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Alpha and beta: a bit too binary
It’s nice when someone points out that a division is not as clearcut as people like to say. In this case, it’s the boundary between alpha and beta.
This particular piece of jargon refers to different sources of investment return. In brief, beta is the return you get from exposure to a market – a tracker fund will get you that – while alpha is the difference between the actual return and the market return that can be attributed to manager skill.
