Hedge fund manager John Paulson continued to scale back his position in the world’s largest gold exchange traded fund in the fourth quarter, while George Soros and PIMCO were among the notable buyers of gold ETFs, regulatory filings show.
Paulson cut his gold ETF holdings by about $600 million in the final quarter of 2011, Reuters reports. The hedge fund manager correctly bet against subprime mortgages, but large positions in financial stocks have burned Paulson recently.
In the third quarter, Paulson & Co. cut its holdings in gold ETFs by 36%. [Paulson Scales Back Gold ETF Position]
Selling gold ETFs was likely driven by client redemption needs as Paulson remained bullish on the precious metal, according to the report.
Separately, Soros and investment manager PIMCO boosted their stakes in SPDR Gold Shares (NYSEArca: GLD), which holds nearly $71 billion in assets. Gold futures were trading over $1,730 an ounce Wednesday morning. [Hedge Funds Tap ETFs for Stock, Gold Trades]
Paulson’s sales of GLD “have been more than offset by purchases by other investors,” according to Reuters. The ETF’s holdings climbed nearly 2% in the fourth quarter.
Many hedge funds use ETFs for low-cost, liquid exposure to gold. [Gold ETFs and Hedge Funds]
The gold ETF is up 10% year to date.
SPDR Gold Shares
Full disclosure: Tom Lydon’s clients own GLD.
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