According to regulatory filings this week, some hedge fund managers reduced exposure to Chinese companies such as Alibaba Group Holding Ltd (BABA.N), Baidu Inc (BIDU.O) and Vipshop Holdings Ltd (VIP.N) in the second quarter.
That move helped them avoid a broad equity market pullback in July and a devaluation of the renminbi in August that burned many investors. The funds may have also been taking profits. The Shanghai Composite Index had gained more than 100 percent over 2014 and the first half of 2015.
Senator Investment Group, for example, sold its US-traded shares of Internet search company Baidu in the second quarter, averting a later 17.5 percent stock price decline.
Other hedge fund firms to pare back on Baidu in the quarter included Coatue Management, Egerton Capital and Viking Global Investors, filings show.
Alibaba, which went public last year and is viewed as the Chinese equivalent of Internet retailer Amazon.com Inc (AMZN.O), also lost some fans in the second quarter, ahead of its subsequent 9.1 percent share price drop.
Senator, which had US$11.8 billion in regulatory assets under management as of December 31, said it shed its small Alibaba stake.
Other prominent investors to reduce their stakes included Tiger Global Management, Moore Capital Management, Magnetar Financial, Citadel Advisors and Glade Brook Capital Partners, according to the filings.
Hedge fund managers such as Pine River Capital Management, Emerging Sovereign Group and Passport Capital reduced their stakes of Vipshop, another Chinese online retailer, in the second quarter. Its US-traded American Depositary Receipts are down 7.9 percent since June 30.
These three companies' stocks were the most commonly held by hedge funds as of March 31 according to Symmetric, which tracks and analyzes public U.S. hedge fund stock holding reports.
It remains too soon to tell whether hedge funds have soured on China overall, and indeed some added to stakes in other Chinese companies during the second quarter.
Tiger and Coatue put more money in e-commerce company JD.com Inc (JD.O). Fore Research & Management, Passport Capital, Tourbillon Capital Partners and Viking initiated or added to stakes in travel booking website (Ctrip.com) International Ltd (CTRP.O).
Coatue, Fore and Myriad Asset Management, meanwhile, acquired more Vipshop.
Regardless, many hedge fund managers focused on Chinese stocks have had a difficult time this summer.
After gaining 24.37 percent from January to May, the AsiaHedge Chinese Long/Short Equity Index has reversed course. As of the end of July, year-to-date gains were just 8.12 percent net of fees.