Warren Buffett Won His 10-Year Bet Against Hedge Funds. Here's What the S&P 500 Has Done Since It Ended.

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Buffett’s Bet Proves Power of Low-Cost Indexing

The S&P 500’s strong post-2017 gains highlight the advantages of passive investing over hedge funds.

Warren Buffett’s famous 2008-2017 wager showed that a simple, low-cost S&P 500 index fund crushed hedge funds mainly because fees eroded the latter’s returns. Since then, that same index fund has tripled, delivering about 15% annual returns excluding the 2008 crash. This underscores a crucial lesson for South African investors: costs matter, especially when comparing active managers on the JSE. Look at funds tied to local giants like Naspers or FirstRand – many charge fees that can eat into those gains in a market with less liquidity and higher volatility than the US. If you want steady market exposure without the premium, low-cost ETFs or index trackers, like those tracking the FTSE/JSE Top 40, make sense. On the currency side, remember the rand remains volatile versus the dollar (USD/ZAR) and can sway offshore returns on local holdings in unpredictable ways. That said, active funds might still have room to outperform during market stress here. We’re cautious but not dismissive. this is just our opinion and not financial advice