One of last year's top-performing hedge fund managers, Deepak Narula, is suffering a reversal of fortune as the mortgage bonds that steered him to the top of the industry in 2012 are now delivering losses, Reuters reports.

His Metacapital Management's roughly $1.5 billion flagship fund was down 5.66 percent for the year through June 14, according to an investor with knowledge of the numbers.

The loss is particularly given the fund's 41% gain last year.