Detailed Definition
Alpha measures excess performance relative to what benchmark-linked risk would have suggested.
Glossary Term
Alpha
Return above benchmark after considering risk exposure.
Why It Matters
It helps judge whether active management added value.
Example
If a benchmark returns 10% and fund returns 12%, excess may reflect alpha.
Related Guides
Explore More Terms
AUMAsset AllocationBetaCAGRDiversificationExpense RatioExit LoadFund ManagerHybrid FundIndex FundLarge CapMid Cap
View glossary index