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This is a good one.  In case you don’t know, Warren Buffett made a bet with a NYC based hedge fund that wagered an index fund versus the performance of a group of fund of funds over a 10 year period.      Fortune has the full story:

“Results are in for 2011, the fourth year of the 10-year wager that is sometimes called, rather loosely, The Million-Dollar Buffett Bet. In this competition about investment performance, Warren Buffett is contending that an S&P 500 index fund will outscore the average return of five hedge funds of funds picked by his betting opponent, New York asset management firm Protégé Partners.

The standings now — which we will reveal in a minute — inevitably bring to mind Buffett’s reaction after the bet’s first year, 2008.

Both sides were clobbered in that market year from hell. But Protégé’s fund-of-funds picks (whose names, by the terms of the bet, have never been publicly disclosed) were down, on the average, by “only” 23.9%. Vanguard’s Admiral shares, which are Buffett’s entry in the bet, lost a dismal 37%.

From this way-behind position, Buffett was quoted in Fortune as saying, “I just hope that Aesop was right when he envisioned the tortoise overtaking the hare.”

And that’s close to what has since happened. Buffett’s index-fund tortoise won the second and third years and — you are reading it here first — also prevailed in the fourth. Not that the 2011 winner was much of a star: Admiral shares were up only 2.08%. But the five funds of funds, on the average, were down 1.86%.

All of which leaves tortoise and hare gasping alongside each other at the end of four years — and having absolutely nothing to cheer about. Protégé is still a bit ahead. But its funds of funds, on the average, are in the minus column for the period by 5.89%. Admiral shares are down 6.27%.”

There’s no 2012 update yet, but one can guess what’s going on.  With the Admiral Shares up 12% YTD and the Credit Suisse Hedge Fund Index up just 3.5% it’s likely that the tortoise is now handily beating the hare….

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