425 billion at the end of the fourth quarter.
heavy non track stocks
The heavy position stocks of the four fund products managed by Qiu Dongrong are mainly non track stocks, and coal, finance and resource companies are the main direction of their allocation.
According to statistics, Qiu Dongrong’s four funds held the most positions in Yankuang energy. During the fourth quarter, the total net value of Yankuang energy held by managed funds reached 5.25%, an increase of 2.05% compared with the end of the third quarter of 2021.
The Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) also in the coal industry was greatly reduced. The data show that Qiu Dongrong held Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) in the managed fund at the end of the fourth quarter, accounting for 5.07% of the net value, a decrease of 1.62% compared with the end of the third quarter.
Bank shares such as Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) were greatly increased by the fund. Zhonggeng value pilot managed by Qiu Dongrong included Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) into heavy position shares, and Zhonggeng also bought Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) in small cap value. By the end of 2021, Qiu Dongrong’s constant bank position in managed funds had increased to 4.01%, and his holding of Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) had increased by 1.15% to 4.08%.
Hong Kong stock targets such as CNOOC, China Overseas Development and China Hongqiao are also favored by Qiu Dongrong. During the fourth quarter, Qiu Dongrong increased his positions in Hong Kong stock targets.
adhere to the concept of undervalued investment
In the report at the end of the fourth quarter, Qiu Dongrong also revealed his position thinking. He said that next, we will do a good job in asset allocation, style allocation and risk management for holders in combination with the risk premium level of equity assets. Adhere to the concept of undervalued value investment, and select individual stocks with reduced fundamental risk, positive profit growth and cheap valuation to maintain the aggressiveness of the portfolio on the premise of resisting risks.
Qiu Dongrong believes that the weakening of economic fundamentals and the pressure on the performance of equity assets in the period of declining profits in history, but the policy shift to a “double width” environment of stable growth and wide currency and credit will help to provide valuation support for the pressure on equity assets. We judge that the overall resilience of the market is still, but it is more likely to be manifested in a structural bull market and bear market, which stems from the continued differentiation of fundamentals, and then the coexistence of market structural overvaluation and undervaluation. For example, the valuation of CSI 300 is only a historical neutral level, but the differentiation gap of component valuation has been in the extreme state for a long time.
Qiu Dongrong said that he would focus on four investment directions:
1. Subdivided leading companies with unique competitive advantages in generalized manufacturing industry. It includes not only the seemingly traditional manufacturing industry, but also the manufacturing industry with technical barriers such as new materials, parts and components. The fund will adhere to three standards, namely, demand growth, supply contraction and subdivided industry leaders, such as chemical industry, light industry, non-ferrous metal processing and machining, which can dig out real undervalued small cap value stocks.
2. Coal, energy and resource companies. From the perspective of market pricing and valuation, such companies are regarded as cyclical assets with extremely low valuation, good cash flow, less capital expenditure, high dividend yield and high expected return corresponding to current price. Therefore, in the context of carbon neutrality, we continue to be optimistic about the investment value of high-quality assets in energy and resources.
3. Finance, real estate, etc. in large cap value stocks. In the financial sector, we are optimistic about regional bank stocks related to the manufacturing industry chain, serving the real economy and having unique competitive advantages. Such banks have stable operation, low fundamental risk, extremely low valuation and high growth. Real estate companies focus on the leading companies of central enterprises with high credit and low financing cost. The long-term demand for real estate is still. With the mitigation of policy risks and the exposure of business risks, these companies have stronger anti risk ability, high possibility of extension expansion and very low valuation. When the real estate market is stable in the future, they still have good return potential.
4. Undervalued convertible bonds. The main body adheres to the three low requirements: low absolute price, low conversion premium rate and low implied volatility. The overall valuation of convertible bonds is relatively high, but there is still an opportunity to identify the high-risk return ratio relative to bonds, and there is still an opportunity to buy the above industry mapped convertible bonds at an undervalued price, so as to build an undervalued convertible bond portfolio with low risk but high implied return.
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