It looks like Warren Buffett is winning his 'million dollar bet' against hedge funds

Shocker — Warren Buffett is winning a million dollar bet he made about investing 7 years ago.

Back in 2008, Buffett bet that the S&P 500 would beat sophisticated hedge funds over the next 10 years as the economy recovered.

Carol J. Loomis at Fortune reports that Buffett wagered on Vanguard's 500 index fund, which is now up 63.5 percent, compared with a hedge fund index made by Protégé Partners – the managers with whom he made the bet. 

Protégé's index is up an estimated 19.6 percent.

Though Buffett's index fund has beaten Protégé's selection the past six years, last year was a particularly bad one for hedge funds. Citi recently forecast a 30 percent decline in hedge fund profits due to poor performance in 2014. And a hedge fund benchmark from Preqin, a research company, registered its lowest return in three years.

Whoever wins the bet will donate $1 million to their charity of choice. (Each side initially put about $320,000 into a zero-coupon Treasury bond that they estimated would be worth $1 million by 2018. It's since been moved into Berkshire Hathaway stock, with a personal guarantee from Buffett of $1 million if the stock doesn't reach that price.)

Check back in three years to see who winds up in the money.

And read the full Fortune story here >>

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