Investors at risk of being misled as alpha strategies gain in popularity

What's it all about, alpha?

sophie-barnett

Since the onset of financial crisis in 2007, investors have sought ways to mitigate tail risks in an attempt to preserve long-term investment objectives. Traditionally, alpha has been explained as the excess return of a strategy after taking into account market risk. Alpha strategies are expected to deliver index-beating returns on the basis that they are active whereas indexes are passive.

One of the supposed benefits of alpha strategies is the risk-adjusted excess returns that the strategies

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