Japanese hedge funds are heading for record returns this year as investors bet that Prime Minister Shinzo Abe's economic policies will succeed in reviving the world's third-largest economy.

Stratton Street Capital LLP's warrant fund returned more than 300 percent, while the Hayate Japan Equity Long-Short Fund almost doubled. The Eurekahedge Japan Hedge Fund Index, which tracks about 80 funds, returned 24 percent in the 11 months through November, heading for the best year since the Singapore-based researcher began compiling data in 2000.

Japanese hedge funds swung from the world's worst performers in 2012 to the best as the central bank's reflation efforts put the benchmark Topix index on course for the biggest increase in 14 years and weakened the yen by 17 percent versus the dollar. Assets at the Japan-focused funds tracked by Eurekahedge increased $451 million in the second half of 2013, the most since the six months that ended in August 2011.