Warren Buffett Lost Ground In Million-Dollar Hedge Fund Bet In 2015 by Carol J. Loomis, Fortune
In 2015, the Berkshire CEO’s commanding lead in a 10-year market wager was cut oh-so-slightly
Results are in for 2015, the eighth year of the 10-year Million-Dollar Bet, and for once—but don’t get too excited—there’s something mildly positive to say about the hedge fund side.
Recall the bet first: It’s between Berkshire Hathaway CEO Warren Buffett and a money management firm, Protege Partners. Buffett is betting (with his own money, not Berkshire’s) that the stock market performance of a big index fund can beat the performance—averaged—of five funds of hedge funds carefully chosen by Protege.
And that positive news about the hedge fund side? The five funds of funds won in 2015, beating the index fund for only the second year out of eight.
Even so, the winning margin was slight. The five funds, on the average, gained 1.7% during 2015 vs. the 1.36% return rung up by Buffett’s index fund.
And then there’s what really counts: This bet is only two Decembers from being over, and Buffett has a commanding lead. For the first eight years of the bet, the index fund he’s backing is up 65.67% against 21.87%, on the average, for the five funds of funds.
That makes Buffett appear unbeatable. And yet…