Sources familiar with the performance of some?Asia's hedge funds claim that they have delivered returns in excess of 100% in the first five months?of the year. They attributed this to record highs on the stock market and bets made on AI hardware, large language models leaders and wagers placed on AI hardware.

Market participants claim that regional funds were faster to spot supply-side restrictions as Asia covers almost the entire semiconductor stack. This allowed them to capture opportunities in AI subsectors early.

This performance shows that the market volatility caused by the Iran War has not deterred the AI-driven rally in this year. Growing demand and tight supply have pushed Japan South Korea and Taiwan up to new records.

WT Asset Management in Hong Kong saw its China Focus long-short fund achieve a net return 103% for the year ended May, after gaining more than 20% just in May. Sources familiar with the matter said that its long-only fund had risen 67.5%.

Sources said that the performance was boosted by the bets made on AI hardware and Chinese domestic?techs such as Hua Hong Semiconductor, Knowledge Atlas and chipmaker Hua Hong Semiconductor.

WT is listed as a cornerstone shareholder in Knowledge Atlas (also known as Zhipu AI), whose shares are up more than 1,000% in the past year following its Hong Kong listing.

Another source reported that the assets under management by WT, which is run by veteran investor Wong Tongshu has grown to $10 billion.

The wave has also been ridden by other tech-focused funds.

Sources claim that E20 Capital (a Hong Kong hedge fund founded in 2025) posted a gain of 136% during the first five month period, with its memory, opticals, and CPUs positions boosting returns for its flagship Global Opportunity Investment Fund.

According to another source, the long-term?tech investor, Trivest Advisors,?gained an 88.9% gain in the first five month of the year.

WT Asset Management refused to comment while E20 Capital, Trivest Advisors and WT Asset Management did not respond to comments.

China's Shanghai Composite Index has reached its highest level in over a decade.

South Korea's KOSPI is up almost 100% this year. Japan's Nikkei and Taiwan's Weighted Index are also up 31% and 53% respectively.

Navin 'Raj Jaidev is a senior investment manager at Cambridge Associates. He said that Asia presents increasing opportunities for outsized returns as many AI supply chain firms in the area "remain uncovered and under-recognised" by global investors.

He said that themes like corporate governance reforms, block trades and other similar topics are gaining in popularity. (Reporting and editing by Summer Zhen)

(source: Reuters)