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arren Buffett appears to think investment advisers do more harm than good. The sad reality is that in most cases he is correct. The `Oracle of Omaha' went on a verbal rampage at the recently held Brookshire Hathaway annual meeting. His target: hedge fund managers and investment advisers. This is not a new opinion for the investment industry icon. Buffett has been preaching this for years, and this time he referred to his comments as a "sermon." The Brookshire Hathaway chair has a W Buffett: High fees for actively managed funds `eat up capital like crazy' Dollars & Sense Guest Contributor 33 | Thursday, May 19, 2016 | OAKVILLE BEAVER | www.insideHALTON.com Buffett backed up his opinion with hard evidence. Comparing returns He apparently compared the returns of Vanguard S&P 500 Index fund with the returns of ve funds chosen by a New York hedge fund company. In 2008, Protege Partners, with their hedge fund investment strategy, entered in a bet with Buffett. They bet ve fund-offunds they picked would outperform the Vanguard S&P 500 Index fund, after fees. Buffett is winning the bet. Peter Watson From 2008 to the end of 2015, the S&P index fund had a return of 66 per cent. The actively-managed funds Protege Partners chose had a return of just 22 per cent. Buffett's message was simple -- investment managers who attempt to generate returns higher than market returns, with a strategy of actively managing portfolios while charging high fees, fail miserably. Fees the culprit The culprit is fees. Buffett said, "Supposedly sophisticated see Big on p.37 long history of recommending individual investors diversify their portfolio by investing in low-cost, widely-diversi ed, index funds. Local Events Find Fin WITHIN YOUR COMMUNITY www.insidehalton.com Stay cool & save with an AC checkup Don't get sticky $ ONLY Regular price $119.99 49 * Early season AC checkup can help: prevent inconvenient breakdowns prolong the life of your equipment lower your monthly cooling bills CALL 1-866-907-0535 TODAY *Offer ends July 11, 2016. Certain terms and conditions apply. The price of $49 reflects a $70.99 discount + HST. Offer cannot be combined with another offer. Offer is not available in all areas. TMEnercare, the design and "It's Better Inside" are trademarks of Enercare Inc., used under license. $49ACCheckUp_Oakville