With a 2.1 % absolute return for
the Alpha Portfolio, the Smart Alpha Portfolio has not out - performed (with a 1.6 % absolute return) to date, but returns appear broadly in line with the potential annual returns I've highlighted.
TGISVP — Smart
Alpha Portfolio: Same as the Smart Beta Portfolio on the long side.
If I had to hazard a guess, I'd estimate
the Alpha Portfolio is capable of returning something like a low volatility 5 - 10 % (maybe even 12 %) absolute return per annum, with the Smart Alpha Portfolio returning slightly more (at the cost of more volatility).
TGISVP —
Alpha Portfolio: Same as Beta Portfolio on the long side.
Fortunately, in my Smart
Alpha portfolio, increased short weightings in many of the v worst stocks clawed back most of this under - performance.
Smart
Alpha Portfolio: Same as Smart Beta Portfolio on the long side.
Fortunately, I've previously highlighted my preference for the Smart Portfolios, particularly the Smart
Alpha Portfolio — so we're actually looking pretty damn good!
Alpha Portfolio, Beta Portfolio, Great Western Mining Corp, Independent News & Media, Irish shares, Irish value investing, ISEQ, Karelian Diamond Resources, Papua Mining, portfolio allocation, portfolio performance, Prime Active Capital, Smart
Alpha Portfolio, Smart Beta Portfolio, TGISVP, The Great Irish Share Valuation Project, US Oil & Gas
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Alpha Portfolio, Smart Beta Portfolio, TGISVP, The Great Irish Share Valuation Project, US Oil & Gas, value investing
Particularly pleasing was the sight of my favourite, the Smart
Alpha portfolio, far outpacing the others with a 21.1 % YTD absolute return.
Alpha Portfolio: This portfolio's exactly the same as the Beta Portfolio, on the Long side... But we're also going to assume a Short overlay (yes, rather theoretical I know..!)
Alpha Portfolio, Beta Portfolio, Irish shares, ISEQ, portfolio performance, Smart
Alpha Portfolio, Smart Beta Portfolio, TGISVP, The Great Irish Share Valuation Project
Alpha Portfolio: Exactly the same as the Beta Portfolio, on the Long side... But we also assume a Short overlay (yes, rather theoretical I know..!)
Aer Lingus,
Alpha Portfolio, Beta Portfolio, Cove Energy, CPL Resources, Datalex, Fastnet Oil & Gas, FBD Holdings, garbage stocks, junior resource stocks, performance appraisal, Petroneft Resources, portfolio performance, Prime Active Capital, Providence Resources, Siteserv, TGISVP, US Oil & Gas, Worldspreads
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The character & depth of the Irish market really doesn't permit the creation of a true
Alpha Portfolio — as in a market - neutral long / short fund.
Education tech startup and High
Alpha portfolio company ClearScholar announced that it raised $ 1.25 million from Elevate Ventures and Simon family members.
If the Irish market offered a larger / broader universe of stocks, and I had all the blog - time in the world,
the Alpha Portfolios would have been constructed in a more genuinely market - neutral fashion.
So yes,
the Alpha Portfolios were a little rough - and - ready in the market - neutral dept., with the (most aggressive) shorts concentrated on natural resource / penny stocks.
Realistically though, being market - neutral,
the Alpha Portfolios would probably deliver a lower return (particularly in a rising market), but at a lower level of volatility.
Based on their significant Downside Potential rankings, both are now included as EUR (3) shorts in
the Alpha Portfolios (see here for more detail on overall portfolio construction)
Another irony — the major out - performance of
the Alpha Portfolios is also due to junior resource stocks!
On the other hand,
the Alpha portfolios bounded ahead — on the back of a junior resource stock shorts pretty much across the board.
And notably, the gains on my TGISVP Alpha & Beta Portfolios have (generally) far out - paced the ISEQ itself — culminating in a magnificent 32.5 % & 38.5 % out - performance for my TGISVP Alpha & Smart
Alpha Portfolios, respectively, in 2014 (full post here).
