June 21, 2026, (Inside AI) — Some Asia-based hedge funds have posted returns exceeding 100% in the first five months of 2026, powered by record stock market highs and concentrated bets on AI hardware and large language model leaders, sources familiar with the performance told Reuters.
The gains underscore how AI supply-chain dynamics, rather than geopolitical shocks, are driving markets. Despite volatility from the Iran war, Japan, South Korea, and Taiwan indexes hit all-time peaks, fueled by tight semiconductor supply and surging demand.
Supply-Chain Edge Fuels Triple-Digit Surge
Asia covers nearly the entire semiconductor stack, giving regional funds an early-mover advantage. They spotted supply-side constraints before global peers, positioning aggressively across AI subsectors. This allowed them to capture outsized returns as hardware and model leaders rallied.
Hong Kong's WT Asset Management saw its long-short China Focus fund net 103% year-to-date through May, after gaining over 20% in May alone. Its long-only fund rose 67.5%, a source said. Bets on AI hardware and Chinese techs like chipmaker Hua Hong Semiconductor and AI agent Knowledge Atlas (Zhipu AI) drove performance.
WT was a cornerstone investor in Knowledge Atlas, whose shares surged more than 1,000% since its January Hong Kong listing. Assets at WT, run by veteran investor Wong Tongshu, have grown rapidly to around $10 billion, another source noted.
New Funds Ride the Wave
Other tech-focused funds also capitalized. E20 Capital, a Hong Kong hedge fund launched in 2025, posted a net gain of 136% in the first five months. Its flagship $2 billion Global Opportunity Investment Fund benefited from positions in memory, optics, and CPUs, a source said.
Long-time tech investor Trivest Advisors gained 88.9% in the same period, according to another source. WT declined to comment, while E20 and Trivest did not respond to requests for comment.
Market Rally Defies Geopolitical Headwinds
China's Shanghai Composite hit its highest in over a decade. South Korea's KOSPI surged almost 100% year-to-date. Japan's Nikkei 225 and Taiwan's weighted index rose roughly 31% and 53%, respectively.
Navin Raj Jaidev, senior investment director at Cambridge Associates, said Asia offers increasing opportunities for outsized returns. He noted many AI supply-chain firms in the region
"remain under-covered and under-recognised by global investors."
He added that themes like corporate governance reforms and block trades are gaining traction. The performance signals that AI-driven momentum can overpower macro risks, but concentration in a few names raises questions about sustainability if supply-demand dynamics shift.
