Bill Ackman's gains for the year got wiped out in a matter of weeks

Pershing Square Holdings, the $7.4 billion publicly-traded vehicle led by Bill Ackman, has erased all of its gains in a matter of weeks and is now down for the year.

Ackman said in an investor update: "However there has been significant volatility in the investment markets over the past few weeks, largely driven by the decline of the Chinese stock markets, and the fear that slowing growth in China will have repercussions for businesses around the world. At the date of this report, the year to date investment performance has been erased, and the Company is at a loss position for the year."

Pershing Square Holdings had been up 10.1% through the end of July, the letter said. During the first half of the year, the fund returned 3.2% net of fees. In July, the fund gained 6.6%.

Markets have gotten have gotten clobbered in the last week. On Monday, the Volatility Index (VIX), a key measure of fear in the market, hit its highest level since 2009.

Ackman, 49, is known for typically being a long-only activist investor, taking large positions in a handful of companies.

Some of the companies in the portfolio include: Allergan, Valeant Pharmaceuticals, Actavis, Nomad Foods, Canadian Pacific Railway, Mondelez, Air Products & Chemicals, Zoetis, The Howard Hughes Corporation, Platform Specialty Products. Ackman is also massively short Herbalife, a multi-level marketing company that he believes is a "pyramid scheme."

In the letter, Ackman said that they do not believe they will have to exit those investments.

"As a result of our investment principles and the resulting composition of the portfolio, we do not believe that stock market and commodity price declines, currency devaluation, and/or economic weakness in China will have a material impact on the intrinsic value of the portfolio," Ackman wrote.

"While stocks can trade at any price in the short term, because we do not use margin leverage, we will not be forced out of any investment at an inopportune time. As a result, we have made no meaningful recent changes to our current portfolio holdings other than the addition of greater notional short currency exposure principally through the purchase of put options."

In the letter, Ackman also noted that they short stocks on occasion for hedging purposes. He also said they own large notional currency hedges.

In 2014, Ackman was one of the best-performing hedge fund managers, gaining about 40% compared to the S&P 500's 13% rise.

Here's a chart of Pershing Square Holdings: