Excess return on a fund relative to the return of the benchmark index. The better the manager, the higher the alpha obtained by the fund.
This is defined as the apportionment of the assets in a portfolio according to the chosen combination of assets, risk and geographical area. Both bottom-up and top-down analyses are performed to apportion assets.
The objective of this management system is to produce better returns for the managed portfolio than the market average by using independent criteria based on the manager's information and experience in selecting investments. It is the opposite of passive management which simply mirrors a market index.