John Paulson has had a rough year, in fact the worst of his career reports Bloomberg, but if October is any indication, he could be on the rebound. The popular fund manager, notorious for being bullish about economic recovery by the end of 2012, was able to pare his year to date losses after posting positive returns on all of his funds in October.
John Paulson’s Advantage Funds
John Paulson’s main fund, the Advantage Plus Fund, gained +2.4% in October, thanks largely to the recent equity rally. Stocks were up thanks to a combination of higher than estimated earnings and optimism over the Eurozone debt crisis. The gains pushed the year to date loss for the Advantage Plus Fund from -47%, which is where it was at at the end of September, to -44%. The gold share class also advanced. It went up +3.3%, bringing the year to date loss to -27%. Paulson’s Advantage Plus Fund focuses on profits from corporate events, like takeovers or bankruptcies, and uses leverage to amplify returns. John Paulson’s Advantage Fund is, by comparison, dollar denominated but uses a similar strategy as his Advantage Plus fund. It gained +4.7% in October, bringing its year to date losses to -29%. The gold share classs of this fund grew +8.3% in October, which brought its losses to -12 percent for the first 10 months of 2011. For most of Paulson & Co.’s funds, investors can choose between dollar-denominated and gold-denominated versions.
John Paulson’s Other Funds
John Paulson had good luck in October with his other funds as well. Paulson’s Recovery Fund, which invests in long positions Paulson believes are depressed in value because of the economy, grew +10% in October. The strong growth last month brought the fund’s year to date returns to -25%. In comparison, the gold share class gained +13%, bringing its year to date decline to just -11%. Paulson’s Partners Enhanced Fund, which focuses on investing in emerging companies, increased +3.3% in October, bringing its year to date return to -17%. The gold share class rose +7.3% last month, pushing its year to date returns to +2%. Paulson’s Credit Opportunities Fund also gained in October, rising +4.9% last month and bringing its year to date returns to -15%. The gold shares swelled +7.5% in October, bringing its year to date returns to +2%. Paulson’s Gold Fund is up +9.4% year to date after gaining +8.3% in October.