Saturday, 2 July 2016
Last updated 5 hours ago
Jun 11 2013 | 12:19pm ET
Earlier this month, Paulson & Co. said it would restrict the distribution of its Gold Fund's performance—and for good reason.
The $360 million fund—Paulson's smallest—fell a further 13% in May. The fund, which manages primarily firm founder John Paulson's own fortune, is down 54% this year.
Despite the huge losses, which follow a 25% decline last year, New York-based Paulson urged investors to stick with the gold fund, noting that valuations offer "significant upside." It added that it would not close the fund, which it has renamed the PFR Gold Funds, using the initials of Paulson and his gold specialists, Victor Flores and John Reade.
Paulson has been a gold bug for years, arguing that inflation will soar when the Federal Reserve begins to cut back on its quantitative easing program. But the precious metal last month entered bear-market territory for the first time in a dozen years as the Fed's bond-buying continues unabated.
Paulson, which allows investors to buy gold-denominated shares of all of its funds, said earlier this month that it would stop reporting the gold funds' results to all investors, complaining that their struggles were overshadowing strong returns by its other, larger products.