Paulson Flagship Falls In April; Firm Backs Convertibles, MBS

Apr 26 2013 | 10:51am ET

With just a few days left in the month, it appears that April will be a lost one for Paulson & Co.

The New York-based firm's flagship Advantage Fund is down 2.4% on the month, Reuters reports. April's losses, primarily on gold, have cut the fund's year-to-date gains to 1.3%.

Advantage lost money not only on physical gold, which is down 17% this year, including 13% this month, but on gold-mining stocks, some of which have done even worse. Still, despite gold's troubles—including its worst two-day decline in 30 years—Paulson has said it is sticking the precious metal as an inflation hedge.

Firm founder John Paulson reiterated his belief in gold on a conference call with investors this week, in which he also discussed another favorite: convertible bonds.

Paulson told investors that its Credit Opportunities Fund currently has a quarter of its assets in convertible bonds. The firm pointed to its investment in Realogy Holdings convertibles. That debt has since been converted to equity, and the stock has jumped 14% this year.

Paulson also told clients this week that his firm's mortgage-backed securities portfolio—20% of the Credit Opportunities Fund—has also done well.


In Depth

Royalties: The Alternative Assets of the Music Industry

Jul 8 2016 | 7:01pm ET

Recent market volatility has investors seeking greater insight into alternative...

Lifestyle

Vortic: Making Great American Watches Again

Jul 25 2016 | 6:29pm ET

If you are compelled by stories of entrepreneurial vision & drive, or simply...

Guest Contributor

MPI: Like Stellar Returns? Better Understand the Risks First

Jul 22 2016 | 8:44pm ET

When the press reports extraordinarily strong relative or risk-adjusted returns...