Alpha can also be allusive, and today’s alpha could be gone tomorrow or reclassified as beta in the future. However, one thing is constant: investors such as institutional fiduciaries, pension funds, endowments, and the like, will continue to pursue risk-adjusted alpha through active equity management. It might be that the latest surge of formal quantitative investing has, in part, ushered in better metrics for “separating alpha from beta” and therefore led to a higher level of general understanding of the difference.
