Warren Buffett won a million-dollar wager in 2017 by proving that a basic S&P 500 index fund could easily outperform highly paid hedge fund managers over ten years.

A closer look

Warren Buffett won a million-dollar wager in 2017 by proving that a basic S&P 500 index fund could easily outperform highly paid hedge fund managers over ten years. Protégé Partners accepted the challenge in 2007, confidently selecting five elite portfolios backed by Ivy League minds and extremely expensive proprietary algorithms. By the decade's end, the passive Vanguard fund returned 7.1% compounded annually, entirely humiliating the active managers who averaged a pathetic 2.2% after aggressively extracting their exorbitant management fees. The Oracle of Omaha effectively demonstrated that Wall Street's most prestigious luxury service is often just a highly sophisticated wealth-transfer mechanism from gullible rich people to arrogant guys wearing fleece vests. It ultimately proves that doing absolutely nothing with your portfolio is statistically superior to paying a caffeinated finance bro millions to randomly gamble your retirement savings on corporate derivatives