(Bloomberg) -- The top-performing China hedge fund is piling back into property shares, reviving a trade that propelled it to a 46 percent gain in the second half of 2014.

Marco Polo Pure Asset Management has been buying developers, including Poly Real Estate Group Co. and Beijing Capital Development Co., after the industry’s benchmark gauge in Shanghai dropped as much as 19 percent from this year’s high. That same trade helped drive the fund’s gain in 2014 as China’s interest-rate cut in November sent the Shanghai Property Index to a 60 percent surge through Jan. 5, according to Aaron Boesky, Marco Polo’s chief executive officer in Hong Kong.

The first reduction in borrowing costs since 2012 is just the start of monetary easing that will send the Shanghai Composite Index to a gain of about 50 percent this year, according to Boesky. Property stocks led the index’s 53 percent rally last year as investors in the $5.1 trillion market bet central bank stimulus will boost the world’s second-largest economy from its weakest expansion since 1990.

“We are going to make a new high,” Boesky, whose Pure China fund was the top performer in the second half among China-focused hedge funds tracked by AsiaHedge Intelligence, said in an interview in Hong Kong. The government is “going to start making cost of capital cheaper and the economy faster.”

The rally in Chinese shares will probably resume after the weeklong Lunar New Year holidays that start on Feb. 18, said Boesky, who oversees more than $100 million. Property sales will also pick up and investor confidence may get a boost from next month’s National People’s Congress as President Xi Jinping outlines plans to keep the economy growing, said Chris Tang, the chief investment officer at Marco Polo.

David Fuller's view

International opinions regarding China’s outlook are more divided than for any other country.  

China’s programme to develop a consumer led economy makes sense to me, especially as it has extremely high domestic savings rates.  One important reason for this is that China does not have the social safety network policies of most developed countries.  As these improve over the next few years, far more domestic capital will flow into consumption and also the stock market.   

Monetary easing is underway in China and its stock market remains reasonably valued.  Among indices, China’s Shanghai A-Shares are more expensive following the surge late last year and a medium-term consolidation is underway before the bull market resumes.  The Hong Kong China Enterprises and Hang Seng Indices are competitively prices and underlying support shows considerable recovery potential.