HONG KONG, China — Hedge funds globally registered their biggest monthly drop in seven years but waning Chinese demand for luxury goods helped one Asian firm beat the odds.

Optimas Capital Ltd. profited on bets that European luxury goods companies would suffer as wealthy Chinese tightened their belts. The bearish bets amounted to about 10 percent of long and short investments in its $350 million Optimas Global Alpha Fund last month, chief investment officer Thomas Wong said in Hong Kong. This helped the fund weather a brutal October, gaining 0.7 percent as broader hedge fund returns fell almost 3 percent in their worst showing since September 2011.

“No More Crazy Rich Asians?” asked an Optimas newsletter — referencing the hit movie about the region’s uber wealthy — as it highlighted the risk of rapidly slowing demand from Chinese, who have been driving the growth in luxury spending. As manufacturers nervously eye the outlook, Wong predicts the industry will be weak through at least the second quarter of next year.

Trade tensions and the depreciation of the yuan are hitting Chinese consumer confidence, while weakness in the nation's stock and property markets may constrain consumption by the wealthiest individuals, the hedge fund said in the October newsletter. The performance of China's equity market is a leading indicator for the stocks of Swiss watch makers Cie Financiere Richemont SA and Swatch Group AG, it said.

More reasons to worry? There’s a crackdown on “Daigou,” the Chinese personal shoppers who make purchases abroad. And then there’s the blow to overseas spending, which accounts for about two-thirds of Chinese high end purchases, from yuan weakness, the newsletter said. A slowdown in luxury watch buying in Hong Kong and in gem set sales at Chow Tai Fook Jewellery Group Ltd. and Luk Fook Holdings International Ltd., retailers in the city, are examples, it said.

The Optimas fund, which began targeting European luxury firms in August, cut its bearish bets “substantially” this month as their share prices dropped, said Wong, who didn’t identify the individual companies targeted. During October, the wagers accounted for 30 percent of the fund’s profits from trades.

The fund gained almost 16 percent this year. That compares with the Eurekahedge Asia Long-Short Equities Hedge Fund Index retreating 6 percent in the first nine months. Preliminary numbers for October, with less than a quarter of funds reporting, indicated a year-to-date decline of 9.1 percent, on track for being one of the worst performances since 2008.

By Bei Hu; editors: Katrina Nicholas and Paul Panckhurst.