Asia-based hedge funds are grappling with significant losses in July, marking a sharp reversal from the double- and triple-digit returns many posted during the first half of the year.
The downturn is driven by a broad selloff in artificial intelligence and technology hardware stocks, which had been the primary engines of growth for systematic strategies earlier in 2026.
The shift reflects a broader market rotation away from heavyweight semiconductor names following their stellar quarterly performance.
Asian equity markets extended their decline on Thursday, with the MSCI Asia Pacific ex-Japan index falling 0.8% as selling pressure broadened across the region.
This volatility has disrupted the momentum that had defined the first six months of the year for many fund managers.
Systematic hedge funds are now reporting their poorest trading results in almost 12 months, according to industry data.