Asia Pacific Allocators Show Strong Interest
The findings come from an aggregated and anonymized survey of roughly 280 institutional allocators globally. Together, these investors represented more than $1 trillion in assets.
BofA said the survey points to continued interest in hedge fund strategies as investors look for ways to diversify portfolios and manage periods of market volatility.
The bank's fourth annual Asia Alternatives Forum, held in Hong Kong on May 21, brought together more than 20 global and Asia-based hedge fund managers and 120 institutional allocators. The participants represented approximately $700 billion allocated to hedge funds.
Which Hedge Fund Strategies Are Attracting Interest?
According to BofA's 2026 Hedge Fund Outlook, Asia Pacific-based allocators indicated plans to increase investments across several hedge fund strategies.
These include equity directional and low net strategies, event-driven strategies, credit, quant equity and discretionary macro.
The range of strategies shows that allocator interest is not limited to one particular approach. Investors are considering different ways to seek returns while managing portfolio risks and market volatility.
Diversification Remains a Key Focus
Vanessa Bogaardt, head of Global Capital Strategy & Consulting at BofA Securities, said allocator sentiment remains robust, with investors focused on resilient performance and greater diversification across hedge fund strategies.
Bogaardt cited lower drawdowns during periods of market stress and continued inflows as signs of sustained interest in hedge fund strategies.
For institutional investors, diversification can provide exposure to different investment approaches rather than relying entirely on traditional asset classes.
Hedge Fund Industry Assets Reach $5.2 Trillion
BofA's release also cited industry data showing that hedge fund assets reached $5.2 trillion at the end of 2025.
The bank said hedge fund performance was up 11.7% in 2025, while industry-wide inflows reached $116 billion. According to BofA, that was the highest level of annual inflows since 2007.
These figures provide broader context for the investor interest highlighted in the 2026 Hedge Fund Outlook.
Why Investors Are Watching Hedge Funds
Market volatility and the need for portfolio diversification are among the considerations BofA highlighted for institutional investors.
BofA said investors are focused on resilient performance and diversification across a range of hedge fund strategies. The bank also noted that its Capital Strategy team works with clients to navigate volatility, identify opportunities and manage risk.
The reported allocation plans span multiple approaches rather than concentrating on a single strategy.
What BofA's Outlook Shows
The 2026 BofA Hedge Fund Outlook provides a snapshot of allocator sentiment based on its global institutional survey.
The findings show strong interest in increasing hedge fund exposure among Asia Pacific-based allocators, while the broader industry data points to significant assets and inflows across the sector.
However, the survey reflects investor intentions and sentiment rather than guaranteed future allocations or investment performance.
Bottom Line
Bank of America's 2026 Hedge Fund Outlook shows continued interest from institutional allocators, particularly across Asia Pacific. Nearly two-thirds of surveyed Asia Pacific allocators planned to increase hedge fund investments, with interest spread across equity, event-driven, credit, quant equity and macro strategies.
The findings come as the wider hedge fund industry reports substantial assets and continued investor activity.