Paulson & Co Advantage Fund, the best known fund of John Paulson, the hedge fund billionaire has declined by 2.4% in April. This is largely in part due to the increase in the sell off of gold, according to an anonymous source familiar with the firm's finances.
The source confirmed that the Advantage fund would still be making money this year but at a modest 1.3% gain.
The fund's holdings are in several gold mining stock, amongst them AngloGold Ashanti Ltd. AngloGold has declined by about 40% for the year, which in turn have affected the returns of the Advantage fund.
This is a trend in the industry, with many company stocks tied to gold having declined significantly. One of these is SPDR Gold Trust, the world's largest gold exchange traded fund. Overall, investors have removed US$10 billion worth of funds from gold ETFs according to Markit, a financial information firm.
This decline have caught many hedge funds flatfooted. Paulson has announced that he would be updating all his clients about all the funds in his portfolio, most especially the gold investment portfolio.
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