Hedge funds focused on Chinese equities outperformed their global peers in the first half of 2025, posting double-digit gains amid a strong rebound in Hong Kong markets and rising bets on artificial intelligence and emerging consumer trends. According to data from With Intelligence, the Greater China Equities Hedge Fund Index rose 15%, outpacing regional and strategy benchmarks.
Hong Kong-based Triata Capital recorded a standout 45% return in the first six months—and 62% by mid-July—by betting on undervalued AI software, data centers, and internet platforms. Founder Sean Ho emphasized the ongoing upside potential in China’s AI software sector, even after recent market excitement surrounding DeepSeek, News.Az reports, citing Reuters.
Another major performer, FountainCap Research & Investment, saw its flagship fund climb 22% from January to June, driven by investments in what it calls the "cute economy"—emotionally engaging brands targeting younger consumers, including toymaker Pop Mart, whose shares have surged nearly 200% this year.
Despite sharp volatility in April—triggered by former U.S. President Donald Trump’s surprise announcement of “reciprocal tariffs” on all trading partners—Chinese fund managers navigated the turbulence with agile hedging strategies. Funds like Golden Nest Capital reduced portfolio exposure and managed to post consistent monthly gains through the turmoil.
The Hang Seng Index and MSCI China both surged over 15% in the first half of the year, with July continuing the rally as mainland stocks caught up. The Shanghai Composite Index recently reached a new yearly high.
As geopolitical tensions appear to ease and valuations remain attractive, many fund managers remain bullish. Steven Luk of FountainCap called the current environment a “silent bull market,” noting that global capital is yet to fully return. Similarly, Milltrust International CEO Simon Hopkins said his firm plans to increase its exposure to China, citing the country's growing strength in AI and precision manufacturing. “There is going to be a huge recognition that Chinese technology is a place that is going to attract a lot of capital,” he said.
