Hong Kong, Jan 19 Reuters Hedge funds that bet on a swift shift in the country39;s zeroCOVID and regulatory policies in late 2022 while the stock market was tumbling and political uncertainty was intense were rewarded handsomely, according to sources and fund documents.

The MSCI China index plunged by 17 in October as President Xi Jinping consolidated power in a twiceinadecade Communist Party Congress and many investors worried Beijing would sacrifice economic growth for ideology.

The hedge funds that used that as a buying opportunity profited, with tourism and consumption stocks quickly rebounding after Beijing adopted a more targeted COVID19 policies and reduced quarantines following widespread antilockdown protests.

The MSCI China index rose by 36 over November and December, even as a surge in case numbers cast doubt over the economic recovery in the short term.

Greenwoods Asset Management, one of Asia39;s largest hedge funds which manages nearly 20 billion, saw its flagship Golden China Fund rally by 45 in the final two months of 2022, having bought weakened consumer and tech stocks in early November, two sources familiar with the matter said.

The Hong Kongbased firm, managed by veteran investor George Jiang, raising net exposure in the fund to more than 80 in November, up from less than 50 in October, betting long on signals from the Congress that economic development would be a priority and policy changes on COVID and real estate could come sooner than…