What are beta and alpha?

What are beta and alpha?

Beta represents market returns or benchmark returns. These index funds are built to deliver beta (market) returns. 

Alpha represents the return in excess of beta returns. For example if the market/benchmark delivers 8% whereas a fund manager delivers 10%, alpha is 2%.  Every fund manager’s goal is to provide alpha. If he/she fails to deliver alpha, then investors are better off investing in beta products (index funds).

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