Warren Buffett Big Bet Against Hedge Funds

An interesting wager between Warren Buffett and Protégé Partners LLC, a money management firm that runs funds of hedge funds, became public recently.

Buffett has long held that the best investment for most investors in the simple index fund. He believes, as do we at Blue Ocean Portfolios, most investors will achieve better returns over the long haul by NOT paying money managers to actively manage an investment portfolio.

Protégé disagrees.

So Buffett and Protégé each put up about $320,000 on a wager over whether Vanguard's S&P500 index fund will outperform five funds of hedge funds selected by Protégé over the next 10 years. The winner will be decided based on total average returns net of all fees, expenses, and costs. Proceeds of the bet go to the charity of the winner's choice.

The question for you as an investor is: Would you bet against Warren Buffett?

For more details on the wager see the CNN Money article here.

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