- Buffett has written against hedge funds' hefty fees and their promise of outperformance.
- During the bet from 2008 through 2017, the S&P 500 index fund Buffett picked gained 125.8%, versus 87.7% for the top-performing fund of funds that was part of the bet.
The final scorecard for Warren Buffett's $1 million bet against hedge funds is just brutal
Buffett has railed against hedge funds' hefty fees and their promise of outperformance.
Warren Buffett's letter to shareholders released Saturday showed the final scorecard of his 10-year bet against hedge funds.
It's brutal — for the hedge funds.
Buffett entered the bet as a sort of protest against the hefty fees that hedge funds charge clients for the promise of outperformance. The fees — typically 2% of the investment's value and 20% of the profits — eat into clients returns, Buffett argued, and said returns do not typically justify those fees compared to the returns an investor could get from a low-cost S&P 500 index fund.
The table below shows just that. The S&P 500 index fund gained 125.8% from 2008 through 2017, versus 87.7% for the top-performing fund of funds that was part of the bet.
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