Asian and emerging markets (EM) hedge funds delivered a standout performance in 2025, marking their best annual gains since 2017. According to HFR data cited in Hedgeweek, the HFRI Emerging Markets Index surged 16.8% through November, significantly outperforming the global hedge fund composite of 10.9%. This resilience was underscored by eleven consecutive months of gains, driven by declining interest rate expectations, improved trade dynamics, and easing geopolitical tensions.

Regional and Strategy Highlights:

1. 1. MENA Leads: The Middle East and North Africa sub-region was the top performer, jumping 20.5%.
   2. Broad Strength: China (+17.7%), Japan (+17.6%), and Latin America (+17.0%) all showed robust double-digit growth.
   3. Equity Focus: Equity hedge strategies remained the primary global performance engine, up 15.2% year-to-date.

Despite a sharp 6.1% correction in cryptocurrency markets during November, EM managers navigated the volatility with sophisticated tactical frameworks. While crypto-exposed funds in Korea and China were tested, the HFR Cryptocurrency Index maintained a year-to-date gain of 12.4%.

This strong performance has triggered a “resurgence in institutional interest.” Total EM hedge fund assets climbed to $272.1 billion, with Asian hedge fund assets hitting a record $143.2 billion. As 2026 begins, HFR President Kenneth J. Heinz notes that managers remain flexible, balancing the “tsunami of liquidity” against concerns over AI-related investment sustainability and digital asset fluctuations. This tactical discipline is expected to continue attracting significant institutional capital throughout 2026.

End Notes

Source: https://www.hedgeweek.com/asian-and-emerging-markets-hedge-funds-advance-amid-cryptocurrency-volatility/