Overdiversification and the Quest for Alpha -- What Every Equity Investor Needs to Know: Podcast



Alpha: Alpha is used in finance as a measure of performance. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole. The excess return of an investment relative to the return of a benchmark index is the investment’s alpha.

Active Return: Active return is the percentage gain or loss of an investment relative to the investment's benchmark.

Active Share: Active share is a measure of the percentage of stock holdings in a manager's portfolio that differ from the benchmark index. Research has shown that managers with high active share outperform their benchmark indexes and that active share significantly predicts fund performance.

Benchmark: A benchmark is a standard against which the performance of a security, mutual fund or investment manager can be measured.

Fees per Unit of Active Risk (FAR) Ratio: FAR ratio = Fees for active risk = Management fee/Active risk

Forecasting: The use of historic data to determine the direction of future trends.

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Exp Date 04/30/2020