A US$20 billion Chinese hedge fund used last week’s sell-off in Hong Kong stocks to boost exposure, betting that Beijing’s policy support will drive shares higher and lure global investors as US markets lose appeal.
Gao Yuncheng of Greenwoods Asset Management, one of the largest hedge funds in China, said the firm has sold nearly all of its non-Chinese holdings this year. The firm’s confidence in China – expressed mostly via investment into Hong Kong stocks – was emboldened as US President Donald Trump unleashed a global trade war.
“The most important thing for a market is the stability and rationality of its policies,” Gao, managing partner at the firm, said in a Monday interview from Shanghai. “China’s policies have always been supportive” and authorities have stepped up their efforts since September, unlike the tariff policy flip-flops in the US, he said.
His top picks are stocks that stand to benefit from China’s technological advancements and a growing consumer economy. They should also have a global edge and attractive valuations, he said, while declining to name his preferences due to compliance issues.
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Stock markets in Asia resume slump as hefty US tariffs on China take effect
Stock markets in Asia resume slump as hefty US tariffs on China take effect
One of the products he manages, the Greenwoods Select Fund, returned 21 per cent in 2024, according to the data the company sent to its clients seen by Bloomberg. That compares with a 26 per cent gain in the Hang Seng China Enterprises Index, and a 15 per cent rise in the CSI 300 Index, an onshore benchmark. For the first quarter of this year, the fund returned 10.6 per cent, the data show.
The fund’s buying is part of mainlanders’ rush into Hong Kong stocks last week, when southbound purchases hit a single-day record on April 9.
