Alpha
What is Alpha?
The return an investment earns above (or below) its benchmark, after adjusting for risk.
Understanding Alpha
Alpha measures whether a fund manager or strategy added value compared with a relevant benchmark, such as the S&P 500 for large U.S. stocks.
Positive alpha means outperformance; negative alpha means underperformance. Most actively managed funds have historically struggled to deliver positive alpha after fees over long periods.
In 2026
Positive alpha is hard to sustain. According to S&P Dow Jones Indices' SPIVA research, about 90% of actively managed U.S. large-cap funds underperformed the S&P 500 over the 15 years to the end of 2025.