Asia hedge funds post triple-digit gains on AI bets

E20 Capital posted a 136% net gain through May, while WT Asset Management’s China Focus fund returned 103%, according to Reuters.businesstimes
The rally reflects surging AI infrastructure spending that has lifted chip stocks and pushed China’s Shanghai Composite to a decade high.businesstimes
Morgan Stanley ↘0.80% estimates hedge funds are more overweight semiconductors than at any point in the past decade.linkedin

Asia Hedge Funds Post Triple-Digit Gains on AI Supply Chain Bets

Several Asia-based hedge funds delivered returns exceeding 100% in the first five months of 2026, capitalizing on record highs across regional stock markets and concentrated wagers on AI hardware, semiconductors, and large language model companies, according to Reuters reporting published on Sunday.businesstimes

Standout Performers

Hong Kong-based WT Asset Management saw its long-short China Focus fund book a net return of 103% year-to-date through the end of May, after rising more than 20% in May alone. Its long-only fund was up 67.5% over the same period. Bets on AI hardware and domestic Chinese technology firms, including chipmaker Hua Hong Semiconductor and AI agent company Knowledge Atlas, contributed to the performance, a source familiar with the matter told Reuters.usnews

E20 Capital, a Hong Kong-based hedge fund launched in 2025, posted a net gain of 136% in the first five months, with positions in memory, optics, and CPUs boosting returns at its flagship $2 billion Global Opportunity Investment Fund. Long-time tech investor Trivest Advisors gained 88.9% over the same period.businesstimes

An AI-Fueled Rally Across the Region

The outsized returns reflect a broader wave sweeping Asian markets. China’s Shanghai Composite has climbed to its highest level in more than a decade, according to the Business Times. The rally has been driven by surging demand for semiconductors and AI infrastructure as major technology firms ramp up spending on data centers and advanced chips, tightening supply and lifting prices across the sector.linkedin

Morgan Stanley estimates hedge funds are now more overweight semiconductors than at any point in the past decade, with AI supply-chain stocks accounting for a large share of recent gains. Goldman Sachs reported in April that Asia- and China-focused fund managers were leading global hedge fund performance, with long-short equity funds posting their best monthly returns since the firm began tracking the data in 2016.reuters

Broader Industry Tailwinds

The triple-digit gains stand out against the broader hedge fund industry, where stock-picking funds rose 6.5% in April alone — their best month since 1999 — while technology-focused funds gained 10.3%, a record for the index. The performance has come as total hedge fund industry capital surpassed an estimated $4.98 trillion heading into late 2025, according to Hedge Fund Research data.hfr