Much has been made of Warren Buffett’s million-dollar bet, hatched at the start of 2008, with the money management firm Protégé Partners. Buffett bet on an index fund that invests in the S&P 500; Protégé bet it could pick five “funds of funds” that would do better.
After eight years, as Buffett gloated at his company’s recent annual meeting in Omaha, the S&P 500 is killing it. The fund Buffett picked, Vanguard 500 Index Fund Admiral Shares (which invests in the S&P index) is up 65.67%; Protégé’s funds of funds—funds that own a portfolio of positions in a range of hedge funds— are up, on average, a paltry 21.87%.
