AI stock rout in July hits Asian multi-strategy hedge funds in Japan, South Korea, China

Asian multi-strategy hedge funds suffered their steepest monthly losses of 2026 in July as an AI and tech stock selloff erased first-half gains, with declines ranging from 3% to 9%. Selloffs in Japan, South Korea, and China hit semiconductor stocks as investors worried about technology spending and Middle East tensions. Despite losses, multi-strategy funds beat stock-picking peers, which lost an average 15.2% in July, their worst month on record, Goldman Sachs estimated. Regional indices fell sharply: South Korea's Kospi plunged 22% and Japan's Nikkei 225 dropped 8%. Funds such as Polymer Capital lost 6.9%, while Arrowpoint cut risk before the downturn, limiting its decline to 2.6%.