Efficacy of alpha strategies called into question

winner-takes-it-all
Winner takes all, as margins on alpha strategies squeezed

There is no easy way to define alpha, but that has not stopped some banks offering investors guaranteed alpha returns. "It is possible to capture alpha, but to guarantee it means you are guaranteeing outperformance, which may work in theory but will not work in practice," says Kemal Bagci, director of equity derivatives and structured retail at Royal Bank of Scotland in Frankfurt.

Traditionally, alpha has been explained as the excess return of a strategy after taking into account market risk

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Register

Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here