WORLDVIEW: How Warren Buffett drove a very long nail into money managers’ coffins

By Alec Hogg

For years, Berkshire Hathaway chairman Warren Buffett kept banging away how fees destroy investor returns. To prove his point, he put up $500,000 as a reward for any investment professional who believed they could beat the market over a decade.

Nine years ago, Ted Seides of Protégé Partners, a US specialist fund-of-hedge-funds firm, took up the challenge. He put together five pools each of which invested in a group of underlying hedge funds, 100 in all. Buffett's bet was the Vanguard S&P 500 exchange traded fund which tracks the US market's umbrella index, charging a fee of just 5 basis points.

___STEADY_PAYWALL___