Hedge Funds Ride AI Rally to Double-Digit Gains as Markets Turn Selective
Hedge funds closed the year with double-digit returns, capitalizing on resurgent equity markets and a sustained appetite for risk. The recovery marks a sharp reversal from earlier volatility during monetary tightening cycles. Long/short equity and multi-strategy funds led the charge, while macro-focused strategies delivered uneven results.
Artificial intelligence emerged as the dominant market force, with semiconductor, cloud infrastructure, and data analytics stocks driving outsized returns. Funds positioned early in AI value chains reaped rewards from corporate spending surges and unbroken enthusiasm for productivity breakthroughs.
Liquidity conditions and clearer macro signals enabled managers to deploy capital with conviction. The alignment of economic data with corporate earnings strengthened active strategies, showcasing hedge funds' advantage over traditional investors in rapidly adjusting to regime shifts.