Of course, junior resource stock shorts actually helped out here — in fact, they added about 9 % & 12 % to the Alpha & Smart
Alpha Portfolios, respectively.
The Alpha Portfolios are obviously hedge fund portfolios.
In comparison, conventional wisdom suggests
the Alpha portfolios offer a safer alternative — that is, (ideally) a less volatile & market independent return.
One can reasonably expect, however, that
the Alpha Portfolios would under - perform against a rising ISEQ (as we see here), and out - perform a falling ISEQ index.
Anyway, here's hoping some / all of
that Alpha Portfolios out - performance carrys over for the full year!
Instead,
the Alpha portfolios (by necessity) really boil down to classic stock selection — going long the good stuff & going short the crap..!
Not exact matches
Investing for normal people 101: Makes no mention of
alpha, beta,
portfolio theory, or derivative pricing.
Alpha is perceived as a measurement of a
portfolio manager's aptitude.
Business owners tend to appreciate the expertise that other professionals bring to the game — and according to a Vanguard Advisor
Alpha study, having a professional financial advisor can add a 3 percent - to - 4 percent net value to a
portfolio over time.
RBC GAM's survey reveals sharp differences among institutional investors as to whether ESG analysis can mitigate risk and drive
alpha in a
portfolio.
Evidence however, shows that active managers» rates of achieving
alpha in funds and
portfolios across the investment universe are not always this successful.
Despite the considerable desirability of
alpha in a
portfolio, many index benchmarks manage to beat asset managers the vast majority of the time.
Check out A Deeper Look at
Alpha, Bettering Your Portfolio with Alpha and Beta, Adding Alpha without Adding Risk, Jensen's alpha and 5 Ways to Measure Mutual Fund
Alpha, Bettering Your
Portfolio with
Alpha and Beta, Adding Alpha without Adding Risk, Jensen's alpha and 5 Ways to Measure Mutual Fund
Alpha and Beta, Adding
Alpha without Adding Risk, Jensen's alpha and 5 Ways to Measure Mutual Fund
Alpha without Adding Risk, Jensen's
alpha and 5 Ways to Measure Mutual Fund
alpha and 5 Ways to Measure Mutual Fund Risk.
This account I started this year after reading about it from several different authors on Seeking
Alpha (side note: if you are interested in Dividend Growth Investing and managing your retirement
portfolio you HAVE to check out this site, it's one of my main sources for stock research).
Alpha can also refer to the abnormal rate of return on a security or
portfolio in excess of what would be predicted by an equilibrium model like CAPM.
Because
alpha represents the performance of a
portfolio relative to a benchmark, it is often considered to represent the value that a
portfolio manager adds to or subtracts from a fund's return.
«The availability of liquid alternative vehicles has expanded rapidly over the past decade, paired with a strategic interest to provide retail investors with access to diversified sources of potential
alpha to complement their traditional
portfolios.»
For example, suppose that Jim, a financial advisor, charges 1 % of a
portfolio's value for his services and that during a 12 - month period Jim managed to produce an
alpha of 0.75 for the
portfolio of one of his clients, Frank.
They employ three distinct methods to measure long - run abnormal returns: (1) calendar - time three - factor (market, size, book - to - market ratio)
portfolio alpha; (2) three - factor
alpha in event time; and, (3) returns in excess of those for control stocks matched on size, book - to - market ratio and six - month past return.
Others may wait for the next notification email to catch our thoughts on where we think incremental, tactical
alpha can be generated in a
portfolio setting.
Alpha is a measure of the difference between a
portfolio's actual returns and its expected performance, given its level of risk as measured by beta.
Unlike beta, which simply measures volatility,
alpha measures a
portfolio manager's ability to outperform a market index.
Clients don't hire a particular
portfolio manager when they hire the firm, they hire our global research and investment process, which is our
alpha - generating engine.
Alpha is a risk - adjusted measure of the value that a
portfolio manager adds to or subtracts from a fund's return.