David Jane: The power of real-asset exposure

Back in 2008, before the financial crisis and accompanying bear market, Warren Buffett bet $1m (£800,000) a ‘plain vanilla' equity index strategy would beat a hand-picked selection of hedge funds. Obviously 2008 was not a pleasant year for the equity index strategy but, despite that huge setback, the S&P 500 index, for example, has beaten not just the average strategy but each of the five hedge fund of funds selected by his opponent. We are by no means advocates of indexation and, while this bet has in some places been seen as an active versus passive debate, we view it more as the power...