Paulson & Co.'s gold fund continued its freefall in June, dropping a further 23% to end the first half of the year down 65%.
The newly-rechristened PFR Gold Fund, which manages primarily firm founder John Paulson's own capital, had been down 54% through May. The fund lost 25% last year.
Despite the huge decline, Paulson insisted that the fund could post a dramatic turnaround.
"Although the timing is uncertain, if you have a long-term view we believe the funds offer the potential for outsized returns," the firm said in a July 3 letter to investors, obtained by Bloomberg News.
The Gold Fund is Paulson's smallest, and it is also the only one of the firm's funds in the red this year. New York-based Paulson said last month that it would restrict the distribution of the fund's performance figures, reporting them separately from its other funds, in an effort to focus attention on the latter funds' better performance.