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Glossary

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Alpha

Alpha is a measure of a fund’s over or under performance compared to its benchmark.  It represents the return of the fund when the benchmark is assumed to have a return of zero.  It shows the extra value that the manager’s activities seem to have contributed.  If the Alpha is 5, the fund has outperformed its benchmark by 5% and the greater the Alpha, the greater the out performance.

 


 

Equilibrium Asset Management (A Limited Liability Partnership) is authorised and regulated by the Financial Services Authority. For more information, please go to www.fsa.gov.uk.