Buffett bet $1 million in 2007 that an index fund would out perform a basket of hedge funds over a decade. The proceeds would go to charity, and Buffett designated his local Girls Inc. affiliate as the recipient if he won. When the closing bell rang at the New York Stock Exchange Friday, the famed investor locked in his victory.
Buffet, the chairman of Berkshire Hathaway Inc. has said throughout this year that he is confident he would win. From the start of the bet through the end of 2016, Mr. Buffett’s S&P 500 index fund returned 7.1% compounded annually. The competing basket of funds of hedge funds selected by asset manager Protege Partners returned an average of 2.2%.
And because of a twist in the bet’s history, Girls Inc. of Omaha is likely to get much more than $1 million.