In other words, alpha is the return on an investment that is not a result of a general movement in the greater market. As such, an alpha of zero would indicate that the portfolio or fund is tracking perfectly with the benchmark index and that the manager has not added or lost any addi...
Alpha is the return on an investment that’s incrementally more than a benchmark index such as theS&P 500or another appropriate benchmark. Alpha is used as a yardstick when an investor chooses anactive investment strategy, meaning they’re trying to outperform the market. So alpha is a way ...
(the slope coefficient). The alpha is the intercept. Example: Suppose the mutual fund has a return of 25%, and theshort-terminterest rateis 5% (excess return is 20%). During the same time themarketexcess return is 9%. Suppose the beta of the mutual fund is 2.0 (twice as risky as ...
Sharpe ratiois a performance metric that helps in estimating a mutual fund’s risk-adjusted returns. Risk-adjusted returns are the returns a mutual fund generates over and above the risk-free rate of return. The higher the ratio, the better the investment return in comparison to the risk. A...
B Shares means a participating share of no par value in the capital of the Fund, denominated in Euro(s); Consideration Shares has the meaning ascribed thereto in Section 2.2. Co-op Shares Shares issued by private non-profit housing corporations. PIPE Shares shall have the meaning given in th...
Alpha measures risk premiums in terms ofbeta(β); therefore, it is assumed that the portfolio being evaluated iswell diversified. The Jensen index requires using a differentrisk-free ratefor each time interval measured during the specified period. For instance, if you are measuring the fund manag...
meaning that it is linked to an index that employs stock screening tactics with the objective of outperforming simple cap-weighted benchmarks. The AlphaDEX methodology has an impressive track record, so those in hunt of alpha may want to take a closer look at this “enhanced”ETFthat is link...
In contrast, the era before the GFC featured longer and deeper equity market drawdowns, as shown below, meaning more volatility as well as greater opportunity for skilled stock picking to deliver above-market returns (or alpha). We see this dynamic returning and the outlook for alpha turning ...
in relation to the volatility of its active returns. r-squared measures how a fund's performance correlates with a benchmark index's performance and shows what portion of it can be explained by the performance of the overall market/index. r-squared ranges from 0, meaning no correlation, to...
summary the bny mellon small/mid cap growth fund (class a at nav) returned 3.05% during the third quarter of 2024. in the us, stocks were volatile but ended the quarter higher following enthusiasm over the larger-than-expected rate cuts and anticipation for further easing in the final ...