Daily Archives: May 18, 2009

Sophia Grene

a bit too binary

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.

About the blog

FTfm is no longer updated but it remains open as an archive.

FTfm's specialist writing team offer their insights into the global fund management industry.

About the authors

Pauline Skypala has been editor of FTfm for four years having previously been deputy personal finance editor. She joined the FT in 1999 and has been writing on savings and investment issues throughout her career.

Steve Johnson, FTfm deputy editor, has been a journalist for 17 years, 10 of which have been with the FT.


Sophia Grene, reporter on FTfm, has been a financial journalist in print and online for 12 years.

Ruth Sullivan has worked as a financial/business journalist and foreign correspondent and for the past 10 years has been at the FT.