Dominating for the Future
Titan of the investment industry, Warren Buffett, has been well documented as one of the leaders of the business world for quite some time, and with his latest action, has further cemented himself as such. Recently it was reported that Mr. Buffett made a wager with a group of hedge fund managers that by investing in an S&P 500 passive index fund, he would be able to recoup better returns than his competitors. The wager, which will be coming to a close in the near future, is for the amount of $1 million that will be donated to the winner’s charity of choice. While Mr. Buffett’s method has been challenged by some of his peers, its seems as if Mr. Buffett will claim the victory in regards to the recent wager.
Despite the fact that Warren Buffett will be victorious in his wager with the group of hedge fund managers, Timothy Armour, Chairman and Chief Executive Officer of Capital Group, seems to see an error in some of Mr. Buffett’s calculations. According to Mr. Buffett, the market today is flooded with expensive funds that do not offer quality residual returns. Backing up the stance he took in making his recent wager, Mr. Buffett see’s a commitment to low-cost investments as the key to long-term success in the investment world, a claim that Timothy Armour does not dispute. While Mr. Armour agrees with the fact that throughout history, actively managed hedge funds have not been as profitable as their passive index counterparts, which are often deemed safer, actively managed funds should not be overlooked. Read more about Timothy Armour.
Timothy Armour is the current Chairman and Chief Executive Officer of Capital Group and he has dabbled in the world of investment for over 30 years, all of which have been with Capital Group. He graduated from Middlebury College in 1983.