John Paulson, the billionaire who is betting on an economic recovery by the end of 2012, lost 34 percent this year in his largest hedge fund, according to sources. Paulson’s Advantage Plus Fund lost 15 percent last month, said the people.

That contrasts sharply with three Bridgewater Associates hedge funds which shined in Bloomberg Markets’ annual ranking in February, including its flagship, Pure Alpha II. The No. 3 fund posted a 38 percent return for the 10-month period through October 2010.