John Paulson's Advantage Plus fund lost 6.9 per cent in June, bringing the first-half decline for the hedge fund to 8.8 per cent, according to investors in the fund. The Advantage fund dropped 4.4 per cent in June and 5.8 per cent YTD.

Paulson, who runs the $33bn New York-based Paulson & Co., was positioned to profit from a jump in stocks including financial- services companies, according to investors.

The smaller Recovery Fund, marketed as a purer play on economic growth, fell 12 per cent in June while his Gold Fund climbed 7.3 per cent in June and 13 per cent for the year.