Hedge fund fees Buffett set aside multiple pages of his letter to call out the hedge fund community and their unwarranted fees. "When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients," Buffett wrote.
He continued his attack by releasing documents of his 10-year performance bet between a pick of his own - a low-cost S&P 500 index fund managed by Vanguard - and asset manager Protégé Partners that chose to bet on the average performance of five hedge funds. After nine years of the 10-year bet, the index fund selected by Buffett is up 85.4 percent, and the average of the five hedge funds is a distant second - up 22 percent.
If a statue is ever erected to honor the person who has done the most for American investors, the handsdown choice should be Jack Bogle. For decades, Jack has urged investors to invest in ultra-low-cost index funds.
In his early years, Jack was frequently mocked by the investment-management industry. Today, however, he has the satisfaction of knowing that he helped millions of investors realize far better returns on their savings than they otherwise would have earned. He is a hero to them and to me.