Paulson's flagship fund up 12%; wipes year's losses

Date: Wednesday, October 6, 2010
Author: Jennifer Ablan, Reuters

* Flagship Advantage Plus fund up 12.41 pct in September

* September's stock rally helps wipe out losses for year

* Gold still on a hot streak, up 5.67 pct last month (Adds details on fund performance, context on indexes)

NEW YORK, Oct 5 (Reuters) - Bolstered by a surprising September stock-market rally, billionaire hedge fund manager John Paulson's flagship Advantage Plus fund jumped more than 12 percent last month, recovering this year's losses, according to a person familiar with the fund.

Paulson's other portfolios, including the Recovery, Gold and Credit Opportunities funds, all posted positive returns in September.

Paulson, who manages about $32 billion, told investors on Tuesday that his Advantage Plus fund rose 12.41 percent in September, according to the person familiar with the matter.

In comparison, Advantage Plus fell 4.27 percent in August, leaving it down 11 percent for the year. [ID:nN08108455]

Paulson's Credit Opportunities fund was up 3.94 percent in September, while the Recovery fund gained 8.47 percent and the gold fund returned 5.67 percent.

A spokesman for Paulson declined to comment.

Paulson's performance figures are widely followed by the industry as many of his bets have paid off, particularly his heavy exposure in gold through the SPDR Gold Trust. Gold hit another record on Tuesday at $1,341.20 an ounce as dollar losses continued to deepen. Indeed, Paulson's claim to fame was his bet that housing prices would fall three years ago.

Paulson benefited from the stock market rally in September after posting lackluster results in August, when the flagship fund lost more than 4 percent. [ID:nN07247495]

The Dow Jones Industrial Average .DJI was up 8 percent in September, while the broader S&P 500 index .SPX settled up more than 9 percent.

The gains defied predictions for a "September swoon," due to its dubious distinction as being the worst month of the year for stocks.

By comparison, the fixed income market posted slight gains in September. But that advance was pale when compared with the monstrous bond rally earlier this year.