SPDR Gold Trust (ETF) (GLD), AngloGold Ashanti Limited (ADR) (AU): Despite Losing Big, John Paulson Still Loves Gold

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Hedge fund titan John Paulson has received a lot of negative press in recent months over his firm’s gold position. Paulson’s fund, Paulson & Co., maintains a sizable investment in gold.

PAULSON & COBut as gold has tumbled, Paulson’s gold holdings have performed terribly. According to Bloomberg, in June, Paulson’s gold fund was down as much as 65% this year.

Despite suffering enormous losses, Paulson sees no reason to give up. At CNBC’s Delivering Alpha Conference last week, Paulson said the case for owning gold hasn’t changed

Paulson’s gold holdings

As of his firm’s last 13F filing, Paulson held numerous gold-backed positions. Notably, Paulson had a huge stake in the SPDR Gold Trust (ETF) (NYSEMKT:GLD) Shares. In fact, it was the firm’s single biggest position, with over 21 million shares held at a market value of over $3 billion.

Paulson also owned a number of gold miners. AngloGold Ashanti Limited (ADR) (NYSE:AU) was his fourth biggest position with over 28 million shares, while NovaGold Resources Inc. (USA) (NYSEMKT:NG) was down at number 29 with just under 36 million shares. But even being his 29th largest position, NovaGold was still better than average — Paulson holds over 100 different stocks.


SPDR Gold Trust (ETF) (NYSEMKT:GLD) isn’t the only gold-backed ETF, but it is by far the largest. Its $37 billion of assets dwarf the $11 billion held by its iShares Gold Trust rival.

SPDR Gold Trust (ETF) (NYSEMKT:GLD) has an expense ratio of 0.40%, meaning that investors who hold GLD in place of gold bullion have to pay a fee for the privilege. Nevertheless, buying and selling gold bullion can often be difficult and time consuming. For many, holding shares of SPDR Gold Trust (ETF) (NYSEMKT:GLD) may be preferable to owning the actual metal.

SPDR Gold Trust (ETF) (NYSEMKT:GLD)’s performance has matched spot gold prices fairly well. Over the last year, GLD is down about 18.6%, while spot gold prices are down about 18%.

For the most part, GLD should be expected to perform roughly in line with the actual price of gold going forward.

Paulson has argued for AngloGold Ashanti Limited (ADR) (NYSE:AU) in the past

Paulson has been a vocal proponent of AngloGold Ashanti Limited (ADR) (NYSE:AU) in the past. At last year’s Ira Sohn Investment Conference, Paulson pitched AngloGold Ashanti Limited (ADR) (NYSE:AU) as one of his best investment ideas.

Back then, he argued that it was cheaper to own AngloGold Ashanti Limited (ADR) (NYSE:AU) than it was to own GLD, arguing that owning AngloGold Ashanti Limited (ADR) (NYSE:AU) was equivalent to owning gold at $133 per share. Unfortunately for Paulson, that investment hasn’t worked out. Shares of AngloGold are down nearly 60% in the last year, worse than the actual metal.

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